A Dupont Circle office-to-residential conversion has started construction after it closed on its debt financing last week.

Duball secured a $54.5M loan from Bethesda-based EagleBank for its 161-unit conversion of the historic Longfellow Building at 1201 Connecticut Ave. NW. The loan documents were filed in D.C. deed records on Thursday.

Demolition is underway at the 193K SF property, which is clear of tenants. The project is expected to take roughly two years to complete.

“We do feel positive about what we're starting here. The outcome is going to be terrific,” Duball President Marc Dubick told Bisnow Tuesday. “Frankly, it should be a win-win-win. Hopefully, it’ll be great for the city and great for the residents that live there and a successful project for Duball and its capital partner.”

EagleBank Chief Real Estate Lending Officer Ryan Riel said the bank has worked with Rockville-based Duball on at least 10 projects. One of the most recent was Sophia, a 276-unit project in Bethesda that is newly on the market with JLL.

“They came to us — time to get the band back together, so to speak,” Riel said Tuesday. “This is the next project they're working on, and [we] hoped that we could find a way to continue to support them, and that's what we do, support our relationships.”

EagleBank was also part of the financing team for Foulger Pratt’s 243-unit conversion at 1425 Massachusetts Ave. NW in downtown D.C., which is scheduled to deliver in June.

The price tag for Duball's conversion of 1201 Connecticut is expected to come in around $100M, Dubick said. The vast majority of the equity is coming from Duball's unnamed international institutional investment partner.

The project is one of five so far to be awarded a 20-year office-to-residential conversion tax abatement from the District. The property is planned to include 16 affordable units for residents making 60% of the area median income, as is required with the tax abatement.

“Mayor Bowser’s investments through the Housing in Downtown Program are driving forward our dual mission of repurposing underutilized office space and creating more housing units,” Deputy Mayor Nina Albert said in a statement to Bisnow. “We’re excited that 1201 Connecticut NW is joining a growing cluster of office-to-residential conversions that are bringing residential activity from Dupont, through the Golden Triangle BID, and into the District’s central business district.”

As the capital markets for multifamily construction have faced headwinds, many more conversions have been announced than have begun due to a lack of financing.

Dubick said this project penciled in large part because the firm acquired the property at a low basis.

Duball paid $21.5M for the property last summer, after it was handed to its lender at a foreclosure auction in late 2023. The previous owner, Chicago-based coworking company Expansive, defaulted on its $65M loan.

“It’s the kit of parts, right? You have to build it one part at a time, and the first thing is buying it at a price that will support the endeavor,” Dubick said. “And then, from there, there's lots of other pieces to the puzzle.”

Maurice Walters Architect is the project's architect, and McCullough Construction is the general contractor. McCullough also completed Willco’s Elle, a 163-unit office conversion of the former Peace Corps headquarters at 1111 20th St. NW.

The 1201 Connecticut property is a 1940s-era office building that was designed by famous architect William Lescaze and renovated in 1980. The conversion is set to restore the facade to a condition closer to the original design. The developer is also planning to add an activated penthouse, including a rooftop pool and deck, grilling area, lounge and party room.

The plans were approved by the D.C. Historic Preservation Review Board last summer. Ground-floor retailer Brooks Brothers plans to relocate into renovated space once the conversion is complete, Dubick said.