901 New York Avenue

A Partner First, A Developer Second.

In October 1997, Monument Realty and our investment partner, Apollo Real Estate Advisors, contracted to purchase 901 New York Avenue, a 1.2-acre property adjacent to Mount Vernon Square. At the time, it was considered a fringe office location. However, previous development experience with another East End property convinced us that 901 New York Avenue had great potential.

To help mitigate risk, Monument Realty used our relationship with the seller to negotiate a long-term contract that effectively optioned the property while we explored various development plans. Ultimately, we considered two options: One, a 920-room convention center headquarters hotel that would open concurrently with the proposed 2.5 million-square-foot Washington Convention Center; Two, a 530,000-square-foot office building with first-floor retail. We advanced both development plans and in May 1999, after 19 months under contract, Monument Realty purchased the property for $14.5 million ($30/FAR).

In approximately 18 months, the market had shifted significantly in our direction. The site was no longer considered a fringe location and the development plan was clear—the office building option. Over the next 12 months, Monument Realty negotiated the purchase of a small spike that gave the venture control of an entire city block, added value through a series of modifications to the existing PUD approval, completed the building design, began marketing the property for lease, and solicited construction financing proposals from lenders.

In spring of 2000, however, Monument Realty was presented with an interesting dilemma when we received an offer from Boston Properties to purchase the property for $42.6 million ($80/FAR). In our first two years of operations we had built a development portfolio of 2.5 million square feet, of which 901 New York Avenue was the crown jewel and the company’s first development in our hometown of Washington, DC. Selling the property was the furthest thing from our minds—that is, as a developer. Yet, as a partner in a real estate investment, the decision was obvious. In December 2000, Monument Realty sold 901 New York Avenue to Boston Properties.