District Condos Coming to 14th and S St, NW – Now Going Rental

Thanks to all who sent emails yesterday. Back in Oct. ’10 we learned that:

“When completed, the building will be seven stories and will offer 125 sleek condominium residences.”

Following are the new plans sent by JBG:

“We are very excited about a new direction we are taking to better meet the demands of this burgeoning neighborhood. Since launching the project, we have continued to assess the residential market in the Washington, D.C. area and in the Logan Circle neighborhood. The building is on course for delivery in the fall of 2012, and we have decided to launch the project as a boutique apartment building rather than a condominium building as originally conceived. We believe this new building will be an excellent compliment for the neighborhood and the community, and is an affirmation of the strength of the apartment market in D.C.

While we have received significant interest in the condominium residences we are very excited for the apartment building, which will be called The District. The building will have all of the same features, amenities and level of finishes as previously planned: a lobby lounge, fitness center and extensive rooftop terrace. Residence features will include floor-to-ceiling glass, hardwood floors, beautiful European cabinetry, and expansive private balconies and terraces. An elaborate rooftop terrace amenity area will feature outdoor living rooms, an outdoor kitchen and bar, a fire pit, water feature and a sundeck.”

Rendering courtesy of Shalom Baranes Architects

43 Comment

  • “District Rental” what?

  • Seems like bait n’ switch to me! I don’t know about anyone else, but I think that a condo owner tends to have more investment in a neighborhood than a renter.

    Did they need any approval from the ANC, DCRA, etc for this project? If so, I’d like to know if there are (or could be, should be) any consequences for such changes.

    By no means am I saying renters are bad or condo owners are good – just that a neighborhood probably benefits more from those who invest in home/condo ownership than renters that tend to pull up stakes quicker.

    • I think a neighborhood actually benefits more from having a diverse population of people at all income levels. Rental can foster that by bringing in people at a lower price point, or just a different stage of their lives.

      DC is a transient city, and transient people need rentals.

    • I dunno. I think the neighborhood will benefit from those who are able to pay upwards of $2000 for a tiny 1 bedroom apartment. These are people who obviously have spending power and will support the local businesses coming up on 14th Street as it continues its transition into a major shopping and dining thoroughfare. In that, you do lose some of the people who really care about the neighborhood in that I-plant-flowers-in-the-treebox-outside-of-my-rowhome kind of way, but you do gain something as well. Also, this will attract people who may have otherwise lived in VA, which, say what you will about them, means more tax dollars for the DC government to mismanage. Hooray!

      All snark aside, I think this is a good idea, especially because (if I recall) their plans for the units were for small 1 bedrooms and studios. Those are more appealing to renters than potential buyers anyway.

      • Agreed.

        When fixing up a neighborhood, a great rule of thumb (at least for DC) seems to be encourage people who want to own to buy row-houses and renters to pay for up-scale apartment living.

      • Actually, renters would also prefer large one bedrooms to small one bedrooms and studios… but in DC, these are a bit expensive.

    • I also wonder if there are any consequences to to changing it after the approval from DCRA. My guess is no

  • We believe this new building will be an excellent compliment for the neighborhood and the community, and is an affirmation of the strength of the apartment market in D.C.

    Translation – people are lining up to pay $1700 a month to live in an unrenovated shoebox basement apartment in this area, so we’re going to hold onto this money maker until we see weakness in the rental market and sell them as condos for a ridiculous amount of money.

    Oh, and we get to cheap out on the appliances and finishes and avoid all the annoyances that go with launching a new condo.


    • I don’t think it’s that simple. You can’t build an apartment building and then just magically convert to condos. There is a long and painful process.

      Once this building is apartments me thinks they are going to remain apartments for the foreseeable future.

      Also, just based on a “feeling” and no hard evidence, I would tend to agree with 11:18 AM Anonymous above about investment in a neighborhood.

      • I dunno; when I had to leave the Embassy Apartments because they were going condo, it didn’t seem too traumatic for them.

        • saf

          Hey, I used to live there – even in the 80s, our lease said it was a condo building even though it was all rental.

      • How painful it is all depends on the current tenants.

        People who are paying $2400 a month for a 1 bed + den aren’t going to complain much when they are asked to either buy their place below market rate or find another place to live.

        The painful process is when there is a rental building where tenants have been for 10+ years and the neighborhood is now demanding much higher prices, and the building owner is chomping at the bit to cash out to a developer. That’s where the real dance begins. A lot of tenants aren’t able to buy their places and also cannot move anywhere else within the immediate area for the same rental price.

        There was that “95/5 rule” allowed years back thanks to our corrupt lawmakers within the city that allowed a building owner to sell 95% of the building one year, and then the remaining 5% the next, to sidestep DC’s relatively strict tenant rights regarding condo conversions. So Columbia Heights dwellers – you can thank the 95/5 rule for speeding up the ROI on your property.

      • I moved into the Allegro back in 2009 when they had converted it to apartments and I asked about the likelihood of turning it back into condos within a few years. The response was that the process of turning it into apartments was lengthy (both in permits and financing) and this made it difficult for them to suddenly turn around back into condos. The financial aspect was the big hurdle, lots of guarantees and string-attached to the deal. It could happen, but not for the foreseeable future.

    • Also, it’s a lot easier to get financing for multifamily rental right now than a condo building. Particularly if any part of it will be classified affordable (and for the scale, it should be based on what I remember from the DC IZ code).

  • There has to be demand for 1br condos in the 200k range rather than the 300k range. Isn’t there a developer interested in selling to that market. There has to be a pool of youngish professionals with decent salaries but can’t buy a 300k condo due to student debt and 60k down payment requirement. A 200k condo might also be in reach for a cop or teacher w/ some savings and a few years on the job. I know it won’t happen in the U-Street area or other “hot” areas but isn’t there a neighborhood where that model would be profitable to a developer?

    • Why would someone be interested in that when people will gladly by $300K condos? DC is trying to evacuate itself of the poor, and by poor I mean anyone making under $60K (including myself).

    • Actually one bedroom condos are usually considered a bad investment no matter he price. Sure it sounds like a great way to enter the property ladder but they can be harder to resell.

  • To paraphrase – “We realized that DC has a very tight rental market, so we can make more money from renting these units than by selling them.” The design, however, quite unique. It doesn’t look anything at all like all the other apt. and condo buildings going up in the city.

  • Didn’t the same thing happen to the building further up the street – I think at W and 14th? It was meant to be condos then switched to rentals where I think studios are 2000K a month.

    • Yes. And the same thing with the Allegro (?) Apts at 14th and Otis. I think that was planned as a condo project. This phenomenon has happened all over the city. I think Denizen of Tenley is correct.

      • Yep, it happened at Allegro. My buddy had put a deposit down on a condo there before it was built. A year later he got a letter in the mail saying somethine like, “we are returning your deposit because we’re going to make them apartments instead. But good news! If you would like to lease an apt, you will be at the top of the list!” Still makes me laugh. The gumption of the offer to lease killed me.

  • Right, why would a developer build a 200k condo when there are folks lining up to buy 500-750k condos? It would be throwing money away.

    • There are luxury cars and there are reliable Honda Accords. I am not suggesting building a 200k condo @ 14th and U but why not on Georgia Ave north of Petworth Metro South of Maryland / DC line? When you factor in cheaper land accqusition costs I find it hard to believe a developer could not turn a very nice profit.

      • If car makers could sell more luxury cars, they would. In your analogy, these cheaper cars exist as cheaper condos in other parts of the city. There are cheaper condos compared to U street closer towards maryland (north Petworth, silver spring, along Georgia ave, etc).

        • New Construction? Then I have not seen it. Also I think there would be considerable incentives offered by the city to build at that price

          • There’s a place on (maybe) Taylor, and maybe one on Longfellow, where prices range from 199K to 299K. Not sure if they’re for sale yet or already sold out.

          • There are a lot of construction projects going on in Silver Spring, but they’re all rental. That’s what the market dictates today and that’s what’s easier to get financing for. Obviously that’ll will change, but it probably will take a bit of time. I foresee condo owners being able to make a tidy sum in the mid-term, with demand outstripping supply as growing numbers of empty nesters and 18-35 year olds look for home ownership without the hassles, $$ burden, and lower quality of life that you get from auto-dependent, large lot single family homes.

  • To be fair, a city does need a certain number of rental units that aren’t cheap and nasty. There will always be who can afford a substantial rent and who do not want to live permanently in an area.

    Also, I don’t think there’s anything wrong with the prices on 14th street being too high for many. 14th street is at the heart of the restaurant and shopping area of the city. It’s silly to think it should be affordable for someone making $40,000 to buy there. Just like people before you, move to an area in the city that is more affordable and wait and hope your investment pays off.

    • See, I think DC lacks rental property that IS cheap and nasty. I’d love to live in a cheap, hole-in-the wall apartment so I could have my own places, but you can’t even get a basement for under $1500 easily. So it is me and the roommates for the foreseeable future.

      • It doesn’t lack cheap and nasty rental property. I think what you mean is it lacks it in the areas you would want to live in.

  • I wouldn’t be surprised that interest didn’t translate into purchase.

    My brother who is savvier when it comes to real estate financing than I, said that many of the projects get a lot of financing based on pre-build purchases. Meaning that of the 100 units, x number have to be purchased before work really starts before loans can (or at least) will be granted. Basically the fact that some have already sold indicates to the bank that this loan has a chance of being repaid. Which may be why many of the condo projects after the real estate bust went apartment.

  • I can understand (sort of) why owner-occupants in condo buildings prefer that their fellow owners also live in the building and not rent their units out, but I don’t buy that whole neighborhoods are better off with condo buildings instead of apartment buildings. The renters who will end up in this building will largely be young professionals with lots of disposible income. They’ll spend their money in the local bars and restaurants, and they won’t commit crimes. I fail to see how things would be much different if they bought their units instead.

    • The school of thought is that property owners within a neighborhood are more invested in improving the neighborhood because it secures and/or improves the value of their respective properties. Owners, generally, also have a harder time moving out of a neighborhood, especially if leasing is not an option.

      That being said, I have a feeling that once rentals are over the $2000 mark, rent vs. own doesn’t make that much a difference on the neighborhood since by that time, the neighborhood has already been improved to the point where a $2000 rental rate is justified.

      • Yep, in a city like DC where there’s an extremely high cost of living, you’ll have plenty of people making a lot of money who still can’t afford to buy, lots of whom will be long-term residents who care about the neighborhood.

  • As a property owner in the neighborhood I’m always thrilled to see solid well planned development. Flooding the area with more rentals however will not help the value of the existing owner occupied condos. Nor as others have mentioned will it help strengthen community values in this corridor which suffers from crime, weak social fabric and minimal city services.

  • Right, because the Hudson and Desoto on the 1400 block of P Street are such dumps. They really hurt the property values in that area. So much so that the condos and houses around that block are some of the most expensive in the City. Get a grip, people. This is a transient city with many younger professionals earning well over $100k who aren’t ready to invest in a $300k+ condo. But they are the ones shopping at the stores and eating at the restaurants, making the neighborhood a much better place to live. A well-executed apartment building like this one will be a great addition to the neighborhood.

  • What’s up with the cookie cutter design? It already looks dated.

Comments are closed.