ACRES Lends $13M For Office-to-Resi Conversion of Historic DC Property
Pembroke has sold the historic Denrike Building, an office building in Washington, D.C., to Altus Realty, which plans to convert the property into a mixed-use asset.
The 11-story building, at 1010 Vermont Avenue NW, will be redeveloped into an 89-unit multifamily building with 4,081 square feet of ground-floor retail, according to ACRES Capital, which closed a $12.85 million loan to fund the acquisition and predevelopment.
“This loan provided ACRES the opportunity to gain exposure to the Downtown D.C. market, at an attractive basis, which has seen a significant uptick in office to residential conversions,” Mark Fogel, ACRES’ CEO and president, told Commercial Observer.
Built in 1927, the Denrike Building was acquired by Pembroke as part of a two-building portfolio along with 1000 Vermont Avenue NW in 2008 for $62.5 million.
Located in Downtown D.C., just north of McPherson Square, the property is within walking distance to major attractions such as the White House, U.S. Treasury Building and Capital One Arena.
With growing housing market needs combined with an increase of office vacancies, this project is anticipated to present an opportunity to support the current market demands, according to Fogel.
“Repurposing and repositioning properties for updated market needs is proving to be a core focus to move forward post-pandemic,” Fogel said. “Additionally, the location is perfectly situated in downtown for its residents to easily commute to work and have abundant amenities within walking distance to their residence.”
Drew Miller of ACRES’ New York office originated the loan, while Lindsay Stroud of Savills represented the borrower.
Keith Loria can be reached at Kloria@commercialobserver.com.