With 'Easy' Candidates For D.C. Office Conversions Taken, What's Next?

Downtown D.C. is starting to see the first fruits of office-to-residential conversions.

Willco’s 163-unit Elle and Willow Bridge Co.’s 222-unit Balsa opened last summer, and at least 1,500 more units are moving forward with openings expected by 2028, according to a Bisnow analysis of data from the Washington DC Economic Partnership.

But it will be difficult to keep up that momentum, developers said last week at Bisnow’s DMV Office Repositioning Summit.

“All the easy buildings have been taken,” Foulger Pratt Development Director Kofi Meroe said onstage at 80 M St. SE.

The pipeline of properties to be converted now makes up a small portion of the vacant and unusable office space downtown that would need to be transformed to make the area a mixed-use environment and reach Mayor Muriel Bowser’s goal of bringing 15,000 new residents downtown by 2028.

And the challenges with converting the remaining buildings present a significant roadblock for achieving that vision. 

“The best candidates for conversion are getting picked off,” Transwestern Development Co. Mid-Atlantic Regional Partner Toby Millman said. “We're working on some of those up here, and what we're going to be left with are the kind of buildings that are going to be the hardest to convert.”

Some of the most obvious conversion opportunities still up for grabs are out of the hands of both the D.C. government and developers. 

The federal government owns 36.7M SF of real estate in D.C., concentrated in a handful of nodes around the city. 

The Public Buildings Reform Board has begun taking a look at 15.3M SF of federal properties clustered just south of the National Mall that could be redeveloped into a new mixed-use neighborhood. 

Shalom Baranes, who founded and leads architecture firm Shalom Baranes Associates, said during his keynote address at Bisnow's event that the cluster north of the mall also presents an opportunity — and a faster one that could better meet the urgency of the moment. 

“I feel like we're in a crisis, or, as [Robert] DeNiro said, a full diaper,” Baranes said. “And I think what we really need is a five-year plan, not just a 100-year plan.” 

Baranes argued that the pre-World War II buildings in the Federal Triangle area are ripe for conversion and present a more immediate opportunity. He said the federal government should start leasing these properties to developers but retain ownership.  

“What we have here in Federal Triangle is a group of buildings with all the infrastructure in place to create a vibrant new community,” he said. 

Ownership under a single entity would create cohesion and connectivity, Baranes said, and it would mirror the strategies used by other large-scale redevelopments in the region, including the Navy Yard, the Wharf and the Parks at Walter Reed.

“The federal properties are going to be huge,” Gotham Urban Ventures founder Desa Sealy said, adding that the city is already thinking about how to coordinate that effort. 

“That's going to be important, as opposed to kind of [going] building by building,” she said

For corridors with privately owned commercial properties, developers are trying to take the do-it-yourself approach to making more conversions work as the available crop shrinks. 

TDC’s Millman said the company is trying to assemble a group of buildings downtown that can then largely be razed and rebuilt as a residential node.

The company already has a building under contract to convert: the former MCI Communications Corp. headquarters at 1133 19th St. NW. But those opportunities are already few and becoming fewer as developers lay claim to the ones that work.

“The next step, unfortunately, is going to be the hardest step, which is going to be more wholesale, just teardown redevelopment of large blocks,” Millman said. 

National Real Estate Development is also beginning to consider projects downtown that would consist of demolition and ground-up construction, Development Director Katherine Hartley said.

The company is converting the former Air Line Pilots Association building at 1625 Massachusetts Ave. NW into 157 apartment units. The project was one of the first three to secure the city’s 20-year tax abatement for office-to-residential conversions downtown. 

But after that, the firm doesn’t see many more conversion opportunities. 

“We are currently studying additional opportunities, and I can say that more and more of those are pivoting us to — we're likely going to tear down the next job that we do,” Hartley said. 

Developers called for more coordination in the coming years from the city and the private market on these downtown redevelopment efforts. 

“One of the trends I would hope to see — and believe what we're going to have to see — is the fact that local jurisdictions are going to have to come together with developers to get a little bit more creative to figure out how we want to unlock some of these buildings,” Foulger Pratt’s Meroe said. 

Foulger Pratt is nearly done with its 243-unit conversion at 1425 New York Ave., which is set to open this summer. The company was previously planning a conversion at 1133 19th St. NW, which TDC took over last year. 

Meroe said that “through the magic of architecture,” practical thinking and planning, the city could unlock 20% more buildings for conversion. 

“And it takes a village, right?” Willco President Gary Cohen said.