- The Washington Times - Thursday, July 19, 2007

Real estate developer Opus East announced this week it is acquiring property at 1015 Half St. in Southeast to build a 10-story office building.

Although office buildings are nothing new for Opus East, building one on speculation in Southeast is unusual.

It shows how far the area has come from low-income housing and mom-and-pop stores to a place where major developers are willing to construct office buildings on speculation. “On spec” means no tenants have signed up but developers think demand is strong.

Opus East paid $41.5 million for the site and hopes to complete construction on the 411,000-square-foot building by October 2009. The nightclub and auto repair shop that used to be there have been torn down.

“The city has figured out that the land is too valuable to keep it on as junkyards, car repair shops and warehouses,” said Steve Cohen, senior director of real estate for Opus East.

Opus East’s planned building joins Monument Realty’s Half Street and Forest City Washington’s the Yards as large commercial and office complexes finding a home near the new Washington Nationals baseball stadium. About a half-dozen condominium and apartment buildings are in various stages of development nearby.

Mr. Cohen described the projects as feeding on each other. One office project goes up, which creates a need for residences for employees nearby, which creates a need for entertainment and retail.

First, something needs to happen to break through the Catch-22 of no development without amenities and no amenities without tenants, Mr. Cohen said.

Opus East’s willingness to invest “on spec” can be traced to the U.S. Department of Transportation’s decision to move its headquarters to the Anacostia Waterfront from its current location near the Capitol.

Opus East responded by starting construction on 100 M St. SE, a 240,000-square-foot office building. Last month, Opus East signed a 10-year lease agreement with Parsons Corp., an engineering and construction company, to lease one-third of the building.

“We signed an 80,000-square-foot lease with Parsons while the building was still one year from delivery,” Mr. Cohen said.

Based on the popularity of the first office building, Opus East decided to go ahead with the 1015 Half St. SE building.

For Monument Realty, the catalyst was construction of the new baseball stadium.

“Go down and look at the cranes in the air,” said Senior Vice President Doug Olson. “The development … demonstrates the transition that neighborhood is going through.”

Property Lines runs on Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail tram stack@washingtontimes.com.