(To read more on the multifamily market, click here.)
WASHINGTON, DC-Development in southeast Washington continues at a rapid pace fueled by the recently approved Washington National's $611-million baseball stadium currently under way and, more recently, Anacostia Waterfront projects. The common denominator to all these largely, mixed-use initiatives is a push to provide housing to as wide a variety of income levels as possible.
"There is a tremendous need for affordable housing in the Greater Washington DC area, Ryan Sfreddo, senior vice president of CharterMac Capital, a subsidiary of CharterMac tells GlobeSt.com. It is a situation worsened by annual cost of living increases, which he says are more than 20% over the national average in the city.
Earlier this month, CharterMac announced it has provided over $19 million in debt and equity financing to William C. Smith & Co Inc. and East of the River Community Development Corporation for the revitalization of a 257-unit affordable housing property in the southeast section of Washington, DC. The complex, Southview Apartments, includes plans to expand to 1,500-units. Other plans are centered around the 110,000 sf Town Hall Education Arts and Recreation Campus. It is the third Washington area affordable housing initiative CharterMac has partnered with Smith, Sfreddo says.
Housing at the higher income end is also tight and in great demand in southeast, according to Sheldon Stein, president of Valhal Corp., Capitol Hill Towers' development company. "The whole area has been exploding around us. Essentially almost every developable block is in some phase of building or redevelopment."
The co-op sales are going well, with the development 55% sold at $450 per sf to $600 per sf. Income in the Washington DC area is so high that this product could be considered at the low end, Stein says, although it is not affordable housing in the traditional sense. He expects the project to close within six months. Meanwhile Valhal is currently looking at other residential projects.
"We hope to remain very active for the foreseeable future," he says. "I think the real story in southeast DC these days is that a lot of people are still surprised that an area that was considered dangerous ten years ago has turned around and people are paying good sums of money to live here."
Last week the District's City Council passed three pieces of economic development legislation that will facilitate funding for many of the projects underway in the area, including a $1.5 billion new Southeast Federal Center neighborhood proposed by Forest City that will provide over 2,700 units of residential housing, a new park and riverfront esplanade and new infrastructure. Another mixed-use project under the Anacostia Waterfront Initiative, the Waterfront Small Area Plan, will also have residential housing as well as 14 acres of parks and open space.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
