Skanska Signs 99-Year Lease to Develop Downtown DC Mixed-Use Development
New York-based construction and development firm Skanska has signed a 99-year ground lease to build a mixed-use development on approximately 34,000 square feet of land at 1700 M Street NW in Washington, D.C. owned by Chevy Chase Md.-based developer JBG Smith, according to a press release from JBG Smith.
The deal closed on Jan. 25, according to a Skanska spokeswoman who would not disclose the terms of the deal. The Washington Business Journal reported the property’s value as $95.9 million. No details about the development were immediately available.
The parcel’s previous owner Vornado Realty Trust demolished a former office building on the property before transferring the land to JBG Smith as part of the firms’ merger in July 2017. “The ground lease structure allows us to convert land immediately into an attractive income stream that is accretive to our long-term NAV [net asset value] and creates balance sheet capacity for future investment opportunities,” Matt Kelly, JBG Smith’s CEO, said in a prepared statement.
Located in the Golden Triangle neighborhood, which houses more than 3,000 organizations, 200 restaurants, 300 shops and retailers, seven hotels and six national parks, the site is “well-positioned for trophy-class office space and unique retail opportunities,” according to a separate press release from Skanska.
“1700 M will provide one of the few ground-up, new-construction offerings to businesses within the growing and thriving downtown market,” Mark Carroll, an executive vice president at Skanska, said in a prepared remarks.
Drew Flood, Bill Collins, and Paul Collins of Cushman & Wakefield represented JBG Smith in the transaction. The brokers declined to comment. JBG Smith did not have a broker in the deal.
Last February, JBG Smith released a possible design for the project from Studio Architecture, according to WBJ, which noted that Skanska is considering the D.C.-based design firm, among others.
The Skanska spokeswoman said that the firm “will assess the needs of tenants in the market and will provide an update on plans for the site in the future.”