JBG Looks To Sell Union Market Apartment Building For $180M
JBG Smith is trying to offload a 432-unit Union Market apartment building it purchased less than four years ago — potentially at a significant discount.
The Bethesda-based REIT this month issued tenants a notice, which Bisnow obtained, saying that it intends to sell The Batley apartment building at 1270 Fourth St. NE.
On the notice form, the REIT chose the option marked “owner no longer wants to own it” as its reason for the sale — the other options were reuse, redevelopment or “other.”
The asking price is $180M, according to the notice. JBG purchased the 11-story property in the winter of 2021 for $205M.
JBG Smith declined to comment.
The notice advises residents that they can use their Tenant Opportunity to Purchase Act rights to buy the building. D.C.’s TOPA law has been a source of tension between the real estate community and the city. Mayor Muriel Bowser introduced new legislation this winter that would largely exempt sellers of new market-rate buildings from the requirement, but it is still awaiting a hearing in the D.C. Council.
JBG's notice says 14 of The Batley's 432 apartment units are vacant. It has 38 inclusionary zoning units and one D.C. housing voucher unit.
For the market-rate apartments, the average rent for the property's 224 one-bedroom units is $2,450 per month. For its 95 studio apartments, the average rent is $1,963, and the 113 two-bedrooms cost $3,573.
The property was developed by a partnership between Edens, Trammell Crow Residential and Level 2 Development. The project broke ground in 2016 and completed in 2019. It features Latin American food hall La Cosecha on the ground floor.
JBG purchased the building as part of a 1031 exchange, the Washington Business Journal reported, adding that the REIT reinvested the proceeds from its sale of a Pentagon City site to Amazon for its second headquarters.
JBG Smith has been on a selling spree over the past few months.
Last month, the REIT sold a 322-unit building at 8001 Woodmont Ave., its only multifamily property in Bethesda — where it is headquartered — for $194M.
In December, JBG sold a 375K SF office building near Washington Circle for $110M, and last fall it sold a 345-unit Walmart-anchored Fort Totten apartment building for $86.8M.
JBG recorded a $60M net loss during the fourth quarter, nearly double that of Q4 2023. Its full-year net loss was $143M, up from $80M in 2023.
The Union Market district has undergone a renaissance over the last decade, beginning with the opening of its namesake food hall in 2012. The district, which was historically a wholesale industrial area, has emerged as a hot new residential, restaurant and retail neighborhood spearheaded by master developer Edens.
