The Marbury Plaza apartment complex on Good Hope Road in Southeast finally has a new owner, after the September 11 terrorist attacks and a battle over tenants’ rights delayed the sale of the property for more than two years.
Collins Group, of Brooklyn, N.Y., and Arbor Commercial of Uniondale, N.Y., paid $26.8 million for Marbury Plaza, a 672-unit project that features views of downtown Washington, the Anacostia River and Crystal City. Marbury Plaza LLC was the seller.
The 50-year-old property went on the market in the summer of 2001, but the contract buyer at the time backed out after September 11. Collins Group and Arbor Commercial put the property under contract in April 2002, but tenants argued they had the right to buy the property before an offer was made to any company.
After lengthy negotiations, all sides agreed that the Marbury Plaza Home-Ownership Tenant Association had until Feb. 5 to purchase the property, but the association was unable to come up with the required funds.
“The sale process was particularly lengthy in this case and exemplifies some of the challenges that can occur when trying to address tenants’ rights issues,” said Mike Muldowney, senior vice president of CB Richard Ellis, which helped broker the sale.
D.C. losing tenants
Washington may be losing out on some office tenants to cheaper space in the suburbs. In the first quarter of this year, the District’s vacancy rate for premium office space was 8.1 percent, up from 7.6 percent in December. And since March 2003, about 200,000 square feet of space has become vacant in the District.
Real estate analysts suggested that high rents in the District and cheap space in some Maryland submarkets and parts of Northern Virginia have led to a minimigration out of the city.
“[High rents] may be drawing some prospective tenants away from the District,” real estate firm Delta Associates said in its first-quarter office market report. “This bears watching.”
The average rent for Class A space downtown is between $40 and $41 per square foot per year, Delta said. Meanwhile, Northern Virginia and suburban Maryland rents range from as low as $18 for distant submarkets to $31 inside the Beltway.
In other news…
• The District’s framework plan for redeveloping the Anacostia Waterfront in Southeast won the 2004 Outstanding Planning Award from the American Planning Association this week. The annual award honors the most outstanding national effort in city and regional planning.
• First Potomac Realty Trust acquired Herndon Corporate Center, a 127,353 square-foot single-story flex property in Herndon, for $20.5 million. The property currently is 98 percent leased to 14 tenants, including the federal government. The company said that it expects to generate first-year net operating income of $1.9 million from the property.
• The Bozzuto Group and Fannie Mae Corp. sold River Pointe, a 170-unit garden apartment community on state Route 210 in Prince George’s County, to Boone Properties, a private New York investment group, for $12 million.
• Property Lines runs Fridays. Tim Lemke can be reached at tlemke@washingtontimes.com or 202/636-4836.
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