07/21/2010

Walton Street Shops Stake in DC Apartments

A Walton Street Capital partnership is looking to recapitalize a new luxury apartment building in Washington that has an estimated value of at least $200 million.

The property, at 145 N Street NE, encompasses 440 units that were just completed, a 50,000-square-foot Harris Teeter supermarket and a planned 175-unit extension. It is part of the massive Constitution Square mixed-use project being developed by fund shop Walton Street and its partner, StonebridgeCarras of Bethesda, Md.

The 13-story apartment building, called Flats 130 at Constitution Square, is in its initial leasing phase. The Walton Street team is pitching the offering as a recapitalization, with the size of the stake to be sold open to negotiation. But the partnership evidently is also willing to consider an outright sale. Holliday Fenoglio Fowler is advising the owner.

The units have luxury amenities, including granite countertops, balconies and nine-foot ceilings. There is a rooftop pool, a two-story fitness center and a one-acre courtyard with a dog park.

The building has an E-shaped design. The top and middle of the E are already constructed, and the 175-unit extension would fill in the bottom prong. A buyer could build the extension within two years, boosting the net operating income by up to $4 million without greatly increasing management costs.

Constitution Square is in the growing NoMa (north of Massachusetts Avenue) neighborhood. The project is slated to encompass 1.6 million sf of office, residential, retail and hotel space.

Chicago-based Walton Street and StonebridgeCarras sold the complex's first office building, Two Constitution Square, last month. Northwestern Mutual paid $305 million, or about $518/sf, for the 589,000-sf property, which is leased to the U.S. Department of Justice.

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