Development of the first phase of Northeast Heights, a 258,500-square-foot mixed-use office and retail building in Washington, D.C., will begin now that $105 million in construction financing has been secured from J.P. Morgan for the Opportunity Zone redevelopment.
Cedar Realty Trust, which has been planning the project for at least a year, also announced a new joint venture with Asland Capital Partners and the Goldman Sachs Urban Investment Group.
The office space is leased to the Washington, D.C., Department of General Services and will be used as the agency’s headquarters. The six-story building at 3924 Minnesota Ave. NE in the Minnesota/Benning submarket in Ward 7 will also have 18,000 square feet of street-level retail. Demolition has begun and construction is expected to be completed by the end of 2022. An official groundbreaking will be held for the first phase later this month.
Cedar Realty Trust and Asland Capital Partners are co-developing the property while the Goldman Sachs Urban Investment Group is serving as a strategic capital partner. Trammell Crow Co. is the designated fee developer. A JLL Capital Markets team comprising Roland Merchant, Jr., Nicco Lupo and Thomas Pryor arranged the debt and equity financing.
Mayor Muriel Bowser announced the relocation of the DGS headquarters and its 700-member workforce in May 2020 as part of the city’s revitalization strategy to spark economic activity in the Ward 7 area and bring retail, entertainment and dining options to the neighborhood. The DGS office building and retail space will be built at the site of the Senator Square shopping center. A second phase is planned for the East River Park shopping center and will include up to 1,300 residential units and more retail space.
Robin Zeigler, Cedar Realty Trust chief operating officer, said in a prepared statement that the formation of the joint venture represents the first step in advancing Cedar’s vision for the redevelopment project. Zeigler called the construction of the DGS headquarters the cornerstone and catalyst to the Northeast Heights redevelopment project that is expected to begin the long-planned revitalization of the Minnesota/Benning Corridor.
Daniel Alger, managing director & co-head of the Goldman Sachs Urban Investment Group, said in prepared remarks the project will create jobs, promote economic opportunity and serve as a model for community development.
James Simmons III, CEO & founding partner of Asland Capital Partners, said the Northeast Heights redevelopment project is the kind of development Opportunity Zones were created for because it creates vital investment opportunities in mixed-income, underserved neighborhoods.