Fannie Mae HQ on Wisconsin Ave to become a Shopping Center

fannie-mae
3900 Wisconsin Ave, NW

Thanks to a reader for passing on this big development news from Nikkei Asian Review:

“The Japanese developer likely will pay 10 billion yen to 20 billion yen ($88 million to $176 million) for the building and roughly 40,000-sq.-meter property located 10 minutes or so from the White House by car. Sekisui House plans to remodel the 60-year-old brick structure into a shopping center while maintaining its stately facade, as well as build luxury condominiums on vacant land.”

Update Full press release:

“Roadside Development, a privately held commercial real estate firm and its joint venture partner NORTH AMERICA SEKISUI HOUSE, LLC (NASH), are pleased to announce the purchase of the iconic Fannie Mae Headquarters located at 3900 Wisconsin Avenue in Washington, DC. The acquisition includes a 228,000 square foot building and approximately 10 acres of land.

Roadside Development is known for its adaptive reuse of commercial properties and cultivating lasting relationships with communities including its most recent venture City Market at O, a 1M square foot development located in the Shaw neighborhood of Washington, DC. NORTH AMERICA SEKISUI HOUSE, LLC (NASH) is the U.S. business unit and full subsidiary of SEKISUI HOUSE, Ltd, Japan’s largest homebuilder and leading diversified developer. Together, these companies share a common vision for creating a new development that blends mindful planning with design excellence for a dynamic mix of innovation, sustainability and superior quality to create long-term value for the community.

“We are honored to partner with NASH in the acquisition of this iconic property. We look forward to working with the community as we consider redevelopment of the property following Fannie Mae’s departure,” said Richard Lake, Founding Principal of Roadside Development.

Fannie Mae Headquarters will relocate to 1100 15th Street, NW in Washington, DC. The company will remain at 3900 Wisconsin Avenue until its new headquarters are complete. During this time, Roadside Development will work with local officials and community leaders to further define the collective vision for the redevelopment including both design and usage.

Originally built in 1958, the Fannie Mae Headquarters is part of the architectural composition and fabric of the neighborhood. The property is ideally situated along Wisconsin Avenue surrounded by high-density neighborhoods and acres of public parks. As a locally based real estate developer, Roadside Development is committed to improving the communities of which they also live and work and will bring this same level of commitment to the redevelopment of 3900 Wisconsin Avenue.”

46 Comment

  • Methinks the Japanese are wildly optimistic if they think they could make Fannie Mae into a successful “shopping center”. But hey, it’s not my money! Give us all your development dollars!

    • To add some context: Friendship Heights up the street is struggling with retail. Georgetown is just down the street to the south and already has quite the surfeit of well-established retailers. Many boutiques are choosing to locate their stores amid the popular millennial hang-outs (see all the recently arrived/incoming retail around 14/U/Shay). New high-end retail is targeting City Center. These guys certainly have their work cut out for them.

  • “located 10 minutes or so from the White House by car”

    Hahahahahahahahahahahahahaha

  • Wow…and there’s no way this is the final word. A shopping center is a terrible idea and certain to face stiff neighborhood resistance. Condos make sense. There’s a very big parking lot behind the building that faces onto Glover Archbald Park. The building is weird and outdated. The front lawn and driveway are entirely unused. It’s hard to imagine an investor letting all that land just lay fallow. Ward 3 vision/the ANC/Tenleytown main street, etc. should be jumping on this to find a way to feed ideas to the developer.

    • I doubt the neighborhood wants more condos. They’re very concerned with overcrowded schools WTOP, especially elementary schools. I think this area is zoned for Hearst.

      • Of course, Hearst in theory has plenty of space. It’s enrollment is 75% kids who don’t even live in Ward 3. As local enrollment increases, Hearst can just move out of boundary students out, at least as they finish 5th grade.

    • This area already has Cathedral Commons to the immediate south, which has turned out to be a mediocre disappointment. Immediately to the north of Fannie is 4000 Wisconsin, which has lots of empty retail and will have floors of empty office space once Fannie, its major tenant moves out. The last thing the area needs is more mixed-use retail. The Fannie property could be better used as high end condos or a boutique hotel. Given that the main building and lawn will be preserved, it iis also hard to see it as prime retail space when one has to travel 100 yards or more off Wisconsin to the back of the site.

    • I’ve always found it interesting that this property is included in the “Spring Valley chemical weapons area map” (which can be found by doing a google image search on that phrase). So who knows what they will find if they start digging around more for condos or more development. Though Spring Valley residents know they live atop the buried remnants of the chemical warfare testing area that was at American University and neighboring Camp Leach during WWI (though the Spring Valley residents I have met are in denial about the extent of the contamination), not all are aware that the area where chemical weapons have been recovered (think mustard gas and many other similarly health-damaging compounds, unexploded shells containing them barely buried beneath a thin layer of topsoil, and cancer-causing arsenic contaminated soil) is larger than Spring Valley – it stretches a bit south of the Spring Valley neighborhood to include Mann elementary school and a few immediate surrounding blocks, and north into part of AU Park, with this hook that includes the Fannie Mae property – but does not include McLean Gardens directly south of it, which was a large private estate at the time of the chemical weapons manufacturing and testing during WWI.

  • Blithe

    Glad that they’ll be maintaining the facade. I think this location will have to have some hellacious shops in order to be profitable. I totally agree with the points made by Anon 1:14. There’s no Metro stop, very little captive audience, and a lot of shopping in nearby neighborhoods. I’ll look forward to seeing what they bring to the neighborhood.

    • “There’s no Metro stop”… Tenleytown stop is a 10 minute walk

      • Blithe

        Exactly. So if you have the choice between say, Friendship Heights or Tenley and the stores that are there, or any of a number of other shopping destinations, what would make you opt for the shopping center with the 10 minute walk? For me, it would have to be something like Sullivan’s or Johnson’s — which are both worth the walk or extra bus ride.

      • Yes, but it is a tedious and boring just over a half-mile walk that feels much longer when you are walking it.

  • ah

    This article seems super-premature. A price of 10-20m yen? That’s so vague I can barely keep reading . . .

    If there’s any credibility to it, it would seem a more likely outcome is condos with some street level retail, not a “shopping center”.

  • How’s about a branch of Colonial Williamsburg?

  • Not be pedantic but its definitely much farther from the White House then 10 minutes by car.

  • I’ve always thought that it was a very large piece of property for a chocolate retailer, so not surprised to see them selling it.

  • More details:
    http://www.bizjournals.com/washington/news/2016/11/30/fannie-mae-hq-sold-to-roadside-development.html

    The building across the street was also sold today, bought by Sidwell Friends, and the big building next to UDC at Connecticut and Windom Pl. (with Starbucks) was also sold.

  • As a long time Cleveland Parker, I think Roadside and their Japanese capital partner are in for a heck of a rude awakening.

    I hope they took 15 years of lawsuits and delays into consideration in their proforma.

    The District and Ward 3 in particular are the most development averse, well funded, under employed NIMBY’s with copious amounts of free time on their hands of any jurisdiction I’ve ever seen.

    Retail? Even if the neighborhood “allows” it, Glover, Tenley and Cathedral Commons are three adjacent retail centers and retail in all three is practically on life support. Cathedral commons retail space is still 35% vacant after a couple of years, and the tenants there aren’t doing well.

    Cathedral Commons was held up by NIMBY’ism and countless juvenile lawsuits for 10 years, and it started with everyone in lockstep agreement that the existing Giant needed to be rebuilt and expanded.

    There is no such agreement with anything on the Fannie Mae site.

    And Residential? Hahahahahahah…this in a Ward that has been issued the fewest number of new unit building permits every year for the past 25. No offense to Roadside, but JBG is the preeminent, deep pocket developer in town, with a laundry list of impossible-to-do projects under their belt, and look at what just happened to them in Woodley Park, on a Metro adjacent parcel begging for more units.

    • I’m guessing that Roadside is well aware of what they’re facing, but assuming that NASH fronted most of the capital, this is just 15 years of job security for the Roadside peons. And now Roadside can likely leverage this unrealized project in future bids / efforts to raise capital.

    • I kind of wish that Cathedral Commons had been held up further. While I looked forward to it at the time, it’s turned out to be a disappointing, basically ugly design and appears to be cheaply constructed. The outside finishes are bland and low end, and there’s way too much concrete. What happened to the green roof and LEED certifications they promised? The whole project looks like it was built by a developer who wanted to make a modest bet in a transitional real estate area, not at a prime location in one of the highest-end markets of DC. Guess they neighborhood shouldn’t have been surprised in hindsight. As a major development partner, Giant evidently brings the same mediocre quality to its real estate development as it does to its food stores.

      • maxwell smart

        “The whole project looks like it was built by a developer who wanted to make a modest bet in a transitional real estate area” – ding ding ding! It’s really no worse than 99% of the mixed-use projects being built in DC.

        • The original poster is right. The quality and design look downright cheap and shi%%y compared, for example, to Bethesda Row, Park Van Ness and The Woodley. In fact, the one building resembles budget courtyard hotel at an airport.

    • Comment Artist

      Good points, but the Wardman Park proposal doesn’t really fit in with your premise. I’m all for greater density in the neighborhood and it has and will continue to grow with the recently completed project and the recently approved one, but the behemoth that was rejected simply did not fit well. It was a mess.

  • A shopping center? That sounds like such an odd idea, not only for the area but for the building itself. I just can’t see that transformation.

  • I assume there were going with this plan thinking that filling the whole parcel with whatever would be even more of a hard slog than what they decided. In their mind the current look of the building and green space is still there AND the entire parcel isn’t a big building with condos so the neighbors don’t have that to complain about. That the neighbors will still complain is obvious.

  • maxwell smart

    The building design and site is not well suited for commercial retail, especially in an area with relatively low foot traffic. The only “shopping center” concept I can see working in this location and with this building would be something like Eastern/Union Market. I could maybe see the neighborhood supporting that.

    • They must be thinking like suburbanites and thinking that people will drive to the location because of the large parking decks in the back. Not so likely at this location in DC, unless the shops appeals primarily to suburbanites – though it is hard to see what they could possibly put in here that wouldn’t be more easily accessed by suburbanites …. in the suburbs.

  • Isn’t a historic preservation landmark application in the works for the front wall, facade and lawn? I’m sure that the purchasers have taken that into account.

  • I’m wondering which “vacant” land they plan to build upon.

    • Exactly. The purchasers say they plan to preserve the front facade (and they may be required to anyway), yet build high end condos on the vacant land. The front lawn view shed is pretty integral to the facade’s value, no? Assuming that the lawn and front building stay, there seems to be some un-built garden area to the rear of the Fannie building, as well as the parking decks themselves, which could be taken down and built over.

    • ah

      As noted there’s the parking area in the back, which can be undergrounded, plus some currently open space. In addition, there’s a large addition to the original building on the back of it – that could probably be removed as well, or converted to open space with a larger condo building behind it that overlooks the Glover-Archbold Park, all while retaining the facade.

  • I live in the neighborhood and am sure the neighborhood opposition to anything will be fierce. I’m not against it, but I can’t see how a shopping center would be successful here. They would have to come up with some interesting stores that don’t already exist in the city. (Uniqlo!!) But realistically, after many years of wrangling with the neighbors I predict this will end up all residential.

    • A lot depends on whether the developers want access to and from 39th St, not just from Wisconsin Ave. They may want the access for the convenience of new residents and to attract more customers to retail (which likely cannot front Wisconsin Ave.). However, a 39th St entrance would increase traffic on that road and likely enrage and energize the McLean Gardens community.