The building, 1025 Connecticut Ave., is one of Blake Real Estate's trophy holdings. Called the Blake Building and built in 1969, it is still held by the original owner--a rarity in the District, especially after the recent run up in investment sales prices.
Stephen Lustgarten, EVP at the firm, tells GlobeSt.com that when the renovations are complete the firm will likely raise rents $2 per sf to $2.50 per sf, depending on the market's activity. Rents have been, obviously, rising in the District for the last few years, he adds. "We believe tenants should get more for their money." Occupancy at 1025 Connecticut is between 94% and 95%, he says. The last time the building was renovated was in 1998.
The bulk of the upgrades will be devoted to a major mechanical overall of the building's systems, including the installation of a new heating/cooling system, the replacement of all 462 induction-units with new fan coil units; the replacement of all existing air handling units on tenant floors; and the addition of energy management controls for the entire building.
Also planned are new stone floors in elevator lobbies and new carpeting and wall coverings in common area corridors. On the building's exterior a new stone border around the building, decorative lighting, and a new coating for the cement facade surface will be installed.
Blake Real Estate owns half a dozen or so office buildings in the immediate area--many of which have been part of its portfolio since the 1960s.
Lustgarten says the company is unlikely to divest of its holdings, despite the huge investment sales prices realized in recent months. "If we were to sell then we would have to redeploy our capital. We make a better return keeping and improving what we have."
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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.
