ALEXANDRIA, VA-Buchanan Partners of Gaithersburg, MD and Bethesda, MD-based Pinkard Group are developing a 51,500-square-foot, full-service Harris Teeter grocery store and 175 rental apartment homes in the Old Town North section of this submarket. Another participant in the project, which has penciled in at $74 million, is equity partner Buvermo Properties. The development is scheduled to break ground in the second quarter of 2012 with the Harris Teeter store tentatively scheduled to open in 2015.

Buchanan recently inked a lease with Harris Teeter for the store on the building’s street level. Cary Judd of Baltimore, MD-based KLNB Retail represented Harris Teeter in the lease transaction. The deal is one of the first publicly-announced transactions by the Pinkard Group, formed in 2009 when Robert Pinkard left his position as chairman of the then-Cassidy & Pinkard Colliers, a company he co-founded in 1981, to strike out on his own to focus on investment opportunities.

The 65,000-square-foot development site, which is currently going through rezoning, covers most of the city block bounded by North Street, Asaph Street, Madison Street and North Pitt Street. This site is one block just east of Washington Street, Old Town’s main north-south artery.

The deal is illustrative of a trend participants at RealShare Washington noted last week: property prices are starting to get too rich for many investors’ blood. Instead, they are finding the costs of development to finally be palatable.