Developer JBG Smith has withdrawn its plans for a pair of 30-story apartment towers in Northern Virginia, citing high interest rates and tariffs among the pressures that have made the project infeasible.
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The publicly traded REIT said in a filing with Arlington County that it no longer intends to build two towers totaling more than 1,400 apartments in the National Landing neighborhood, the Washington Business Journal reports.
JBG Smith filed plans in late 2021 and received county approval in early 2023 to build the project at 223 S. 23rd St. and 2250 Crystal Drive. The developer demolished a five-story office building and a one-story retail building to prep the site, which has been used as volleyball courts for Volo Sports since last year.
In addition to the two multifamily towers, JBG's project would have included 17K SF of retail and 12K SF of public park space.
The project is no longer feasible due to rising costs and difficulty obtaining financing, JBG said in its filing, according to the WBJ. It cited construction cost increases since 2021, high interest rates and macroeconomic uncertainty as some of the pressures that made the project hard to finance, as well as the Trump administration's trade policies.
"The imposition of new tariffs has increased these pressures by introducing volatility into the commercial development industry and making it more difficult to secure acceptable pricing on building materials," the filing states, according to the WBJ.
A JBG Smith spokesperson declined to comment to Bisnow.
The developer has constructed several other apartment projects in recent years in National Landing, the neighborhood around the Amazon HQ2 campus it built for and sold to the tech giant.
In early 2024, JBG Smith opened The Grace and Reva, a pair of 300-foot-tall apartment towers that total 808 units with 40K SF of retail. In December, it began leasing at The Zoe, a 420-unit tower, and in July it kicked off leasing at an adjacent 355-unit building, Valen.
The REIT has advanced other plans in the neighborhood, including the 2,000-unit redevelopment of the RiverHouse complex and the conversion of a vacant office building into 195 apartments and a hotel. Its timing on starting those projects remains unclear.
This year, JBG has made a "deliberate pivot" away from the multifamily sector.
The REIT has sold several apartment buildings, and CEO Matt Kelly wrote to investors in July that it decided to sell them because the sector is "commanding attractive pricing." Meanwhile, he said it is shifting to invest in office assets, as the sector's distress is "creating some of the most attractive office investment opportunities in nearly two decades."
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