Rite Aid Closing at 13th and U St, NW this July to Make Way For Planned 135-unit apartment project?

13th and U Street, NW

“Dear PoPville,

Any word on when JBG is planning to break ground on the 1300 U St NW site?

The company completed an HPRB review just about a year ago for an 8-story residential building with ground-level retail to replace its existing one-story building taking up most of that block. And, other than Rite Aid, all of the stores in the building (Wydown, Pizza Hut, Al Crostino, etc.) have moved to JBG’s Louis on 14th or Georgia Ave. Seems like all of their ducks are in a row, but that they’re just selling window-based ad space for DCityStyle right now instead of starting construction.”

I spoke with a worker at Rite Aid who says he hears they’ll be closing July. Washington Business Journal has reported:

“The JBG Cos. is planning to develop a 135-unit apartment project at 13th and U streets across from the U Street Metro station. JBG applied to the District in the fall of 2012 to demolish a one-story Rite-Aid at the site to make way for its planned eight-story building, which will include 15,000 square feet of retail space.”

Though UrbanTurf reported:

“Louis, a currently under-construction apartment project at 14th and U Street NW, and another project around the corner at 13th and U Street, which is in the planning stages, have been put up for sale by the busy firm.”

It’s not clear if the proposed sale will delay the construction at 13th and U but based on what the Rite Aid employee said – I’d guess we’ll see construction start around July/August. More info when it becomes available.



36 Comment

  • My understanding is that they had to make some last minute changes to the plan previously approved by the HPRB because of additional privacy required for the Rite Aid (which will be a carry-over retail tenant), and needed to submit for reapproval as revised, hence the detail.
    I suspect the sale would have little impact on timing, as the design & construction contracts would probably just be assigned to the new owner.

  • Interesting that they are trying to cash out of both projects right now.
    I don’t think this is a good sign. Especially selling a planned development.

    • Actually very common to sell before completion/leasing in DC, because of the Tenant Opportunity to Purchase Act. Much more difficult to sell once you have tenants.

      • bingo. TOPA laws make it much more difficult to sell an apartment building in DC once you have tenants. Tenants can use TOPA to make a sale potentially take an additional 1-2 years even if the tenants have no intention or wherewithal to purchase the building they live in.

        Couple that with a still relatively robust demand from investors for new apartment buildings in DC despite the coming flood of new inventory (and associated growing lease-up risk) and its close to a no-brainer to sell before your tenants move in if you get a price that is in the ballpark.

      • The selling of the nearly completed building does not worry me. That’s been the case for nearly every rental building that’s gone up on 14th Street. The issue that concerned me is that they are selling the 13th/U Street parcel without developing it. It’s obviously in a prime spot, but for some reason they think that it’s smarter to cash out now than build and try to sell it in 2-3 years time. My guess is that they don’t see a lot of upside profit potential in developing the new building (aside from recouping their construction costs). They see it as a risky bet and that the market will have already plateaued (or even softened) by that point.

      • saf

        Yep. The building that the new Petworth Safeway will be in is already up for sale.

    • While I can see your cause for alarm, I personally don’t find this overly worrisome. I’m guessing that JBG would rather just develop the properties and let others collect rent / etc. This way they get their cash return and can move on to the next project without having anything hanging over their heads.
      But to your earlier point, I agree that we may be hitting some occupancy wall for “luxury” apartments at this moment.

      • Interesting. Either JBG is shifting strategy to become more of a construction company, or they’ve somehow decided against the rental market in that U Street neighborhood. Do they own other large properties in around 14/U? Maybe they’re worried about being too concentrated in one neighborhood.

      • But it sounds like JBG is NOT developing the proposed 13th/U Street site, according to the UrbanTurf rumor. They appear to be trying to sell the lot. Weird, IMO. I think you’re right about hitting a wall for the luxury market in the area. That demand has been largely soaked up, IMO.
        Also, as annonny mentioned, they could be concerned about being overly exposed to the neighborhood. They are also developing Atlantic Plumbing next to the 930 Club and The Shay at Florida Ave/8th Street next to our favorite CVS. It might be too much at once for them.

        • Wrong. They’re selling the project, not the lot, meaning it will be developed as planned and approved by a different developer.

  • Huh – apartments and not luxury condos. Interesting.

  • Why didn’t Wydown just stay there longer? It looks like all other tenants, except for Rite Aid have vacated the space.

  • Anonynon

    Living in this area it would be nice is Louis could finish and we could have a nice quiet spring time and have thems start this in the brutal summer months

    • I hate to be the bearer of bad news, but this area isn’t going to be construction-free for years and years, and with the massive increase in density, it’s never rally gonna be quiet again.

      • Agreed. This area is going to be a zoo in 10 years time. Probably a lot like the Bedford stop in Williamsburg in NYC. The U Street Metro platform will be mobbed during rush hour.

        • It’ll continue to grow until it becomes too expensive. Generally growth in one area of DC has come at the expense of another, so at some point, areas further east will start to see growth as more and more people look for affordable options.

  • I was really hoping this would become a hotel.

  • Sheesh
    U st is going to be different in the coming years
    people on top of people

    it will be a crazy dense area in the near future

    • Have you visited cities that don’t have height restrictions? Go do that, then let’s talk “crazy dense”…

  • I was hoping they could save the historic Rite Aid. Where’s the justice?

    • Hey, I bought my (extremely tacky) Christmas tree there! It should be preserved for eternity or until the optic fiber lighting on my christmas tree doesn’t work anymore.

  • yay, more housing….lord knows we need it………..

    • i continue to be surprised by the nonstop pace for more more more housing in this area, and creeping up to shaw, too. apartments and condos by the hundreds. is there really the demand for all this?? when will it plateau? i thought we would have hit saturation point by now. as others are saying, the density here is starting to get worrisome or at least unattractive, imho.

      • An estimated 1,000 people move to the district every month. That would require 12,000 rooms be built every year to make up demand. Construction in the past years has only built about 3-4,000 rooms / year. It’s catching up this year to about 10,000, but even that’s barely keeping up and not making up for years of not coming close.

        • Yep, and the suburbs are pretty much tapped out already unless they do some massive projects to improve transit infrastructure. I think it was GMU who did a study on this not too long ago…

  • I wish I could find where I read this interesting fact (and I will post if I do find the source – going off memory here) but it is interesting to note that at its peak, the U Street neighborhood had 35,000 residents. Today it has 17,000 residents. With the new wave of people ditching the burbs for the more accessible urban life, I would say we have room to grow.

  • Bye!! This Rite-Aid is the absolute WORST. They never have anything I need. Their corporate office needs to see the opportunity here and stock diff stuff for this location.

  • This really sucks as this Rite Aid was easy to pick up scripts walking home from the Metro. Just what the area needs, more people moving in. They really need to increase the number of turnstiles at the U St Metro. With all the new places coming up that place will be a shitshow.

    • Agreed. I just imagine what is happening in Columbia Heights happening at the U street and Shaw stations, which is terrible lines for people getting out/in of the station at rush hours. (I take Shaw, so I don’t know if this is already the case at U Street).

      • The big difference being that Shaw and U Street have two exits whereas Columbia Heights only has one. WMATA does need to figure out how to put more gates in CH – the rush hour lines are way too long.

  • What is the parking situation for this new building??

  • This building has always been a tax building. Glad the proposed design looks good!

  • Someone at Rite Aid told me it was going to be a hotel, not apartments, with retail space on the first floor.

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