Nonetheless, the tight vacancy rates in this submarket, the still frantic sales activity in most of the District, lack of developable land in the nearby CBD and affection many tenants have for old DC buildings all point to a shrewd investment on Douglas' part. "Buildings like this, in fact, are in short supply in the DC market," says CB Richard Ellis' Bill Prutting Sr., who represented both parties along with Mike Williams in the transaction.
The six-story building, located at 722 12th St., was built in 1903 and designated as a DC historical landmark property in 1985, according to CBRE. It has been placed on the National Register of Historic Places. In 1989 it underwent a major renovation.
"The building is still in reasonably good shape," Prutting tells GlobeSt.com. He says that Douglas plans to make capital investments in the building and then reposition it for lease. Asking rates, he says, are likely to be in the mid to upper $30s. Also, part of the first floor may be converted to retail space.
Douglas Development has experience in redeveloping DC's old office buildings, Prutting also notes. It has, for instance, redeveloped 1025 F St., a historic building that once housed the Woodward & Lothrop department store, as reported by GlobeSt.com.
"Douglas Development does a wonderful job of upgrading and then repositioning these buildings," Prutting says. "They were particularly aggressive about acquiring this one since it is very close to the Metro."
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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.
