Morning Real Estate Review

U.S. builders start most new homes since 2008 (Independent Mail) The Commerce Department released information that housing starts on single family homes and apartments grew 6.9% in June, the largest number since October of 2008.

Host Hotels buys Grand Hyatt in downtown DC (USA Today)  The 888 room hotel has reportedly sold for $400m, in a deal that will close by the end of the month.

World Trade Center Signs GSA Lease (The Real Deal)  The 230,000 s.f. lease for the federal government pushes the building past the 50% leased mark.

JBG Rosenfeld and Bozzuto close on Gaithersburg project (Wall Street Journal) The development giants have purchased 20 acres of land at Downtown Crown to build 260,000 s.f. of retail by JBGR and 538 apartments units by Bozzuto.

West End Hotel Ready to Start Construction

The future Hilton Garden Inn in DC's West End

In a deal that marks a step forward for a hotel project at 22nd and M - on hold for four years - developers are set to close Wednesday on construction financing for the project, OTO Development CEO Corry Oakes told DCMud.

If the deal closes today and construction moves forward in a few weeks as developers expect, deep-rooted weeds on the prominent corner in DC's West End neighborhood may soon be gone, salving neighbors' ire.

"We're very excited about moving this long-awaited project forward and becoming part of the community," Oakes said.  He said contractors would break ground on the Hilton Garden Inn, planned for 2201 M Street, within weeks.

Turner Construction will be the general contractor on the project, Oakes said.  OTO, based in Spartanburg, SC, is one of the three developers partnering to build the West End Hilton Garden Inn, a partnership which also includes Starwood Capital Group and Perseus Realty, LLC.  Also Wednesday, the three partners were due to close on a deal consummating their joint venture agreement.

Shalom Baranes of Georgetown is architectural firm designing the terracotta and brick, 10-story, 237-room hotel, which will feature a second-floor, landscaped courtyard, meeting rooms, a rooftop garden and pool and a green roof, according to a project architect.

The corner of 2nd and M has been an empty lot for years

The 15,600 square-foot lot at the corner of 22nd and M hasn't seen action since 2008 when the site's original development team demolished the Nigerian Embassy to make way for a boutique hotel. Developers later abandoned plans for a Starwood "eco-luxury hotel", billed as a "1 Hotel", when they couldn't secure financing for the structure.  They settled on the Hilton Garden Inn brand instead, but by the time developers applied to revise their permits, many neighbors and West End leaders had already gotten excited about the "1 Hotel" concept.    

"During the zoning hearings, I was not shy about my disappointment that the concept switched from the 1 Hotel to the Hilton Garden Inn, as I felt the West End really didn't need more hotels and at least the 1 Hotel was interesting, both as a destination concept and architecturally," West End ANC2A commissioner Rebecca Coder wrote in an email to DCMud Monday. "However, at this juncture the neighborhood simply wants the corner activated."

Developers abandoned plans for this "eco-luxury" hotel

In the project's beginning, developers included Starwood and Perseus with Oppenheim as the architect.  Original plans for the site called for a 150-room, 23-suite hotel, under the Starwood Capital "global eco-luxury" hotel brand "1 Hotel", featuring an organic day spa among other features built to LEED standards.

Years passed.  The lot sat empty, but D.C. wasn't the only place so-called "eco-luxury" hotels, envisioned to cater to a niche market of über-wealthy lovers of greenness and light, weren't sprouting.  According to HotelChatter.com, Starwood's plans for a 1 Hotel in Seattle were withering too, along with the economy. Starwood started excavations for a 1 Hotel in Seattle, but later re-filled the hole and the lot reverted to a parking lot when it couldn't secure financing for the project, according to the Seattle Times.

Then, sometime between the nadir of the financial crisis and the birth of Occupy Wall Street, developers decided to change course on plans for 22nd and M after Perseus contacted more than 40 lenders, all of whom declined to finance the West End 1 Hotel project.

In 2011, developers sought permission to modify the site plans and instead of a boutique eco-luxury creation, they announced plans for a Hilton Garden Inn (a brand categorized as upscale mid-priced) with 237 rooms.  The new incarnation now included Shalom Baranes as the architect, and OTO Development, a hotel development company based in Spartanburg, South Carolina, as a third development partner.  Changes included a redesign of the exterior façades, an increase in the number of rooms and a three-foot reduction in height to 107 feet, and 53 parking spaces in a valet-operated garage.  There were neighbors who balked.

Plans for the Hilton Garden Inn at 22nd and M, West End, DC

"Some neighbors have already said they fear the new hotel will attract "the fanny-pack crowd" to the West End neighborhood," the neighborhood group West End Friends wrote on their web site last year after an ANC2A meeting when developers presented their new plans.

But if hotel site plan changes sparked West End fears of fanny packs, site developers and project architects maintain there is no need to fret about that.  "This is very much upscale for the Hilton Garden Inn brand," lead project architect Patrick Burkhart said.

Burkhart said the hotel would feature a second-floor, landscaped terrace with outdoor seating areas, and a lobby with a fireplace, monumental staircase, and a water feature with plants cascading from the second-level terrace.  The hotel will also feature a ground-floor restaurant and bar with indoor-outdoor seating opening onto the street on the corner of 22nd and M. Burkhart said the hotel marks a move by the Hilton Garden Inn brand into more urban areas, including D.C. where he said it would be the District's third.

West End Hilton Garden Inn, Washington, DC

With a new hotel, the corner will see more activity in years to come.  Demand is up for hotel rooms in the District.  According to Jan Freitag,  Senior Vice President with STR Global, a hotel industry benchmarking and consulting company based in Hendersonville, TN, data shows 10.5 million rooms were sold in the first five months of this year in the Washington, D.C. market, 1.5 percent more than last year.  "More people are coming to DC."

At least some of those people may soon be destined for 22nd and M.  Lucky for the West End, even fanny packs can be luxurious too.

Morning Real Estate Review

Silver Line Marks Milestone (Transportation Nation) Builders of the Silver Line to Dulles Airport put in place the final span of the bridges that will carry the rail through its first phase of construction, expected to complete in late 2013.

"For Sale By Owner" founder resorts to using broker to sell his home (Daily Mail) Online market spent 6 months trying to sell his $2m New York City flat through his website, then gave in and hired a real estate agent who got above asking price.

Council Member Graham's Heavy Hand in Metro Award (Washington Times) Graham improperly used his office to steer Metro development project to a donor.

Mortgage Rates Hold Steady at All Time Lows (Mortgage News Daily)  While the stock markets have been moving and Bernanke has begun his testimony before Congress, rates are staying stable.

Number of borrowers falling Behind on Payments Flattens Out (HousingWire)  After dropping earlier this year, borrowers falling behind on mortgages rose to 2.5% in June, as Bernanke calls progress in housing market "frustratingly slow."

Today in Pictures - Francis A. Gregory Library

The Francis A. Gregory Library opened on June 30th at 3660 Alabama Avenue. Like the Bellevue library, which opened in early June, DC's newest library was designed by a partnership of Adjaye Associates and Wiencek & Associates, with Jair Lynch as the development manager.

Washington D.C. real estate development news

NDC's Renovates Columbia Heights Eyesore

Local developer The Neighborhood Development Company (NDC) has commenced work on Columbia Courts, an 11-unit boutique condominium project at 1225 Fairmont Street, NW in Columbia Heights.  Columbia Courts will replace the unattractive apartment building at the same address, the appearance of which has been even worse by sitting vacant and unkept.

"We just recently broke ground," says Juan Powell, Principal at NDC.  "Well, I shouldn't say break ground - we're doing a comprehensive renovation of the existing structure.  Gutting it, redoing everything.  We started renovations last month and we expect to be done by September or October."

NDC won the rights to redevelop the building at 1225 Fairmont through a competitive solicitation process overseen by the District of Columbia Department of Housing and Community Development (DHCD).  The property had previously been under the control of the Development Corporation of Columbia Heights (DCCH), which, in conjunction with five tenant households, made a winning bid of $427,000 for the property at a 2001 HUD auction.  But by 2010, the building had fallen vacant, and the District was soliciting bids for a new development.

Columbia Courts will feature a large interior landscaped courtyard, balcony units, and below-grade parking. And while all the units will be designated "affordable," they will all include finishes such as "wood floors, hard surface countertops, and stainless steel appliances."

NDC Builders, an affiliate of The Neighborhood Development Company, is the general contractor on the project, and PGN Architects spearheaded the redesign.

Washington D.C. real estate development news

Your Next Place

Yes, another penthouse.  What can I say, penthouses are spectacular!  Do you really want to read a post about a basement efficiency?  How about this, if you're really sick of penthouses, just sit down, write a letter outlining your specific objections, and then tear that letter up into little pieces and throw it away, because come on, man!  I'm doing my best here.  (Sort of.)

This spectacular two-level penthouse is the perfect intersection of quality and location.  On one hand it's got tons of windows, high ceilings, and gleaming hardwood floors.  Downstairs boasts a fireplace and a chef's kitchen, and upstairs you have three bedrooms and a stunning roof deck from which you can see the Washington Monument.  And on the other hand, it's perfectly situated just a couple blocks above U Street, and a few blocks below Columbia Heights.  Anything, literally anything, you could possibly want, you'll be able to find in one of those two neighborhoods.  Unless you're a perv, in which case you'll have to go to, like, Thailand or something?

The penthouse also comes with garage parking, and access to the enclosed courtyard below.  Also, I have reason to believe that this building is a lucky one.  True story: I attended a party here last summer where I met the girl of my dreams.  We hit it off and left together, it was perfect.  And then on the way home she got pulled over, failed her breathalyzer, spent the night in jail, and never responded to any of my subsequent texts.  So yeah, the building is lucky, the intersection down the block, not so much.

1421 Chapin Street NW PH-302
3 Bedrooms, 2.5 Baths
$754,900

Sentinel Square, Trammell Crow's Three Phase NoMa Project, Reaches Halfway Point

Trammell Crow's massive three-phase NoMa development, Sentinel Square, is officially at its precise midpoint.

"We just hit the bottom of the hole for Phase 2," says Tom Finan, Managing Director at Trammell Crow.  "Now we're starting to work our way up.  We broke ground back in February and we're on track to deliver in October 2012."

The Phase Two office building, at 1050 First Street, is slated to offer approximately 280,000 square feet of office space over twelve stories.

The Smith Group/JJR-designed building may or may not feature ground floor retail space.  "That's something we're going to look at," says Finan.  "It's going to depend on the market.  That intersection is becoming a sort of crossroads for that area, so it might be a good idea.  But as of right now, it's still up in the air."

The first phase, a similar but larger 12-story 400,000-s.f. LEED Gold office tower, also designed by Smith Group/JJR, was delivered in June 2010.  The third and final phase, another office building, is still in pre-planning stages.

"We're not going to really get down to Phase Three until we have the second phase delivered and leased and stabilized," Finan said.

Sentinel Square II was financed on spec by European companies Helaba and Nord LB, which collectively put up $181 million towards completion.  Though financing a project of this scale on spec is somewhat unusual (but so were 1812 N. Moore and CityCenter), investors were reportedly reassured by the fact that Trammell Crow has already leased 85% of Sentinel Square I, to such tenants as the Department of Veteran Affairs, and other federal agencies.

Washington D.C. real estate development news