Douglas Development Sells Two DMV Properties for $35M

The perennially active, Washington, D.C.-based Douglas Development has sold an industrial property in Northern Virginia, and also made plans to unload an office property in Southern Maryland — the latter of which contains a small data center.

In a deal that closed last week, Douglas traded its roughly 94,000-square-foot warehouse at 950 South Pickett Street in Alexandria to WareSpace for $19.5 million. WareSpace provides co-warehousing properties to small businesses, akin to a coworking office rental a la WeWork. Douglas paid $22.9 million for the warehouse in late 2021, property records show. JLL’s John Dettleff and Bill Prutting facilitated the deal on behalf of WareSpace.

“This acquisition represents a major milestone in our mission to solve the critical shortage of small warehouse space in America’s most dynamic markets,” Levi Cohen, WareSpace’s CEO, said in a statement. “Alexandria offers unparalleled access to the D.C. metro area, and this infill location will provide the infrastructure that small businesses need to scale without the red tape of traditional industrial leases.”

Douglas also plans to sell a roughly 150,000-square-foot office at 5700 Rivertech Court, in Riverdale, Md., to the University of Maryland for $15.5 million. The building is within the University’s Discovery District, a 150-acre research park adjacent to UMD’s main campus in College Park. Douglas paid about $11.3 million for the office in 2021, per records.

The Maryland Board of Public Works stamped its approval of the deal in late May, and it is expected to close in January, according to the Business Journals, which first reported news of the deals. 

The three-story property is currently 60 percent occupied by the likes of defense contractor Raytheon and software company Fraunhofer USA, though the leases of nearly all the tenants will expire within the next two years. The University of Maryland has the right to occupy unleased space at the building ahead of the deal’s scheduled close early next year, according to the Board of Public Works.

The nearly 31,000-square-foot first floor of the building also notably hosts a small data center, which is part of a broadband system connected to Mid-Atlantic Crossroads, a high-speed network provider based elsewhere at UMD’s Discovery District. UMD plans to host both public and private entities at the property in connection to Maryland’s Capital of Quantum strategy, which aims to entice quantum computing investments into the state. 

Representatives for Douglas and UMD’s real estate arm did not immediately respond to requests for comment. 

Douglas Development has had a busy 12 months in the DMV. The firm in March sold the majority of an office park in Riverdale, just east of Discovery Park, to the American Armed Forces Mutual Aid Association (AAFMAD) for $6.3 million. In January, it sold three properties within the District to the AAFMAD for a combined $96 million. 

In May, meanwhile, Monumental Realty placed the winning bid — $7.3 million — at a foreclosure auction for four buildings in D.C.’s Chinatown previously owned by Douglas. The firm defaulted on roughly $27 million in debt tied to the properties last June, just a few months before defaulting on a $51.6 million CMBS loan tied to 14 properties across the DMV last August. 

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