D.C. leads the nation for developers snapping up older office buildings and converting them to apartments or condos, and another one is in the works.
A group of developers, including D.C.-based Bernstein Management Corp., Bethesda-based Urban Atlantic and D.C.-based Placemakr have partnered to redevelop 1735 K St., NW, near the Farragut Square Metro station, and will reposition the 12-story building as luxury apartments. They will be operated under the Placemakr Premier brand, which operates apartments with hotel-like amenities.
It is the soon-to-be former headquarters of the Financial Industry Regulatory Authority, which is relocating across the street to 1700 K St. next year.
The building will offer both traditional apartment leases and transient short-term stay leases, and include both furnished and unfurnished units.
Placemakr is now one of the largest operators of those types of residential buildings. This is its first office-to-residential project.
Urban Atlantic will lead development, converting the building into 106 apartment units, with ground-floor retail.
K Street is a great downtown D.C. location for law firms, lobbyists and doctors’ offices, but it is not exactly a residential neighborhood.
“In this particular location, in the middle of downtown, close to the White House and K Street, close to amenities that bring visitors to the National Mall, it is a really great use. You have people that are looking for a nightly stay, people that are looking for corporate housing to be close to businesses, or the White House or World Bank and the institutions that exist around it,” said Brant Snyder, managing director at Urban Atlantic.
“And then you have people who may be looking for a longer-term lease. That flexible model in a location like this not otherwise known for multi-family is really attractive and is a great fit for this p[particular location and building,” he said.
It is the second partnership for Urban Atlantic and Bernstein. Urban Atlantic recently completed the conversion of the former 1970s era EPA headquarters in Southwest D.C. to 530 Class A apartments across two buildings called Lex and Leo at Waterfront Station. Bernstein owns the buildings.
Recently, RentCafe released a report that showed, in the last two years, developers in D.C. have repurposed seven older buildings like hotels, offices and medical centers to residential buildings with nearly 1,600 apartments.
Between 2020 and 2021, 1,147 new units have been created in D.C. by repurposing older office buildings, making D.C. the nation’s leader in office redevelopment, just ahead of Philadelphia and Chicago.
Why is D.C. so ripe for these kinds of conversions? A couple of things are in play.
“There is a significant amount of office space in downtown D.C. that is antiquated, and really doesn’t have a useful life for its tenants. And I think that you have a really strong development community in D.C. that is innovative and adept at working with complex projects,” Snyder said.
Several factors need to come into play for an out-of-date office building to be a good candidate for residential conversion.
“Is it the solution for significant office vacancy in Washington, D.C. for every building? No it’s not. But, for particular buildings that are laid out right way, located in the right location, and have the right physical dimensions, this is a good solution, Snyder said.