The company is funding the initial phases of the rehab using the apartment complex's strong cash flow; developed in the early 1960s and held in the Towers Cos.' portfolio ever since, the Blairs carry a minimal amount of debt. Later renovations will be funded via the credit markets when they return. "Currently we are 93%-occupied and the thinking behind the renovation is not so much to improve the occupancy, although it will help." Abramson says.
Rather the point is to keep the product relevant, she says. "There are probably 1,000 new units that have come online within one block of the property within the last five years." Because Tower Cos. tends to be a buy and hold investor it doesn't invest in green with a specific ROI in mind--its hold period is too long, she says. "What we do is ask ourselves, 'how can we keep that asset relevant in terms of technology and aesthetics.'"
Last month the company's East End office at 1050 K St. was certified Gold Core & Shell. The 11-story, 136,000-square-foot building is 66% occupied. Tower Cos. has also received preliminary Platinum certification for 2000 Tower Oak Blvd in Rockville, MD.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
