Sources say the two firms purchased the land earlier this year for roughly $30 million--a price that included not only the raw land, but also demolition, building plans and related infrastructure.
Development costs for the 11-story, class A building is roughly $400 per sf, Doug Bowen, portfolio manager for ING Clarion Development Ventures, tells GlobeSt.com. "This is an excellent location. We love its proximity to Union Station and we have a terrific partner," he says. Union Station is Washington, DC's largest indoor mall and its Amtrak hub as well as its busiest Metro station.
Construction is expected to begin in November, according to Brookfield Properties. Other building features are a rooftop terrace, private fitness facility and on-site management.
Brookfield Properties is the managing member and developer of the 50-50 joint venture with ING Clarion. Upon completion, the building will be managed by Brookfield Properties and leased by Blane T. Dodson and Kerri A. Mulligan with local firm, Cassidy & Pinkard Colliers.
In recent years Capitol Hill has seen a spike in development, which has slightly increased the submarket's overall vacancy rate, Tonya Ginter, director of Research for GVA Advantis, tells GlobeSt.com. "There is quite a lot of space that has become or will become available that still has to be leased up," she says. Ginter points out that 77 K St. NE will be competing for tenants against 25 Massachusetts Ave., which delivered earlier this year and is not fully leased, and 20 M St. SE, planned as a May 2007 delivery. She says rental rates are averaging $45 per sf on Capitol Hill.
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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.
