WASHINGTON, DC-A spin off or separation of New York City-based Vornado Realty Trust's Washington DC assets is still very much on the table for the REIT, CEO Steve Roth said during the REIT's latest earnings call. That company, 'Washington Co.' will be well-capitalized to continued Vornado's development plans for Crystal City and Pentagon City.
The REIT plans to develop more than 2,600 units in Pentagon City in addition to the ones it already has. It will also develop another 3,000 units in Crystal City. In the immediate term, it plans to develop 577 unit next to Bartlett. Last month the Arlington County Board approved Vornado Realty's site plan for a new apartment building within the Metropolitan Park development in Pentagon City called Metropolitan Park Central Park. Ground will break early next year.
After that, the sky is the limit, it seems, based on Roth's comments during the earnings call. “We want to get as many of those Bartlett buildings, we want to build the next one immediately, the one after that quickly, and more and more and more.”
One reason for this enthusiasm is the success of the nearby Bartlett, a 699-unit apartment complex that Vornado just delivered. It has achieved a 45% lease up rate in its first two months -- far ahead of the REIT's underwriting, Roth said. “The success of Bartlett validates our plan to emphasize residential new builds on our nearby vacant land inventory and on select sites created by teardowns of older office buildings in Crystal City,” Roth said.
These plans will move forward whether the DC operations remain part of Vornado or are separated, Roth said. “Washington Co. or the spinco, will complete its development and complete its mission,” he said during the earnings call.
“If we separate the businesses, the new business will be capitalized to complete its development mission for sure.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
WASHINGTON, DC-A spin off or separation of
The REIT plans to develop more than 2,600 units in Pentagon City in addition to the ones it already has. It will also develop another 3,000 units in Crystal City. In the immediate term, it plans to develop 577 unit next to Bartlett. Last month the Arlington County Board approved Vornado Realty's site plan for a new apartment building within the Metropolitan Park development in Pentagon City called Metropolitan Park Central Park. Ground will break early next year.
After that, the sky is the limit, it seems, based on Roth's comments during the earnings call. “We want to get as many of those Bartlett buildings, we want to build the next one immediately, the one after that quickly, and more and more and more.”
One reason for this enthusiasm is the success of the nearby Bartlett, a 699-unit apartment complex that Vornado just delivered. It has achieved a 45% lease up rate in its first two months -- far ahead of the REIT's underwriting, Roth said. “The success of Bartlett validates our plan to emphasize residential new builds on our nearby vacant land inventory and on select sites created by teardowns of older office buildings in Crystal City,” Roth said.
These plans will move forward whether the DC operations remain part of Vornado or are separated, Roth said. “Washington Co. or the spinco, will complete its development and complete its mission,” he said during the earnings call.
“If we separate the businesses, the new business will be capitalized to complete its development mission for sure.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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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.
