Ballston Tower
Casting the Right Player in the Right Role.
In 1998, Forest City Enterprises solicited offers from third-party developers to construct a 225,000 SF speculative office building at the Ballston Common Mall, which Forest City owned and operated. The proposed office building would be constructed in an air-rights parcel atop a newly built retail pavilion, which presented a number of challenges regarding the construction, ownership and operation of the property. The mall was governed by a spiderweb of covenants, easements, and ground leases existing between three private owners, two department store anchors, and Arlington County, which owned and operated a public garage that served the project.
Monument Realty and our investment partner, Apollo Real Estate Advisors, succeeded a number of local and national developers by structuring a transaction that allowed each party to focus on its strengths and assume any mandated risk. We also worked out a commitment from Prudential Insurance Company of America to fund 100% of the project costs upon substantial completion of the base building, as well as 100% of leasing costs thereafter—a structure that we would later replicate on numerous other projects.
With that commitment in hand, we were able to negotiate a non-recourse construction loan from Bank of America for 100% of construction costs, allowing Forest City to construct the office building and act as the construction borrower. This allowed Forest City to control a complicated construction project above a valuable retail asset. Meanwhile, Prudential, Apollo Real Estate Advisors, and Monument Realty assumed 100% of the market risk in a booming R-B Corridor office market while Bank of America provided construction financing with a rock-solid take-out commitment.
In March 2000, eight months prior to the completion of construction, Monument Realty signed a 12-year, triple-net lease with E*Trade Bank for the entire building, beating pro forma rents by over 10% on a net effective basis. The partnership received leveraged returns that were off the charts and Forest City welcomed the foot traffic from over 1,000 new office workers.
We Made It Happen.
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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.
We Made It Happen.
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1129 20th Street NW
1129 20the Street NW is a176,071 SF, 10-story Class A office property in the Central Business District. The property, also known as The Liberty Building, was purchased from an affiliate of Prologis, Inc.
Developed in 1969 and completely renovated in 2009 with the addition of two floors and a roof deck, the Liberty Building, formerly known as the Board of Trade Building, is LEED Gold certified and situated within blocks of four major Metro rail lines. The building has four sides of windows and 18,500 SF floorplates that are ideal for smaller tenants.
Monument Innovation Center
Monument Innovation Center, is a new ground-up, state-of-the-art life science building located off I-270 in Gaithersburg, MD. The 135,000-square-foot, 4-story life science development is developed by Monument Realty, a full-service real estate firm and market leader in the Washington, D.C. region. Monument Innovation Center will feature modern interior and exterior finishes and is purposefully designed to meet the standard and requirements for life science facilities, with high ceilings, enhanced electrical capacity and increased loading capacity on the tenant floors, and state-of-the-art mechanical and ventilation systems.
Monument Innovation Center is slated to deliver in mid-2023.