Stonebridge, Bernstein Razing Downtown Office For $250M Apartment Project
Demolition has begun on a downtown office building slated to be replaced by 435 apartments — one of a trio of new projects to receive a tax abatement from D.C.
The District on Wednesday awarded its Housing in Downtown 20-year tax abatement to three projects totaling more than 600 new apartments, including more than 60 affordable units. Mayor Muriel Bowser announced the awards at the groundbreaking for a $250M redevelopment on the site of a K Street office building.
Stonebridge and The Bernstein Cos. are demolishing the 300K SF property at 1990 K St. NW to make way for a 435-unit apartment building with ground-floor retail.
The venture, which includes equity partner Criterion Real Estate, closed on the property Wednesday with financing from Lionheart Strategic Management, Stonebridge principal Doug Firstenberg told Bisnow. The developers are rebranding the K Street building as 1999 Eye Street.
The project is the first Housing in Downtown abatement recipient to do a full demolition-and-rebuild strategy, as prior developers have pursued conversions.
Bernstein is also part of the partnership that sold the K Street property. That partnership acquired the 1970s-era building in 2001 for $55.8M, according to D.C. deed records. The building is now 35% leased, according to a release from Bernstein and Stonebridge.
“Through the HID program, we are making it possible to think bigger than conversion,” Firstenberg said in the release.
“1999 Eye Street will replace a non-productive office building with hundreds of new apartments, affordable housing, retail and more than 700 new residents Downtown, which is exactly the kind of transformative investment this program was designed to unlock,” he added.
The first residents are expected to move into 1999 Eye St. NW by May 2028. Cushman & Wakefield arranged the financing for the project.
The other projects awarded D.C.’s 20-year tax abatement are both from Monument Realty.
One is a 116-unit redevelopment of a series of small lots at 608-624 Eye St. NW in Chinatown, which will include 8K SF of ground-floor retail. The other is a project at 2401 Pennsylvania Ave. NW, where the D.C.-based developer is transforming three stories of the eight-story building into 60 housing units.
Monument already has one of the five office-to-residential tax abatements that the city has given out so far.
The D.C.-based developer was one of the first three recipients of the abatement last September for its redevelopment of a commercial row home and surface parking lot into 72 units in Chinatown at 615 H St. NW.
The others in that batch were National Real Estate Development’s conversion of the former Air Line Pilots Association headquarters at 1625 Massachusetts Ave. NW and Post Brothers’ 525-unit conversion of the Universal buildings in Dupont Circle.
Two more were announced in March for Transwestern’s redevelopment of the former MCI Communications Corp. building at 1133 19th St. NW and Duball’s conversion of 1201 Connecticut Ave. NW in Dupont Circle.
Those first five projects are poised to deliver 1,134 units. To qualify for the program, developments must reserve at least 10% of the units as affordable.
