Pioneering NoMa Property Anchored By Harris Teeter Hits The Market
A 643-unit apartment building in NoMa, a project that kicked off a wave of multifamily development in the neighborhood, is up for sale.
CBRE is marketing the Flats 130 building for sale on behalf of owner Nuveen. The three-part apartment building with a 50K SF Harris Teeter on the ground floor sits within NoMa's Constitution Square complex.
Nuveen's parent company, the Teachers Insurance and Annuity Association of America, acquired the property at 130 M St. NE in 2014 for $295M. It was sold by the developer, a partnership of Stonebridge and Walton Street Capital.
A Nuveen spokesperson confirmed to Bisnow that it is looking to “conclude its investment in the property.”
“We remain optimistic about the Property within the Constitution Square neighborhood and the asset’s primary retail tenant, Harris Teeter, which we believe offers investors an interesting and diversified opportunity,” the spokesperson wrote.
The Stonebridge partnership started building the 2.7M SF Constitution Square complex in 2008. It includes four office buildings, with federal tenants including the Department of Justice, and a hotel. Stonebridge sold its last stake in the development in 2019.
Flats 130 was 95% occupied as of early February, CBRE’s listing says. One-bedroom apartments make up 51% of the units, while two-bedrooms make up 27%. The average rent is $2,502 per month.
The listing highlights the opportunity for the new owner to “further differentiate the asset, enhance renter appeal, and capture additional rent premiums in an already supply-constrained environment.”
Multifamily investment has slowed in D.C. in recent years amid concerns over the impacts of federal cuts as well as local policies that real estate leaders say make capital sources wary of the city.
Investment sales volume in multifamily across the D.C. metro area last year totaled $5.3B, down 26.4% from the year before, according to Newmark. The largest deal in the second half of the year was near NoMa: JBG Smith's $155M sale of The Batley.
The D.C. government sought to spur more investment in the city with last year's passage of the Rental Act, which created an exemption from the longstanding Tenant Opportunity to Purchase Act for the first 15 years of a building's life.
Because the first two buildings of Flats 130 delivered in 2010 and the third in 2013, it is unclear if they would be exempted from TOPA under the new law. The CBRE marketing flyer doesn't mention TOPA.
D.C. real estate leaders told Bisnow in September they foresee an increase in investment in D.C. multifamily following the Rental Act's passage. And Newmark's fourth-quarter market report also says the Rental Act and the market's slowly improving fundamentals should help jump-start sales.
“Deal volume has likely approached a bottom and should gradually pick up as pricing adjusts, and more clarity arrives regarding local policy and federal government changes,” the report says.
