However, he adds, there are some potential buyers that are becoming cautious about condo plays. Construction costs are rising steadily, interest rates are set to start rising and mortgage rates have jumped since the US presidential election. “Some developers are starting to hang back, sit on the sidelines now. They tend to be older companies that are having trouble shaking off the memories of the last cycle or remember when a particular lot or property traded at a much lower price point,” Fitzgerald says. But these developers are a tiny minority, he says, pointing to the multiple offers for 1101-1109 Q St.

Of course, it's not as though all the other developers have developed collective amnesia — they also remember the condo conversion crash of seven to ten years ago. To date, however, the intense competition for properties has not allowed them to hang back. The returns are too good to pass up these offers, Fitzgerald says. “The math still works for luxury condos in the District.”

WASHINGTON, DC–A popular play for developers in the Washington DC area has been to buy small, urban infill properties to redevelop into luxury condos. And so it went for 1101-1109 Q St. NW recently — a partially occupied multifamily complex consisting of three contiguous buildings that were built in 1911 and that sit on a 6,223-square-foot lot. They are just north of the Shaw Historic District and northeast of the Logan Circle Historic District.

As is typical for Logan Circle specifically and multifamily/ condo development opportunities in general, the marketing process, led by Marcus & Millichap's Grant Fitzgerald and Marty Zupancic, went well and yielded 25 written offers. The property sold for $3.5 million, 16.7% above the list offer.

The seller was the estate of two brothers whose family had owned the property since the 1920s and the buyer is a local developer, who plans to convert the property into luxury condominiums.

Luxury condo product in DC has become much more viable in the past five to ten years, Fitzgerald tells GlobeSt.com. “The prices per square foot keep rising or are remaining steady.” In the Logan Circle area that means about $800 or so per square foot.

However, he adds, there are some potential buyers that are becoming cautious about condo plays. Construction costs are rising steadily, interest rates are set to start rising and mortgage rates have jumped since the US presidential election. “Some developers are starting to hang back, sit on the sidelines now. They tend to be older companies that are having trouble shaking off the memories of the last cycle or remember when a particular lot or property traded at a much lower price point,” Fitzgerald says. But these developers are a tiny minority, he says, pointing to the multiple offers for 1101-1109 Q St.

Of course, it's not as though all the other developers have developed collective amnesia — they also remember the condo conversion crash of seven to ten years ago. To date, however, the intense competition for properties has not allowed them to hang back. The returns are too good to pass up these offers, Fitzgerald says. “The math still works for luxury condos in the District.”