Insight Spends $75M to Transform Silver Spring Post Office into Apartments
- Feb 13, 2012
February 13, 2012
By Nicholas Ziegler, News Editor
While the United States Post Office looks for way to streamline its operations, two of the company’s former properties have found new life as repurposed structures. The first was the Trump Organization’s announcement last week that it will spend $200 million on the renovation of Washington, D.C.’s Old Post Office Building, converting the structure into a luxury hotel. The second deal comes courtesy of Insight Property Group, along with partner Nova-Habitat Inc., which selected the USPS’s Silver Spring facility as the site of a 310-unit, $75 million apartment project.
The development, slated to be complete in the fourth quarter of this year, is Insight’s fourth Metro-focused acquisition, as the site sits directly in the Silver Spring Central Business District, in close proximity to train lines. “This property is a gateway location in the Silver Spring Central Business District, with great access and visibility,” Sarah Davidson, a partner at Insight, said. “Our residents will ride on Metro and walk to restaurants, entertainment and major downtown employers.”
Insight has also been on the trail of middle-income properties, as “the market is not producing new middle-income apartments in the D.C. area,” according to Richard Hausler, principal with Insight,” and there is strong demand from middle-income renters who need apartments.”
Research from Marcus & Millichap Real Estate Investment Services Inc. back up Hausler’s claim. While solid demand for apartments continues in the nation’s capital – vacancy rates in D.C., and in nearby Maryland and Virginia communities has dropped to less than 5 percent – construction isn’t expected to make a dent in those figures until starts begin later in 2012. According to a fourth-quarter 2011 report, rents were expected to grow at a steady pace through the end of 2011, and “a more robust pace of growth should materialize late next year as expanded employment opportunities result in greater tenant turnover within the market.”
Purchase financing for the Silver Spring development was provided by Eagle Bank of Bethesda, Md.