Located just north of the US Capitol and Union Station, the site can accommodate up to 2.6 million sf of total density. It already has an existing 422,760-sf building on it located at 131 M St. NE. The entire package, according to sources, is expected to trade north of $300 million or more.
As is always the case, location is key. "NOMA, now a submarket of Capitol Hill, is one of the last frontiers in the Washington area when you talk about land and when you talk about proximity to the nation's capitol," says Nick Pappas, managing director of Eastdil Secured LLC, which is representing Bristol. NOMA is within an eight-block proximity of Capitol Hill, he adds.
Activity in recent months has simply exploded, as the submarket received business improvement district status and the $1 billion or so worth of development that has begun to deliver in the area is trading for premium prices.
"There are a lot of developers as well as major sources of capital active in NOMA now that weren't there 12 months ago," Pappas notes.
Tenant demand for space is also expected to be high. Asking rates for the building on Bristol's parcel should be in the mid to high $40s, full service.
It is a historic, six-story, art deco building originally built in 1939. Prior to its redevelopment to a class A structure, it was the Woodward & Lothrop distribution facility. It is estimated that Bristol paid some $30 million to renovate it to its current state.
Currently the ATF occupies one floor on the property, as it waits for its landmark 438,000-sf headquarters to be completed in September. The remainder of the building is available for occupancy and can provide near term cash flow on stabilization.
Pappas says Bristol anticipates it will either sell to a developer or an opportunity fund. The larger strategy would be to lease up and stabilize 131 M St. and either develop the additional land, subject to tenant demand, or wait to develop in the future and benefit from rising land prices.
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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.
