The Plexies: 2011 in Review for D.C. Real Estate
When land-use historians write the saga of real estate in the District, 2011 will likely go down as the year D.C. managed, yet again, to dodge the collapse that’s been hitting just about every other city in the country since the economic crisis of 2008. Prices for homes were up over 2010, construction continued apace, and rents kept increasing (unhappily for tenants, but happily for landlords and investors).
That’s the macro story. The micro story, though, has a few more details. Here are some awards—known as the Plexies, à la Washington City Paper’s longstanding tradition of the Loosies—for noteworthy developments in, well, development.
Most Expensive Home Not Purchased By Japanese Pharmaceutical Tycoons: The two biggest-ticket homes of the year, Georgetown’s Evermay Estate and Halcyon House—which had been sitting on the market for years—finally sold to Ryuji Ueno and Sachiko Kuno, founders of an international drug-development company, for less than half the original asking prices. After those hot sales, the year’s third biggest transaction is a snooze at $7.7 million for a Tudor on Woodland Drive NW. And we don’t even know who bought it!
Most Brazen City-Assisted Property Flip: Until this year, when legislation by Councilmember Michael Brown fixed the problem, the city handed out tax abatements for building projects with little scrutiny of whether they were needed. Thus, real estate data company Costar got a $6.1 million property tax abatement for relocating to a downtown building it had purchased for $41 million. A few months later, Costar turned around and sold it for two and a half times as much. Now that’s what I call return on investment (for Costar, at least).
Worst National Park Service PR Debacle: The National Park Service has never been very good at managing its image in D.C., but this year might have set a high water mark for tone deafness. The worst example: Refusing to consider putting Capital Bikeshare stations on the National Mall and other Park Service-owned lands, saying that they only served “select individuals.” The agency reversed course later in the year, with no attempt to justify its bizarre intransigence.
NIMBY Travesty of the Year: Last year, Youthbuild Public Charter School and the Latin American Youth Center were set to renovate and move into the vacant J.F. Cook School in Truxton Circle, bringing the building back to life with educational programs and supportive housing for 50 at-risk kids—similar to what the well-regarded organizations have done in Columbia Heights and elsewhere. But the neighborhood revolted, claiming the area was already overburdened with social services, and the property transfer never moved forward. The street will remain dark and dangerous for years longer, and a vital social need will go unmet.
Saddest Neighborhood Retail Strip: The first decade of the century saw the revival of many of D.C.’s struggling commercial corridors: H Street NE, 14th Street NW, Barracks Row. Still others are touted as the next big thing: Martin Luther King Jr. Avenue SE in Anacostia, 12th Street NE in Brookland, upper Georgia Avenue NW. Out on the city’s far northeast corner, Dix Street also has the bones of a commercial district. Now, a Walmart is moving in a few blocks away—not a good sign for small business development. Despite a shiny new cluster of affordably priced townhomes, it’ll take a long while for Dix Street to become the kind of walkable urban corridor blooming elsewhere in the District.
Ballsiest Move: Doug Jemal probably owns more land in more random places than anyone else in the District. It got him in trouble last year, when a few projects didn’t come through and left him short on funds to pay his bills. Dozens of properties went to tax sale, rescued only at the last minute. Nevertheless, Jemal found a backer to buy the massive, historic Hecht’s warehouse on New York Avenue NE out of foreclosure for $20 million—its last owner had paid $44.3 million for it in 2007, but got caught in the recession as well—placing a big bet on a part of the city that doesn’t even qualify as “up and coming” yet. Given the length of time Jemal tends to sit on his properties, though, this one may still languish for years to come.
Biggest Comeback: In 2008, Monument Realty was a powerhouse, valued at $5 billion after a decade of audacious flips in the hottest real estate economy the area had ever seen. Then the call came from Lehman Brothers: Their financial backing had crumbled. The company laid off 50 of its 80 employees and turned to deal with $500 million in loans on properties it owned with Lehman. After a few years of refinancing, Monument is back doing deals all around the region, and recently agreed to build Boeing’s headquarters just north of Crystal City. The company even offered 54 condo owners at a former public housing complex in Logan Circle about $800,000 each to sell, on the off chance they might be able to redevelop the whole thing. It’s like 2007 all over again.
Best Picket Line: At the beginning of the year, Jamestown Properties bought the Madison Hotel on 15th Street NW and summarily fired 27 employees, while the rest of them saw increased workloads. With Jamestown refusing to honor the existing union contract, UNITE HERE Local 25 got members to protest—loudly—for two months on the Madison’s doorstep, exasperating nearby office workers and leading to the cancellation of large room buys by sympathetic labor groups. Finally, in late March, Jamestown agreed to a contract on terms that the union called “very favorable.” Who said bullhorns don’t get results?
Best Future Candidate for “Unbuilt Washington” Revival Exhibit: One project to be built over I-395 is well on its way to starting construction. So why not another? That’s what local architect Alfred Liu figures, at least. In November, Liu floated his proposal for a “Washington Global Trade Center” over the freeway north of K Street NW, complete with renderings of a shiny globe-encased office building. Liu doesn’t have financing yet, but he does have dealings all over the world, and bets that international businessfolk—especially in the Chinese pharmaceutical industry—would throw down for access to the U.S. market. File this one in the “believe-it-when-you-see-it” category.
Craziest Buying Spree: The recession sent a lot of D.C. apartment buildings into foreclosure, even though rental demand here is the strongest in the country. Steve Schwat, of Urban Investment Partners, has been capitalizing on that, picking up building after building cheaply and either converting them to condos by buying out existing tenants or just doing big upgrades and charging higher rents. “We could not possibly buy enough properties to satisfy our investors at the moment,” Schwat says. That’s not a bad problem to have.
Project Likeliest to Stall: Since 2008, Brian Friedman and partner Matt Wexler have been trying to build a high-end hotel on the site of City Paper’s Adams Morgan offices and the First Church of Christ Scientist on Euclid Street NW. They’ve got both local and out-of-state financial backing and a commitment from Marriott Hotels to run the reservation system under its oh-so-sophisticated “Edition” brand. But the neighborhood is split on the idea, and the Office of Planning has signaled its strong displeasure with the hotel’s zoning application, saying the building is too tall—even though Friedman says the deal won’t work with anything shorter. Meanwhile, Edition hotels have been running into financial trouble elsewhere in the world. Friedman has sunk a lot of his own money and time into this one, and it could all come crashing down.
Craziest Request by University Neighbors: This year, several neighborhoods have gone to war against local universities’ desires for more students and bigger buildings as presented in city-mandated campus plans. American University’s neighbors have been particularly aggrieved about new dormitories on Nebraska Avenue, prefer to neither see nor hear any evidence of students. The nuttiest demand: That the rooms be built with windows that can’t open, so as to protect single-family homes from the noise that might emanate from them. Better yet, just build them a prison.
Best Neighborhood Branding Campaign: Over the last couple years, several neighborhoods have attempted to market themselves through a brand, with logos and slogans and everything. This year and the last have given us Anacostia (“Eat, Shop, Live”), Georgetown (“Come out and play”), Midcity (“It’s more than art”), and several hoods (Mt. Pleasant, Brookland, Tenleytown) that advertise themselves as some variation upon “village in the city.” Out of all those, only NoMa’s tagline—“Connected”—really speaks to the niche the neighborhood is trying to fill. NoMa sits on a train station, a Metro line, and a major bike trail, all of which have brought enough people through it to create an actual place. Transit is a hell of a selling point.
Best Temporary Thing: You might call 2011 the year of the pop-up: Restaurants, galleries, stores, and window installations appeared for short periods in all areas of the District, usually in hopes of bringing attention to an empty space. Of all of those, though, the most significant was Occupy D.C.’s planned “peoples pentagon,” which only made it to wood frame stage before the Park Police forcibly dismantled it. If completed, it was to host general assemblies and sleepers on the coldest nights of the winter to come, while serving as a model of green architecture. The idea stuck in our heads, even if the structure didn’t quite make it.
Illustration by Jandos Rothstein
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