Fannie Mae Sells HQ To Roadside, Japanese Firm For $86M
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Roadside founding principal Richard Lake tells Bisnow the JV is planning a major mixed-use development on the site. They plan to meet with neighborhood residents and stakeholders before deciding what the components of the project will be.
"We don't look at it as just playing inside these 10 acres," Richard says. "What we do here affects what happens next to us on all sides...The finer grain of what this should and could be is going to take some time to go through the process."
NASH, the US subsidiary of Japan's largest homebuilder, Sekisui, has worked on DC projects before. The developer teamed up with Miller & Smith on the One Loudoun development and partnered with JBG on the Wardman Tower condo project.
Richard says Roadside was introduced to Sekisui on a deal several years ago that fell through, and the two companies stayed in touch.
"We just really enjoyed their approach to the built environment, their approach to development," Richard says. "It seemed when this opportunity came forward, the vision started to come together, we felt we needed a partner that would appreciate same things. NASH really brought that same kind of sensibility. I approached them, and they quickly became very excited about it."
NASH SVP and chief development officer Tom McKay tells Bisnow the company had been looking to partner with Roadside for a while and was just waiting for the right project to offer its multifamily expertise.
"It definitely has great residential potential," Tom says. "We saw it as an outstanding location in a high-quality market and those type of opportunities don’t come up very often."
Fannie Mae is departing 991k SF of owned and leased office buildings to lease 679k SF at Midtown Center, the $680M project Carr Properties is building.
The mortgage financier also announced the sale today of its two other DC properties. It sold the nearby building at 3939 Wisconsin Ave to Sidwell Friends, the private school next to the property, for $8.2M. It sold the third property, at 4250 Connecticut Ave NW, to Bernstein Management for $24.8M. Fannie Mae is currently leasing two additional DC office spaces, both of which the lender will vacate when it moves to Midtown Center.
A spokesperson for Fannie Mae, Pete Bakel, tells Bisnow the company was very pleased with the terms of all three deals.
"For us, it was an issue of getting the most competitive price we could get," Pete says. "Our money is in the taxpayer interest, and they were way up there."
The agreements for each deal allows Fannie Mae to stay as long as it needs before moving downtown. Pete says the company has yet to set a moving date, but expects it to be toward the end of next year.
"The idea behind the sales was to increase efficiency by bringing together five separate buildings," Pete says. "It improves the company's safety and soundness and allows us to easily adapt to future workplace needs."
Cushman & Wakefield's Ned Goodwin, Art Santry and Bill Collins marketed the property for Fannie Mae. Art tells Bisnow they didn't market it for any specific type of development, but he believes market conditions point towards multifamily and retail.
"If you look at other real estate up here, that’s where the highest and best use is, and that’s where the dollars are directing it," Art says. "It’d be hard if you developed a 400k SF, 500k SF office up here, you’d have a hard time leasing it. There’s a big demand for retail and a big demand for residential."