Equity Snaps up $167M Luxury D.C. Property
- Apr 08, 2010
April 8, 2010
By Allison Landa, News Editor
In another example of commercial real estate companies taking advantage of distressed-asset availability, Equity Residential has purchased a luxury Washington, D.C. apartment property in an all-cash $167 million transaction.
Formerly known as The Dumont, the building is now called 425 Mass. It was developed as a luxury condominium project and completed in 2009 – but in January, developers Broadway 401 LLC, Broadway Mass Associates LLC and Broadway Mass TIC I LLC filed for bankruptcy. They had acquired the property at 401 and 425 Massachusetts Avenue between December 2004 and January 2006 for more than $47 million and subsequently built two 14-story residential towers with 559 residential condominiums, 2,954 square feet of retail space and 561 underground parking spaces. A foreclosure notice was filed in January 2009 and in spring of that year a potential buyer emerged to the tune of $100 million. However, those talks broke down and the deal never went through.
All units are currently unoccupied. The purchase price values each at approximately $296,000 per unit and $343 per square foot of rental apartment space. Equity says it plans to see a year-three stabilized yield in excess of 8 percent.
“We are very pleased to add a brand-new asset to our portfolio without construction risk and at a price well below replacement cost,” Equity president and CEO David Neithercut said in a statement. “This acquisition is a continuation of our strategy to acquire high-quality assets in core markets.”
Equity owns and operates 51 properties consisting of 15,976 apartment units in the Washington, D.C. metro area. It owns or has investments in 494 properties in 23 states as well as in Washington, consisting of a total of 136,886 units.