Standard Takes Over $650M Northeast Heights Redevelopment in DC
By Keith Loria October 17, 2022 12:48 pm
reprints
Standard Real Estate Investments has acquired the Senator Square and East River Park shopping centers in Northeast Washington, D.C., and plans to continue a $650 million mixed-use redevelopment already in the works.
Cedar Realty Trust broke ground on its portion of the Northeast Heights master plan in March 2021, with plans to redevelop the two shopping centers into 1,500 residential units, including approximately 300 affordable units and 120,000 square feet of retail space.
But Cedar Realty was acquired this summer by WHLR Real Estate and unloaded most of its grocery-anchored assets before the sale was complete, including this deal which was in the works.
The price of the 13-acre site, in the Minnesota/Benning submarket of the District’s Ward 7 neighborhood, was approximately $47 million, according to someone with knowledge of the deal.
“Standard sources a differentiated investment pipeline from more mainstream investment managers and developers because of our willingness to understand under-invested and previously overlooked locations,” Jerome Nichols, the president of Standard, told Commercial Observer. “These neighborhoods often have a lower basis, more growth potential and have less capital chasing them. If executed properly, this combination provides insulation in the downside and offers outsized performance potential.”
Forbright Bank provided a first mortgage for the acquisition, and the Black Economic Development Fund provided $10 million in mezzanine financing.
“We are extremely appreciative of our lender partners; both held proceeds and terms through a tumultuous market environment during which many lenders pulled commitments altogether,” Nichols said. “This is a testament to their respective commitment to this community but also projects that address the durable need for attainable housing.”
Cedar and Trammell Crow Company already broke ground on a 257,000-square-foot built-to-suit office building to accommodate the new headquarters of the District of Columbia’s Department of General Services on the west side of the redevelopment. National Housing Trust will team with Standard on 110 affordable units on the site.
Standard will spend the next 12 months engaging community leaders, neighborhood residents, existing retail tenants, city officials and design professionals to perfect the vision, according to Nichols.
“Quality housing and access to services and amenities are necessities for all communities. We see an opportunity to deliver that at Northeast Heights,” Nichols said. “We envision redeveloping Northeast Heights into a location where residents can own and operate businesses, keep dollars in their own community, and import economic activity from across the District of Columbia.”
Keith Loria can be reached at Kloria@commercialobserver.com.
