DC Condo Review

The Grant

When the real estate market is strong and demand for housing is high, some apartment/rental buildings owners apply for a condominium license for the purpose of creating a condo association so they can market and sell off their rental units.  Conversions often happen in areas that are popular and allow long term owners to cash in on a piece of property they may have owned and collected rents on for a long time.  Conversely, condo conversions are a great opportunity for buyers because they usually are more competitively priced than new construction.  The Grant is a 50-year old classic art-deco building undergoing restoration on Massachusetts Ave. between 13th & 14th Streets NW- half a block away from Thomas Circle.  Completion and delivery is scheduled to begin this Fall and sales of the units has already begun.

The units are being totally renovated with new carpet, hardwood floors,  granite counters, new appliances and a washer/dryer in every unit.  The overwhelming majority of the units are studios which, while small (350 sq. ft.), make for the ideal pied a terre or investment property.  For downtown property the price is hard to beat and should also appeal to first time home buyers and distance commuters.

Studios from: $189,000
1 BRs from:  Low $300,000's
2 BRs from:  Low $500,000's

The Grant has a lot going for it- the Thomas Circle area is a great downtown location (can you tell I live in the neighborhood?).  The new DC Convention Center is only a few blocks away.  It is also a short walk from Chinatown and numerous metro stations at Mcpherson Square, Metro Center, and Convention Center.  The city has just finished reconstructing Thomas Circle and the surrounding traffic arteries and while there has been no decision as of yet, the site of the old convention center (which is only 4 blocks away) is sure to become a destination.

-Phil

The New Plaza

The New Plaza is a 7 Story Victorian that sits at the corner of Massachusetts Ave. and 11th Street NW between Thomas Circle and the new DC Convention Center.  The building is a condo conversion with 37 Units that are being renovated and sold.  Like most condo conversions the big advantage to the New Plaza is that you can get a unit at a much more competitive price than you would find at a newly constructed building.  When you combine this with the recent slow down in the market and the approaching low season the value is difficult to beat for Northwest:

Studios from: $197,955
1 Beds from:  $236,570
2 Beds from:  $399,674

The units at new plaza feature high ceilings, open floor plans, original detailing, huge bay windows, and great views.  The price of the units at New Plaza cannot be fully appreciated unless you are familiar with the location of the building.  Mass Ave. and 11th St. NW is equi-distant between Thomas Circle and the new DC Convention Center.  It is also a short walk from Chinatown and numerous metro station at Gallery Place, Metro Center, and Convention Center.  This is an impressive downtown location even before the city makes a decision about what to do with the old convention center site (which is only 3 blocks away).  Two years ago I think most people would have been shocked by the idea of being able to own a studio in this part of the city for under $200K.  The New Plaza offers a great opportunity for first time home buyers or investors looking for a rental unit that can cash flow.

-Phil

22 West

Anyone who works or plays in Dupont or Georgetown would find 22 West an exciting place to live.  Located on 22nd Street NW, it is flanked by M street to the north and New Hampshire Ave. to the south east.  Besides being a short walk to both of those sought after areas 22 West is both elegant and unique: the facade will be built mostly of zinc and glass.  It will feature a roof-top pool, sundeck, and garden terrace.  It will also have a fitness center and common room overlooking the city skyline.  The street level of the building will have a convenience store, restaurants and retail space.  The building will also offer a 24-hour desk staff, an on-site property manager, a uniformed doorman and optional valet parking for residents and guests, restricted access and closed circuit TV monitoring for security, and even a carwash bay available for resident's use.  The units themselves will feature 9'6" ceilings, expansive floor-to-ceiling windows, recessed lighting, natural oak wood floors throughout, as well as balconies, french doors and terraces in many units.  And these are just the standards.  On top of that there are dozens of upgrades available in the bedrooms, bathrooms and closets.

New construction in this part of town is uncommon considering how fully developed the surrounding neighborhoods are.  So while membership has it's priviledges it also has it's price:

Type                                            Price

1BR                                             $750,000 - $800,000
1BR+Den & 2BR                    $875,000 - $1.1 million
2BR+Den & 3BR                    $1.1 million - $1.8 million
3BR & 3BR+Den                    $1.5 million - $3 million
Penthouses                             $1.5 million - $3.5 million

There are a total of 95 units in the building and they are all very spacious: depending on the layout they range from 948 sq. ft. (1BR) to 3,300 sq ft. (3BR+).  All two bedroom+Den and larger units get two garage parking spaces, and all other units get one parking space included in the purchase price.  Additionally, all units get a storage locker included in the purchase price.

-Phil

The Metropole

The stretch of 14th St. NW between U St. and Thomas Circle has been one of the greatest beneficiaries of the DC real estate boom in the last 10 years.  A dozen buildings have been restored and converted into restaurants, bars, galleries, and condominiums.  This 14th Street corridor is now home to places like Cafe Saint Ex, HR-57, and the new Studio Theater.  A block over from the Studio Theater at the corner of 15th and P Streets in the site of the Metropole.  Of all the projects in and around the 14th St. corridor this is one of the biggest.  It's entrance is located at 1515 15th St. while the south side faces the Whole Foods supermarket on P St- a great location by anyone's standards.  The first of two phases is already sold out.  The second phase will consist of 35 units and will begin selling sometime next year.

The Metropole is probably not going to appeal to first-time homebuyers- it has meticulous high-end features from top to bottom and the prices reflect that.  The ceilings range from 9' to 20', there are private terraces and balconies, bamboo floors and imported tiles, exposed ductwork, etc.  Here is range of prices for these units:

Type                     Sq. Ft.                Price                   Parking

1BR                       745-800           500s-700s     1 spot
1BR+Den            900-1100        800s-900s      1 spot
2BR                      1300-1900      1 million+        1 spot

-Phil   

The Dumont

The Dumont is located on Massachusetts Ave. between 4th and 5th streets NW in Mount Vernon Triangle.  The building's location actually puts is right between Mount Vernon Triangle to the north, Penn Quarter to the south, Chinatown to the west, and Union Station to the east.  That puts it within walking distance to just about everything- multiple metro lines, amtrak, shops, restaurants, the theater, hockey games, basketball games, the US Capital, and the mall.  Like many of the new construction projects going up in Mount Vernon Triangle, the Dumont is replete with amenities: an interior coutyard, a rooftop pool with private garden retreats, a fitness center, an E-Lounge, party/game room, and underground parking with controlled access.  The units themselves feature hardwood floors, granite countertops, stainless steel appliances, marble bathrooms, granite vanity tops, and 9' ceilings.  As of the end of August, 2006 the Dumont is around 35% sold.

Type                                   Sq. Ft.               Condo Fees        Price

Studio                                500-570           169                      High-200s
1BR/1BA                            700-825           239                     Mid-300s
1BR/2BA+Den                1000-1300       329                    in the 500s
2BR/2BA                          1350-1500         429                     in the 600s
2BR/2BA+Den+Loft    1400-1600         469                     in the 700s

There is garage parking available for purchase at $35,000/compact space and $40,000/full space.  Unlike some other projects, parking is available to all units including the studios.  Only 2BR units can purchase more than one space.  The project is scheduled to deliver in the Spring of 2008.

-Phil

Fennessey Lofts

Over the last six years, no fewer than seven buildings have been constructed on the three block stretch of 13th NW between Mass Avenue and Logan Circle.  Fennessey Lofts is the latest and one must assume the last addition to the street- given that there are no longer any lots available for redevelopment.  It is currently under construction on a tiny site next to the Rutherford, at 1219 13th st., which used to house a local convenience store.  While the site may seem inauspicious at first, it is actually a really unique development.   The slender building that is going up will be attached to an existing 3-story rectangular brick structure which faces the alley directly behind the Rutherford at 1221 13th St.  Developers in the area have been working around this structure since it is historically protected and its exterior cannot be altered.  Until recently, it housed an auto body shop but many years before that it was President Ulysses S. Grant's stable!  Now the resident owners of the Fennessey Lofts will park their cars on the ground level (where President Grant kept his horses) while the 2nd and 3rd floors will be converted into 2-level loft style units.

There are roughly 30 units in the building and most of them are duplexes.  The majority were sold at an opening event held this May but there are still a few left:

Type                   Unit      Sq. Ft.      Condo Fees          Price

1BR/1BA            212        676          $251                       $350,910
1BR/1BA            214        835          $311                       $413,910
1BR/1BA            210       1099         $407                       $559,900
2BR/2BA            202       1095         $406                       $634,900

All the remaining units are duplexes.  The units feature wrap-around granite counter tops and stainless steel appliances in the kitchen, hardwood floors in the living room, carpet in the bedrooms, and exposed brick and ductwork.  The building is expected to deliver at the end of next summer, 2007.

-Phil

What Does "Warrantable" Mean

This is one of the most important questions to ask a lender when you are considering purchasing a new construction condo.  In Washington DC, for a new condominium to be "Warrantable" it has to be run by a condo association which in the hands of a hyper-majority of resident owners.  Put differently, once a new construction condo goes to settlement on 75% or more of its units, the condo association is turned over to the resident owners.  This usually makes it a "warrantable construction".  Any new condo that has not sold and settled at least 75% of its units is considered "non-warrantable" construction. 

The whole purpose of warrantibility is to allow lenders to measure the investment value of a particular project.  Whenever a lender evaluates a buyer for a loan they take into consideration everthing they know about the buyer's financial situation and ability to earn so they can determine the buyer's credit worthiness and therefore whether it makes sense to give him/her a loan.  In addition, the lender also has to evaluate the property that the borrower is trying to purchase- because effectively they are purchasing the property along with the buyer.  One way of doing that is an appraisal which all lenders require to determine whether the property in question is actually worth what it is being sold for.  Another way to measure the risk they are taking by making the loan is to find out who has a dominant interest in the property.  Once the developer relinquishes title to 75% or more of the units he/she has less control over the condo association then the other resident owners.  Once this happens, lending for the purchase of an individual unit in that building becomes a less risky investment for a bank or lending institution.

The question of warrantability does not end here since different lenders define warrantability in different ways.  The age of the building is also no indicator of the status of the condo.  Usually, the lender will submit a questionnaire to the condo association that they need to fill out and return.  Among other things the questionnaire asks: What is the total number of units in the development versus the total number sold?; Do the unit owners have control of the condo association?; Are there any unit owners who are delinquent on their condo payments?  If so, how many are delinquent?; How many units are occupied by primary residents?; How many units are occupied by tenants/renters?; Are there any mulitple owners in the building? If so, how many units do they own?, etc.  Depending on the lender, answering yes to any one of these may make the project unwarrantable.

How does this effect buyers?  It will effect the rate on any loan you are being offered by a lender.  A property that is warrantable is less of a risk for a lender so they can offer the buyer a more favorable rate.  This issue of warrantability is sometimes overlooked by out-of-state lenders who are unfamiliar with the DC market and it's abundance of new construction condos.  A lot of lenders will quote the most favorable rate they can to draw-in a buyer only to reveal later on that there are issues that prevent them from following through on that rate.  One of the issues is the fact that the buyer is purchasing a condo that is non-warrantable.  I have had a situation where 1 week before settlement the lender (from out of state) came back saying they could not offer the rate they promised because they only just discovered that the building was non-warrantable.  LESSON: MAKE SURE YOU BRING IT UP WHEN TALKING WITH LENDERS.

-Phil

The Warehouses at Union Row

The Warehouses at Union Row is the second part of a dual development on V st. NW between 13th and 14th.  It is enclosed within the "U-Shaped" Flats which faces V Street and curls up 14th St. on the west side and 13th St to the east.  The Warehouses has a total of the 59 units of which 10 are already sold.  At first glance, the mock ups for the Warehouses look like the result of architects being given free rein- the layout really takes advantage of the space available.  The Flats is itself a high end construction that will appeal to buyers who are most interested in great features and layouts and are willing to pay extra for them.  In the case of the Warehouses, this is even more true.  In simple terms, if the Flats is Business Class version of DC new construction, then the Warehouses is First Class.  I suppose the developer chould have used the lot to make one enormous building but by dividing it into two, each unit has larger spaces with more windows and therefore more light and more appeal. 

The Warehouses is actually two adjoining structures.  The signature unit is actually a split level townhome mixed with warehouse-style studios arranged around a central courtyard.  There are elevated walkways to access the upper units.  Inside you have the open floor plans, high ceilings, exposed ductwork, and same high end finishs you find in the Flats.

The majority of the third floor units are 2BR/2.5BA with 2.5 levels and a terrace.  They are priced at $864,900 and $884,900 (with a terrace on two levels).  Here is a sample of their other available units:

Type                        Unit    Sq.Ft (Int/Ext) Condo Fees     Price

2BR/1BA                  113W    740              $324           $494,900
2BR/2BA                  202W    890              $324           $551,900
2BR/2BA                  204W    985              $324           $457,900
2BR/2BA                  103W    1130            $333           $644,900
2BR/2BA                  111W    1250            $333           $744,900
2BR/2BA                  101W    1320            $333           $794,900
2BR/2.5BA+Den    306W    1575/105     $402            $864,900
2BR/2.5BA+Den    318W    1575/280     $411            $884,900
2BR/2.5BA+Den    328W    1685/235     $411            $1,083,900
2BR/2.5BA+Den    301W    2050/145     $419            $1,284,900

There is also underground parking available for purchase.  A compact spot costs $38,000 and standard spaces go for $40,000.  Only the 2BR units can purchase parking.  The expected delivery time is the same as for the Flats- the fall of 2007.

-Phil

The Flats a Union Row

The Flats at Union Row is part of a dual development on V st. NW between 13th and 14th.  With 208 total units it is by far the larger of the two.  The Union Row development is one of a number of projects in recent years that have helped fuel the U street revival which has extended east to the intersection of Vermont Ave.  Part brick, part steel, The Flats is mostly glass punctuated with balconies and large terraces on the upper levels.  The units are open loft designs with great features like 9' ceilings, exposed ductwork, brushed aluminum and traslucent partitions, and granite and stainless steel in the kitchen.  The street level will feature retail space which will help add activity and vitality of the neighborhood.  The building dominates the entire block on V street and wraps in a "U" shape around it's sister project, the Warehouses at Union Row.

The Flats are 60% sold but they have a lot of different layouts still available at a variety of prices.  Here is a sample of their available units: 

Type                   Unit     Sq.Ft (Int/Ext)  Condo Fees        Price

Studio                 329      580               $232.57          $288,900
Studio                 529      580               $232.57          $297,900
Studio                 319      815               $290.61          $457,900
1BR/1BA              433      850               $290.61         $409,900
1BR/2BA+Den      330      920               $375.20         $471,900
1BR/2BA+Den      411      1210             $375.20         $670,900
2BR/2BA              428      1205              $396.16         $655,900
2BR/2BA              532      1080              $396.16         $574,900
1BR/2BA+Den      507       1075/40        $385.69         $590,900
2BR/2BA+Study    517      1255/530       $488.40         $779,900
1BR/2BA+Den       617      1025/885       $401.51         $625,900
1BR/2BA+Den       622      1135/45         $385.68         $650,900

There is also underground parking available for purchase.  A compact spot costs $38,000 and standard spaces go for $42,000.  At the moment only the 2BR units can purchase parking.  The expected delivery time for this development is the fall of 2007.

-Phil

The Alta at Thomas Circle

The Alta is a 13 story building located on 14th Street just off of Thomas Circle.  There are 126 units delivering this December.  All of them have sold except for 8 units.  This is truly a downtown location only three blocks from the McPherson Square metro station.  Not surprisingly it is meticulously designed with European inspired porcelain tiles, stainless steel appliances, and 9' ceiling with exposed spiral ductwork.  The building also has a landscaped rooftop terrace and a second floor lounge.  The remaining units are pricey- most are well above $550/sq. ft.- but with so few amenities, the condo fees are quite low.

Type           Unit #    Sq. ft.     Condo Fee     Price

1BR/1BA     1002      790         $241.94         $441,900
1BR/1BA     1102      790         $241.94         $451,900
1BR/1BA     1206      765         $234.28         $454,900
Studio         909       670         $205.19         $333,900
Studio         1109     670          $205.19         $348,900
1BR/1BA      1010     790         $241.94         $441,900
1BR/1BA      1210     790         $241.94         $456,900
1BR/1BA      PH1      995         $309.32         $577,900

There is also underground parking available for purchase.  The tandem spot is $32,000 and the stand alone is $40,000.  On the remaining units the developer is offering one big incentive in return for using their preferred lender- mortage payments totaling up to $18,000 for the first 6 months after settlement.  That is not too shabby!  The buyer has to occupy the property to be eligible for this incentive.   

-Phil

Do You Think I Should Buy?

Sometimes I get this question while I'm in the middle of showing a client some properties and the timing is unfortunate to say the least.  It's a lot like asking the conductor on the train to Boston whether he thinks it's a good idea to go to Boston.  Sometimes it comes from the all-knowing real estate Guru that you meet at a dinner party who has never actually owned a property himself.  He asks you if he should buy a place hoping that you will say "yes" so that he can tell you why you're wrong.  Like a lot of questions that involve personal finance and the economy, choosing to buy a property requires considering a number of variables.  To simplify I always respond with two questions: (1) Are you currently renting?; and (2) Do you pay income tax?  For most of the people who can answer yes to both these questions the decision to buy is a no-brainer. 

The reasons for the first question are obvious to most people.  When you rent an apartment you are paying the owner for the privilege of occupying his/her space.  You derive no other benefit from the lease.  At the end of the year you have paid thousands of dollars that are gone forever.  When you buy a property you may pay a bit more than you do in rent (especially with interest rates rising) but in addition to getting the shelter you also get back a few thousand dollars in equity by paying down your loan.  If you are determined to hold the property for 3 years+ there is a good possibility you will realize even greater gains.  The property will likely appreciate during that time and the portion of your payments that is directed to the principal of your loan will increase.

The second question is not meant to be facetious because there are a great many people working in DC on G-4 or diplomatic visas who earn tax-free income.  If you are paying income taxes, home ownership can have huge implications on your tax burden.  Every dollar that you pay in interest on your mortage is tax deductible as is every dollar that you pay in property taxes.   But the benefit does not end there.  Most people who are salaried employees do not have many tax deductible business expenses and therefore take the standard deduction when they file their taxes.  Once they buy a home it makes sense to itemize their deductions rather than taking the standard deduction (which is under $5,000 for a single person without dependants).  This allows them to begin deducting other things such as state income taxes, charitable donations, car registration fee, etc.  The result is that when you buy a property, your overall tax burden is significantly reduced.  Between (1) amortization (paying back your loan); (2) appreciation of the property; and (3) the income tax reduction, it is difficult to quantify exactly how much you can make by purchasing a property.  However, there is no doubt that it is FAR more lucrative than renting.

I have actually never heard anyone say, "we shouldn't have bought our place, we should have continued to rent instead."  Like a lot of things in life, the benefits of home ownership usually are not completely clear until you have experienced it.  I have heard a few people say "I paid too much", and that should be the cautionary tale of buying.  Fortunately, there is a simple solution.  Don't Overpay.  Do your research, talk to a lot lenders, use a real estate agent, and negotiate hard.  Remember that it is a buyer's market and remember the following:  A property is only worth what a willing and able buyer will pay for it.  You can have all the numbers in the world to support its value but the market has the final say.

-Phil

Logan Station

Logan Station is a condo development located just north of Logan Circle.  It spans most of the south side of R Street between 13th Street and Vermont Ave.  The building is designed to appear like a series of attached rowhouses which helps maintain its harmony with the surrounding neighborhood.  The building is scheduled to deliver in the first quarter of 2007.  There are 63 total units all of which come standard with 10' ceilings, stainless steel appliances, granite countertops, hardwood floors, and a 42" flat-panel TV.  The third floor penthouse units are all duplexes and allow for more choice finishes.  These units also have terraces or balconies and come with one compact parking space.  All the other units have the option of purchasing an underground parking space for $40,000/$45,000, (compact/standard).  So far they are about 40% sold.

Type             Unit      Sq. Ft.     Condo Fee     Price

Studio           B08      528          $149.60        $274,000
1BR/1BA       103      769          $217.88         $399,900
2BR/2BA       101      1063        $301.19         $599,900
2BR/2BA       202      1173        $332.37         $589,900

Penthouse Level Duplexes (include one parking spot)

2BR/2BA       301      1322        $374.58         $699,900
2BR/2BA       304      1383        $391.86         $749,900
2BR/2.5BA    317      1635        $463.27         $819,900

Logan Station is in a great area, (is it obvious I live near by?).  It is a block over from the restaurants and bars on 14th and a few blocks south of those on U Street.  It is an ideal location for someone who is looking to live near downtown without giving up the residential feel.

-Phil

Yale Steam Laundry

Yale Steam Laundry is a unique development on the edge of Mount Vernon Triangle that is currently under construction and scheduled to begin delivery in the Fall of 2007.  The development consists of two very different adjoining buildings at the corner of New York Ave. and 4th Street.  The first is a symetrical brick building, dating to 1902, which was once home to the Yale Steam Laundry Co. that serviced many of the hotels and restaurants in the District.  The building was made a historical landmark in 1998.  The other is a 12 story, brick, steel and glass structure that is being added to the plot next door.  The two buildings are connected by a low lying brick structure which was part of the original building.  This building will now serve as a lobby area which provides access to both structures and houses many of the amenities that will be available to all residents.

Among those amenities are a fitness center, business center, billards room, and a rooftop pool.  The original brick building will house New York style lofts with 20" ceilings and large open layouts.  Sales for this building have not begun yet.  The twelve story structure has a variety of different standard and loft-style layouts with hardwood floors, walk-in closets, washer and dryer, stainless steel appliances, granite countertops and 12"x12" tile flooring in the kitchen and bathroom.  This part is already 80% sold.  The prices for remaining units are:

Type           Model     Sq. Ft.     Condo fee      Price Range

1BR/1BA     D            721          319               $341,900 - $371,900
1BR/1BA     E            782          344               $346,900 - $391,900
1BR/1BA     E1          785          345                $386,900 - $399,900
1BR/1BA     A-A        812           357                $399,900 - $429,900
2BR/2BA     B1          1131         498               $559,000 (only 1 left)

Loft Style Layouts

Type                Model     Sq. Ft.   Condo fee     Price Range

1BR/1BA          H            683        278              $295,900 - $300,900
1BR/1BA          I             738        325              $354,900 - $359,900
1BR/1BA          N            928        409              $419,900
1BR/1BA+Den   J            972        428              $429,900 - $434,900

Yale Steam laundry offers the kind of amenities and features you need to have to compete with the other new construction projects that are on the market right now.  But it's biggest selling point is it's pricing.  On a price per square foot basis it is the most competitive of all pre-construction developments.  Many of the units are priced below $500/sq. ft. and there are even a few that are below $450/sq. ft. which is practically unheard of.  Only Madrigal Lofts offers a better deal right now since they include a parking space with the sale of their units which changes the value dramatically.  There is parking available for all the units at Yale Steam Laundry but it has to be purchased seperately for $37,000.  Ironically, the biggest drawback of Yale Steam Laundry might be the location.  It is right on the edge of Mount Vernon Triangle and residents will be only a few blocks from all that the new neighborhood has to offer.  Many of the units that are facing south are likely to have good views of the Capital Dome.  However, it is also located a stone's throw from the corner of New York Ave.  & New Jersey Ave. which is one of the most highly congested intersections in the District.  Real estate is all about choices and this may be a tough one for some people to make.  If sales are any indicator, that choice has not driven too many people away yet.

-Phil

Ten Ten Mass.

1010 Massachusetts Ave. is a 14 Story condominium under construction at the corner of Massachusetts Ave. and 11th street that will deliver 163 units and around 9,000 sq. ft. of retail space in the summer of 2007.  Athough it is a year away from delivery, the building is already 65% sold, with the biggest seller being the 1BR+Den layout.  The remaining units range in size from 1BR to 2BR.  All of them have top finishes and amenities. 

Features and amenities include: A rooftop pool;  Secured underground parking; 24-hour front desk; Floor-to-ceiling windows; Hardwood floors; Granite countertops; Private balcony/terrace (in select units); GE Profile stainless steel appliances; Soaking tubs (in select units); Open kitchens.  As one might imagine from the location of the building and the amenities it offers, Ten Ten Mass is pricey.  The units range from around $520/sq. ft. to $630/sq ft. and this does not include parking which begins at $37,500 for a compact space.

Type                     Sq. ft.                     Price Range

1BR/1BA               750-899                   High 300's - Low 500's
1BR/1BA+Den       885-956                   Mid 400's - High 500's
1BR/2BA+Den       1025-1114               Low 500's - Low 600's
2BR/1.5BA            1061                        Mid 400's - Low 600's
2BR/2BA               1275-1505                High 600's - Mid 900's

For the most part Ten Ten Mass should appeal to buyers that have a bit more to spend and don't want to compromise on great features and amenities.  However, the most exciting thing about this condo is the location.  The building will be a short walk to Mcpheron Square, Dupont Circle, Chinatown, the MCI Center, Penn Quater and just about every major metro line.  It is right next door to a prominent Washington think tank (the Cato Institute).  It is equidistant from Thomas Circle and the new DC Convention Center.  The lot directly facing the site, which houses the current sales office and a PMI parking lot, will be home to a new 1500 room Marriott hotel.  This hotel is being financed by BET founder and prominent local businessman Robert L Johnson.  Johnson acquired the lot in a highly publicized deal in which he traded a different lot to the City in return for the land and necessary permits to construct what will be the hotel of choice for convention center visitors.

Two blocks to the south of Ten Ten Mass is the old convention center site.  At this point there are all kinds of ideas being considered but among them is the plan to turn the site into the "Rockefeller Center" of Washington DC.  In addition to more condos, retail space, and office space the 10 acre site may contain 1 acre of park space, a national music museum, a new city library, and a promenade or "streetscape" extending up from 10th and through the current site.  The city has even approached Cirque du Soleil about holding a production there and perhaps making it a permanent venue.  There is no way to be sure how the site will ultimately be developed but whatever happens it will be exciting.  If location is everything in real estate, it is difficult to argue investing in Ten Ten Mass.

-Phil

What is Mount Vernon Triangle?

Mount Vernon Triangle is a Washington DC Subdivision located just north east of Chinatown.  It is literally a triangle created by the intersection of three major roadways: Massachusetts Ave; New York Ave; and New Jersey Ave.  Until a few years ago, the area was made up mostly of parking lots, warehouses, and a number of abandoned shops and houses.  Since most of the area north of New York Ave. was already fully developed, and the area south of Massachusetts Ave. was occupied by government buildings and offices, Mount Vernon Triangle became the logical next step in the City's drive to bring residents back downtown. 

In my mind this area is the most exciting project that the city has been working on with the exception of the Anacostia River Front Initiative.  "A recent study by Economic Research Associates estimates the total new private investments in the Triangle, to complete the build out called for in the [City's] Action Agenda, to be approximately $1.8 billion."  When all is said and done, Washington DC will have another residential neighborhood downtown that will impact more than those who buy and rent property there.  It will become a destination for all those who now complain that there are not enough bars, clubs, or restaurants in this city to keep the residents occupied (you know who you are). 

In order to frame the new neighborhood there will be gateways at each end of 5th Street where it connects with New York Ave. to the north and Massachusetts Ave. to the South.  Fifth Street will be a retail corridor while K Street will be turned into a promenade that would be closed to traffic by night.  The centerpiece of this plan is to turn the intersection of 5th and K Streets NW into a place where people can congregate outdoors.  A lot of analogies are being thrown around to describe the finished product- an italian piazza, a town center, etc.  To be sure, the whole concept is nothing original.  There are now town centers all over the area (Rockville, Reston, Shirlington, etc.) but I have a feeling that the District Version is going to set the standard.  The City's Action Agenda is worth reading.

-Phil

Five Fifty Five Mass.

A common theme you will hear from real estate agents when you are looking for your dream property is "Pick two out of three."  What it means is when you are considering a property for its (1) location; (2) price; and (3) features, you're not likely to find one that satisfies your criteria in all three categories.  Be prepared to compromise on one of them.  This is almost always the case.  The thing I really like about 555 Mass Ave. is that it comes close to debunking that old adage.  This building is located in Mount Vernon Triangle, just above the bustling Chinatown area.  It is the first of many developments planned for an area that has so much building underway, no one is likely to recognize it in five years time.

555 Mass Ave. is the only one of these developments that is finished and available for immediate delivery and gives you the opportunity to own in an area that is up and coming.  At around $470/sq. ft., it is the most competitively priced building for new construction that I have seen in downtown DC and it has all the features and amenities that you would expect from a modern urban development.  The units have hard wood floors, granite countertops and stainless steel appliances.  The building has a fitness center, and a party room available to all residents and a rooftop pool with panoramic views of the city.

Around 70% of the building has already sold but they still have most layouts available.  The last time I checked, these were their prices on remaining units:

Model                        Type            Sq. Ft.           Price Range

1BR/1BA                    B1B             712                $335,900 - $393,900
1BR/1BA                    B2B             722                $361,400 - $393,400
1BR/1BA                    B3               782                $374,900 - $425,900
1BR/1BA                    B1A/B2A      679                $390,900 - $393,400
1BR/1BA+Den            C1               782                $429,900 - $489,400
1BR/1BA+Den            C1A             848                $399,900 - $434,900
2BR/2BA                    D2B             1131              $579,900 - $630,400
2BR/2BA                    D4               968                $499,000 - $553,900
2BR/2BA                    D1B             1049              $539,900 - $579,900
2BR/2BA+Balcony      D1A             1010               $599,900

-Phil

Madrigal Lofts

If 555 Mass offers the best value for your money for existing new construction in Mount Vernon Triangle then Madrigal Lofts is the best deal I have seen for pre-construction projects in the area.  This twelve story building will be located at 4th and Eye Streets NW, only four blocks from the Gallery Place metro station.  It will consist of 259 units and will begin delivery during the 2nd half of 2007.  On a price per square foot basis, the Madrigal seems competitive but not extraordinary: most of the units are priced between $510-$550/sq ft.  The average for new construction in downtown DC is around $550/sq ft.  But there is a kicker.  Anyone who purchases a 1BR unit or a 1BR+Den will get a $5,000 credit toward closing costs and a FREE parking space.

For those who are unfamiliar with the price of downtown residential real estate it is worth noting that a parking space will run you anywhere from $35,000 to $50,000 extra depending on the neighborhood.  One of the worst mistakes I made when I bought a condo off Logan Circle was that I didn't buy garage parking with it.  In Dupont, Logan, and Adams Morgan a private parking spot is now worth around $50,000.  It is shocking to those new to the area but that is the reality of city life.  Furthermore, as an area reaches the population density of those aforementioned neighborhoods, parking becomes even scarcer.  With that scarcity the price will rise in tandem with the unit.  Madrigals units are already priced below the average but when you subtract $35K from the price tag they become super competitive.

The Madrigal Lofts is already 70% sold.  Of the remaining 78 units, 70 of them are 1BR/1BA.  The building will have a 24 hour staffed front desk, a fitness center, and a landscaped rooftop deck with gas grills and agreat views of the city.

Model               Condo Fees  Exposure           Sq. Ft.      Price Range

1BR/1BA           $350              East                 720            $366,900 - $399,900
1BR/1BA           $350              North & West    760            $391,900 - $418,900
1BR/1BA+Den    $360              South               760           $400,900 - $433,900
2BR/2BA           $450              East & South      936           $452,900 - $469,900
2BR/2BA+Den    $650              North & West    1445         $758,900 - $846,900

-Phil

City Vista

This development anchors the city's plans for Mount Vernon Triangle.  The development consists of three seperate buildings: two condos and one rental built around a common green area that will yield a total of 685 residences, (441 Condos & 244 apartments).  The lot is bordered by 5th St. to the west, L St. to the north and K St. to the south.  The first condo building is scheduled to deliver in the summer of 2007.  If Mount Vernon Triangle fulfills even half of what the city has intended for it, City Vista will be at the heart of a thriving new residential neighborhood downtown.  The plans are impressive.  The ground floor of the buildings facing 5th St. will be home to retail space including a full size "Urban Lifestyle Safeway" which is the Safeway supermarket chain's answer to Whole Foods.  The store will also house a Starbucks, Suntrust Bank, and dry cleaner.

City Vista residents will have direct access to the supermarket without having to exit the building.  The K Street side will also have a variety of retail stores and will likely involve restaurants and bars as this is the intersection that the city will be turning into a promenade by night.  The goal is to turn this stretch of K Street into an area similar to M Street in Georgetown.  The corner at 5th & K Streets NW is intended to be Mount Vernon Triangle's version of Wisconsin & M streets with the added twist that it should take on the feel of an Italian piazza or town square by night when street traffic is prohibited, (Yes, it's ambitious but I like it).

The era of buying a new DC condo and reselling it for an enormous gain 18 months later is over.  But if you are in it for the medium to long term (I would say 5 years+) then City Vista is a great investment.  With the location and amenities these units are great for someone looking for a primary residence or an investment/rental property.

Building K (delivery summer 2008)

Model                   Exposure              Sq. Ft.         Price Range

1BR/1BA               Vista Green          700-800       $366,900 - $396,900
1BR/1BA               K Street               754              $359,900 - $395,900
1BR/1BA+Den        Vista Green          914-915      $464,900 - $468,900
1BR/1BA+Den        K Street               899-936      $439,900 - $499,900
1BR/1BA+Den        5th Street            800             $406,900 - $438,900
1BR/1.5BA+Den     5th Street            915-961       $452,900 - $590,900
1BR/2BA+Den        Vista Green          1100            484,900 - $679,900
2BR/1BA               Vista Green          920              $467,900 - $522,900
2BR/2BA               Vista Green          900-1200      $519,900 - $564,900
2BR/2BA               K Street               900-1300      $522,900 - $700,900
2BR/2.5BA+Den    5th and K Street    1500            $692,900 - $792,900

Building L (delivery summer 2007)

Model                                            Sq. Ft.           Price Range

1BR/1BA+Den                                821-901         $375,900 - $439,900
2BR/2BA                                        1100              $504,900 - $562,900
2BR/2BA+Den                               1100-1400      $506,900 - $658,900

-Phil