Trammell Crow Begins Armature Works Project With New Partner, Changed Plans
Demolition began this week on the Central Armature Works building in NoMa after the developer brought in a new partner and made some changes to the three-building project.
Trammell Crow subsidiary High Street Residential, along with partners KochSmith Capital and the Central Armature Works ownership family, reached a deal with MetLife, last month to become an equity partner on the $400M Armature Works development at 1200 Third St. NE. MetLife's David Posnick represented the global insurance giant in placing the equity.
While it brought on a new partner, the development team backed out of an agreement with Denihan Hospitality, which had planned to bring its James Hotel brand to the project's 204-room hotel component, a deal the team announced in January 2018.
"With MetLife joining our team and with their relationships and goals as an owner of a large number of hotels, we have just reassessed that component of the project and are in the process of selecting a hotel brand," Trammell Crow principal and Mid-Atlantic leader Campbell Smith tells Bisnow.
The development team also decided to pivot the plans for the project's 172-unit residential building from condos to apartments, Smith said. The building will have a different design and larger unit sizes than the project's 468-unit apartment building.
"That was an assessment of the demand in the market for for-rent versus for-sale product," Smith said. "Ultimately, we decided that building was probably too big for a condominium building."
The project also has about 60K SF of planned retail space. Smith said it is seeking a mix of food and beverage, service retail and fitness users.
"NoMa and Union Market is a great untapped and underserved retail market because you have a huge office base and you're getting a huge multifamily base, so you've got true daytime and nighttime foot traffic, which sets it apart from a lot of markets in the D.C. area," Smith said.
The development team is also building a large public plaza that will lead to a planned eastern entrance to the NoMa Metro station. The new entrance will be funded by D.C. and will shorten the walk from the Metro to Union Market.
The beginning of demolition this week marks the first development activity on the site, and Smith said it plans to begin construction immediately after the existing building is razed.
Smith said the team is finalizing a construction loan to support the development. He expects construction will take about 30 months, putting the expected delivery date in spring 2022.
The groundbreaking comes more than two years after the project received its Zoning Commission approval order in August 2017. The project was appealed the following month by Union Market Neighbors, the group that brought several projects in the area to court. The appeal was dismissed in March 2018.
The project sits across Third Street NE from the three-building mixed-use project Foulger-Pratt began construction on in April. It is also across M Street from Uline Arena, home to a flagship REI, a new brewery and office space. The property is within a half-mile of Union Market to the north and of H Street to the south.
"It is an important connector between the regional retail and entertainment draw of Union Market to the Metro station in NoMa and further south to H Street," Smith said. "This block of Third Street is right in the center of that walking path, and it's going to be a nice environment with both sides of the street being developed in a coordinated way and with really good retail lining the street."