Former Homeland Security Office Sells in $82M Deal

Lincoln Property and Cadillac Fairview plan to convert the asset into a residential building  

reprints


A joint venture between Lincoln Property Company and Cadillac Fairview Corp., has acquired the former Department of Homeland Security office in Downtown D.C., for $82 million.

Stream Realty represented the seller, S.C. Herman & Associates, in the transaction.

SEE ALSO: Baltimore Industrial Market Remains Tight Despite Economic Volatility

Matt Pacinelli, managing director of Stream Realty’s Washington, D.C, office, confirmed that the partners will convert the building into housing designed by Hickok Cole Architects. 

“It is a rare opportunity to deliver new housing in a prime downtown D.C. location,” he told Commercial Observer. “The investment reflects Lincoln Property Company and Cadillac Fairview’s belief in the long-term viability and value of downtown D.C. In addition, it is widely known that the District needs more housing.” 

Locate at 1125 15th Street NW, the 51-year-old, 12-story building most recently served as the home of the Department of Homeland Security and has sat vacant since the government agency moved out in 2018. S.C. Herman & Associates had reportedly planned to renovate it before the pandemic, but plans fell apart when the office market declined.

The joint venture’s plans for the 264-unit residential building are already underway, as the joint venture has filed for a special exception from the D.C. Board of Zoning Adjustment to go forward with the conversion.

Hickok Cole’s plans include 2,600 square feet for retail, plus a fitness center and a leasing office. There’s also a top-floor amenity space for residents, bike parking and underground parking consisting of 123 spaces.

The BZA is slated to review the plans on Feb. 2.

Pacinelli noted that a project like this is needed in the area and that challenges of the market caused by COVID-19 concerns are settling down.

“While it has been a difficult time for us all recently, we are starting to see the other side of the pandemic,” he said. “Demand for residential is perhaps at an all-time high and the office demand we began seeing in 2021 continues to grow.”

Requests for comment from S.C. Herman & Associates and the joint venture were not immediately returned.

Keith Loria can be reached at Kloria@commercialobserver.com.