Canadian Pension Investor Plans to Take Over D.C.’s The Wharf at a $1.8B Value

A minority stakeholder of The Wharf, the 3.5 million-square-foot mixed-use development in Southwest Washington, D.C., could soon take control of the district in a deal that could ultimately value the property at $1.8 billion. 

Public Sector Pension Investment Board (PSP Investments), a Canadian pension investor, is currently working out a deal to acquire The Wharf from Hoffman & Associates and its partner Madison Marquette, which make up the joint venture that completed the massive project in 2022. The news comes according to Green Street’s Real Estate Alerts and Bisnow, the latter of which cited confidential sources with knowledge of the pending sale.

PSP is also seeking a roughly $1.2 billion refinancing package for debt tied to the district set to expire later this spring, per Bisnow. Representatives for PSP declined to comment. Hoffman and Madison Marquette did not immediately respond to requests for comment. 

Groundbreaking on the first phase of The Wharf began in mid-2014, and PSP has been a minority owner since then. The Hoffman and Madison Marquette partnership — which operates under the Hoffman – Madison Waterfront banner — controls most of the district, though some condos and offices have since traded hands. 

PSP was an early investor for the mixed-use district, providing Hoffman and Madison Marquette a $220 million equity investment in 2014. The first phase finished construction in 2017, and massive nine-figure financing deals followed in the years afterward, including a Wells Fargo (WFC)-led $800 million refi of the project’s first phase in June 2019. That phase included over 2 million square feet of office, hotel, apartment and condo developments, dozens of commercial spaces, along with The Anthem, a 6,000-square-foot music venue

That debt package was surpassed just a few months later by the Goldman Sachs-led $847 million construction loan tied to the project’s second phase. The developers said at the time that it was the single largest private construction loan in D.C.’s history. The Wharf’s second phase included yet more apartment, condo, office, commercial and hotel space, as well as multiple piers and parks. 

Eastdil Secured is reportedly brokering the buyout deal and PSP’s hunt for a refinancing loan, per Bisnow. Eastdil also brokered both 2019 debt packages. The brokerage firm declined to comment.

Aside from its popularity as a living and social district along the Potomac River, The Wharf has also attracted the gaze of law firms looking for swaths of new space with riverfront views. D.C.-based Williams & Connelly last spring inked a nearly 26,000-square-foot expansion lease to its offices at 670 Maine Street at the Wharf, bringing its total footprint there to an impressive 313,485 square feet. 

National law firm Kelley Drye & Warren also occupies space in that 11-story building, having signed a 65,000-square-foot lease there in late 2023.

Nick Trombola can be reached at ntrombola@commercialobserver.com.