There is precious little other development under way here--either officially or in the negotiation stage--despite the DC area's relative strength. It is no surprise, of course, that the multifamily space is the first category to be targeted for development now. Sales of multifamily properties have been traded furiously; at the same time the DC area is nearing a supply shortage for condos, according to McWilliams|Ballard's 2009 Washington Metro Area Condominium Market Overview. Another sign that development is comingback: AvalonBay has publicly committed to a development strategy in anticipation of the unmet demand in two years.
The bulk of Milam's work now, though, is on multifamily sales. He reports ten deals under contract. "DC is on fire," he says.
A recent trade he brokered was the New Amsterdam, a 75,375-square foot multifamily and retail property located at 2701 14th St. It sold for$11.7 million, or $156 per square foot, or $130,556 per unit.
The seller was Penrose Management Co., an affordable housing company in Philadelphia; the buyer was Van Meter Construction. The building traded at a 5 cap rate, Milan says. "That is how ridiculous pricing has gotten here. This deal fell out of contract three time because of the pricing, in fact."
The mixed-use property's 90 residential units are currently 99% occupied; its four ground-level retail spaces total 4,000 square feet.
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