JBG Smith Sells Site Of Long-Stalled NoMa Development For $11M

Since The JBG Cos. started planning the Capitol Point development in NoMa, the company has gone through a merger and an initial public offering, changed its name, landed Amazon's second headquarters across the river in Arlington, navigated a pandemic and watched the Northeast D.C. neighborhood boom with development around it.

All the while, the site at First and N streets northeast, where JBG planned to build a 475-unit apartment building, has sat idle. But that could be about to change.

JBG Smith is selling part of the development site to July Residential, founder Isaac Pinto tells Bisnow. The deal hasn't appeared in deed records, but Pinto said it closed Friday for $11M.

The property, totaling nearly an acre, includes an empty, three-story, 1980s-era office building at the corner of First and N and a vacant lot fronting New York Avenue. Pinto said he intends to pursue JBG's plan with some minor changes. 

JBG Smith declined to comment on the deal. 

The sale doesn't include the adjacent McDonald's property, which JBG sold to the fast-food chain in late 2023, and JBG still owns adjacent development sites to the south of N Street in partnership with Brandywine Realty Trust. 

The Bethesda-based JBG Smith has developed one parcel of the massive Capitol Point site, the Hyatt Place hotel that opened in 2014. It sold another to Wood Partners, which developed the Belgard apartment building at 33 N St. NE in 2018. It has planned mixed-use development on the remainder of the site since at least 2012.

Then-JBG executive Andy VanHorn told Bisnow in 2015 that JBG planned to break ground on additional phases the following year, but in 2017, it put the project on pause. That summer, it finalized its merger with Vornado's D.C. arm and went public as a REIT, changing its name from The JBG Cos. to JBG Smith. And in late 2018, it won the Amazon HQ2 sweepstakes with its National Landing portfolio and has since focused much of its development efforts on that area.

VanHorn is now leading the development of the Washington Commanders' stadium project. Pinto, meanwhile, has had his eyes on the site in NoMa.

The developer, an Israeli immigrant who moved to D.C. in 2016 to launch his company before moving its headquarters to New York two years later, has continued to visit D.C. once a month to oversee his firm's operations in the market.

When he visits D.C., he stays at the citizenM hotel in NoMa, directly across the street from the site he just bought. In recent years, he has watched a series of buildings with thousands of new apartments open in the NoMa-Union Market neighborhood and fill with young professionals, who have helped turn it into one of the city's hottest food and drink destinations. 

“I love this area, with Union Market close by. It’s part of why I really believe it’s changing for the best,” he said. “You can't ignore the immense amount of growth in that area. It is the best neighborhood to stay and live in D.C. today.”

Pinto also said he feels like he is striking at the right time.

He said the challenges the D.C. multifamily market has faced — from macroeconomic headwinds to local policies that have stifled investment — have brought down property values to a point where it is attractive to buy. The $11M price tag for Capitol Point North is less than half of the property's $29M assessed value as of last year. 

“This is the first time you see a strong price adjustment and a reset in a form that really allows you to step in and create some interesting opportunities,” he said.

In addition to the NoMa development site, Pinto's firm last week acquired a new multifamily building in Takoma that went through foreclosure after Neighborhood Development Co. shut down. It bought the 36-unit building from lender Forbright Bank for $13.4M, or $371K per unit. 

“You’re able to buy something way below replacement cost for existing, and for development sites, you’re buying it for 25% of what it was a few years ago, so I think the price adjustment makes it time to buy in,” he said. “And long-term, D.C. is going to be great. You just have to be patient and have vision.”

He said if the D.C. Council passes the reforms to the Tenant Opportunity to Purchase Act that Mayor Muriel Bowser proposed, it could spur more investment in D.C.'s apartment sector and bring values up. 

“I'm sure it will make a big difference,” he said. “TOPA was a big issue for many other groups, and hopefully that's going to change.”

JBG Smith has been a seller of D.C.-area apartments over the last year. In September, it sold a Fort Totten building for $86.8M, and in February, it sold a Bethesda property for $94M. It has also put on the market a 432-unit Union Market building that it purchased in 2021. 

CEO Matt Kelly, in an April letter to investors, said the REIT is selling apartments to obtain liquidity because the sector remains “attractively priced in the private market.”

And he said it is looking to buy office buildings, which have seen their values plunge and “remain at historically distressed pricing levels.”

That shift was evidenced last week by JBG Smith's deal to acquire the Tysons Dulles Plaza office complex for $42.3M, less than $100 per SF. The firm said in a release that it sees the investment opportunities in the office market as “extremely attractive” and is pursuing more deals.