(To read more on the multifamily market, click here.)
WASHINGTON, DC-KSI Services, Inc., one of the city's largest developers, is expected to begin work on the second of two buildings at the end of the year. The company, which is involved in projects that range from high-end, class A multifamily to mixed-use development to affordable housing, has received a $4-million loan to complete the $25-million redevelopment in Columbia Heights.
KSI, which took over the project in 2001 for $12 million, got the financing came from the Department of Housing & Community Development. The first building, Fairmont 1 at 1400 Fairmont St. NW, was completed in June 2005. The 100 units are now fully occupied by many of the original residents, a KSI spokeswoman tells GlobeSt.com. Fairmont 2, located at 1401 Fairmont St, is mostly two-bedroom units, but will be getting six three-bedroom apartments with the retooling. Fairmont 1, also predominately two-bedroom units, had seven larger units added to its mix.
The buildings are getting upgraded electrical and mechanical systems, controlled access entry and fire sprinklers, new flooring in the kitchens and baths. The Columbia Heights project was developed at least 30 years ago.
Besides the Fairmont, KSI owns and manages Belmont Crossing and Woodmont Crossing, also affordable housing complexes inside the city limits. The KSI spokeswoman says the firm would consider pursuing another affordable housing project if the opportunity presented itself.
Herman Bulls, president and CEO of Bulls Capital Partners, a Fannie Mae/DUS special lender in Vienna, VA, tells GlobeSt.com that $4 million for a 100 or so unit complex is a healthy sized subsidy for the Washington, DC region. He says it most likely was the only way the project's numbers could have worked. "Its size shows that the DC government is serious about providing safe and comfortable housing to its residents," he says.
A $4-million subsidy translates into slightly less than $40,000 per unit, with the total cost to the developer likely to be around $80,000 to $100,000 per unit. Bulls says his firm currently is working on a few affordable housing deals in Arlington County, VA, but he's not yet able to discuss the details.
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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.
