"Feldman Ruel Urban Property Advisors is announcing the sale of 4618 14th Street NW, a 25,153-SF development site located directly across the street from WMATA’s planned redevelopment of its Northern Bus Garage.

Josh Feldman and Ian Ruel, Managing Principals at Feldman Ruel, had the exclusive listing to market the property on behalf of the seller, Raymar Corporation which had controlled the property since 1964. Over the last five years Raymar Corporation had retained the Managing Principals of Feldman Ruel to sell its entire portfolio including 218 Vine Street NE in the Takoma neighborhood of Washington, D.C. where the purchaser, Jair Lynch Real Estate Partners, just recently broke ground on what is slated to be a 129-unit residential project offering both affordable and senior housing units. The sale of 4618 14th Street NW represents the final property in the Raymar portfolio.

While the property includes the majority of the block and is surrounded by public alleyways on the other three sides, it offers very little street frontage along 14th Street NW. 4618 14th Street NW was acquired by Heleos, a D.C.-based affordable housing developer, in partnership with a local performing arts nonprofit, for $4,190,000. The new owner is in talks with The Menkiti Group, which owns the adjacent retail properties to the south, to collaborate on its planned multifamily development.

The new owner plans to construct 99 multifamily units with 66 of those units set aside to house residents making up to 60% of the area’s median income and approximately 20 three-bedroom units designed for families. They also plan to include solar panels in an effort to make the project a net-zero energy building.

The property is currently tenanted by a local furniture store on the first level and a dance studio on the partial second level. The development project will be branded as Dance Loft at 14th and will also include up to 16,000 square feet of ground-floor retail space, some of which will be available to the current dance studio tenant.

Feldman Ruel’s research of the property prior to its marketing effort, including an opinion from highly regarded Washington D.C. land-use attorney Kyrus Freeman, a partner with Holland & Knight, concluded that there was a high probability a planned unit development (PUD) could be approved for the site thereby yielding much more density for the buyer and resulting in a significantly higher price for the seller. The selling entity, Raymar Corporation, preferred offers wherein the buyer would close on the transaction well before completing the PUD process, making the sale much more complex since a closing prior to obtaining the PUD passes the entitlement risk along to the buyer. Offers of this type are typically significantly higher than a traditional ‘As-Is’ offer structure but not as high as offers wherein the closing is subject to the buyer’s receipt of an unappealable PUD so any buyer must still price in the risk that comes with the PUD application.

"We received a wide range of offers, nine in total, some at higher prices but that required the seller to wait and close upon entitlements,"" Josh Feldman said. ""Since this was the last property the seller owned, their goal was to complete this sale and go their separate ways. They were not looking for an elongated ‘Subject-To’ contract process. They decided to take slightly less money and essentially put the PUD risk on the buyer."" Given the nature of the intended use for the project, the developer was confident that their project would be supported by the community.

The deal was further complicated by the configuration of the property, requiring the developer to partner with the adjacent landowner if they wanted the project to offer the type of frontage that typically helps to activate projects like these. Heleos’ renderings for the project include parcels owned by the Menkiti Group which extend from the property to the nearby alley. The developer is confident that they will reach a deal to bring the group on as a minority partner for the project.

“The project sits in the Sixteenth Street Heights neighborhood, just north of Petworth, and the surrounding area has seen only a relatively small amount of multifamily development over the last few decades. The neighborhood has a lot of single-family homes, but it doesn't offer much in the way of multifamily stock compared to many of the surrounding neighborhoods, certainly not larger projects and certainly not much with an affordable component"" Ian Ruel said. ""This is going to be great for the neighborhood."

About Feldman Ruel

Feldman Ruel Urban Property Advisors maintains the largest market share in the sale of private investment commercial real estate in the Washington, D.C. area and is consistently recognized as a market leader in the industry. The firm was established in February of 2020 after 15 years and hundreds of transactions with one of the nation's largest commercial brokerage companies. Feldman Ruel Urban Property Advisors works to further its principals' vision that clients are best served by agents who are thoughtfully deployed into manageable submarkets, incentivized to collaborate, and share the firm's philosophy of combining cutting edge technology with unparalleled integrity and old-fashioned hard work.