How to Get Rich
Dustin Hoffman almost got it right from Mr. McGuire in the 1967 movie The Graduate.
The future did belong to the P word. But not the P word Dustin was told. Remind yourself above if you've forgotten.
No, the word should have been Parking. Some of DC's biggest real estate players made their fortunes in the mundane business of surface parking lots. Kingdon Gould Jr. and Nick Antonelli of PMI, Irwin Edlavitch of Atlantic, Paul and Bob Edenbaum of Diplomat (now Central), the Gambal and Lindner families of Colonial, Bud Doggett of Doggett Parking, just to name a few. They'd get locations near abandoned buildings in fringe neighborhoods, operate surface lots, wait until the market improved, then either sell to a developer or take equity as part of the venture (and of course retain the lucrative parking rights, often for decades).
For example, Antonelli would contribute sites to Charles E. Smith developments and get a valuable stake in return, or ground lease the land to a developer and collect rent for 99 years. Edlavitch was part owner of the land at 9th and E, providing overflow parking for Verizon Center events for many years, and which later became the DLA Piper building (above). He even became a partner of Boston Properties in developing it. Paul Edenbaum, who astutely bought distressed debt when the real estate market was in the doldrums, foreclosed on properties, and ended up with a piece of 455 Mass Ave, which he operated as surface parking for a while and then sold to Penzance and ASB when the market turned in Paul’s direction. The Carrs had a parking company too. And so on. It was very foresightful, entrepreneurial, and in most cases, stunningly profitable.
The fact it was a cash business in the old days gave operators extra leverage with owners. And after a property was developed, it often had even more parking inventory (all those new subterranean levels), for which they continued as operators, raking it in. These days the opportunities for operators have declined as owners take more control: everything's done electronically, not via cash; and often the parking arrangements are done via management agreement rather than leases. The old days have become legend: above, one of DC's great operators for many decades even got a street named after him, at 10th and H Streets NW.
Irwin Edlavitch's nephew, Marc Slavin, worked at Atlantic for years before starting his own parking empire, MarcParc. One of Slavin's most successful lots, owned by the Steuart family at 5th and K Streets NW, is now being developed into a 540k SF office building (rendering here). Boston Properties is JV'ing with the Steuarts, as we told you about last month.
Perhaps the highest profile lot left is Kingdon Gould's, where you probably park when you visit the Renaissance Hotel on 9th Street, on the old Convention Center site where CityCenter now stands. It will soon be converted to an ultra-modern office building, once the partners secure an anchor tenant.
Are gas stations the new surface parking lots? They're now being picked off for their land. Here's the Exxon station at 7100 Wisconsin, sold to Charlie Nulsen's Washington Property Company, which is under construction on a luxury apartment building there. Richard Ruben bought a couple of gas stations on South Capitol Street in Capitol Riverfront (to add to his already extensive holdings there), and of course Anthony Lanier is famous for having bought the air rights from Exxon at 22nd and M and moved and camouflaged the station to be able to develop his luxury condos there.