JBG, Grosvenor JV Prefer the Strong Case Made by Apartments

WASHINGTON, DC-Midway through the construction of a high-end condo building at 1401 S St., NW, the developers decided that apartments were a better way to go. Fortunately for the JGB Cos. and Grosvenor Americas, this shift will not be disruptive, as the design is remaining the same. “We decided that the rental market in this market was too robust to ignore,” Kai Reynolds, a principal with JBG, tells GlobeSt.com.

Reynolds declines to discuss development costs for the project, but says those were not a factor in the decision. Rather, it was the far more attractive exit strategy that apartments offer.

“The strength of the apartment market in DC and the Mid-Atlantic is very strong--there is a lot of demand for units, with little supply in the pipeline,” Reynolds says. “With institutional equity paying a lot of money for multifamily projects now we decided we needed to make this change for our investors.” 

The apartment building, to be called “the District,” was formerly known as District Condos. Reynolds says that the decision should not be viewed as a commentary on the strength--or lack thereof-–of condos here, as the company received a substantial amount of interest for the condominium project as well. That said, DC condos do come with an added cost--the sales tax associated with them.

The companies knew fundamentals for the project were in flux, but they weren’t worried, as there was enough leeway in the delivery schedule to make a decision. “We knew we didn’t have to start writing contracts for the condos until January 2012,” Reynolds says.

When completed, the District will be seven stories with 125 apartments. The Toronto-based interior design firm, Cecconi Simone, selected the building’s luxury interior finishes, which include floor-to-ceiling glass, hardwood floors, beautiful European cabinetry and expansive private balconies and terraces. The first floor will have 18,000 square feet of retail space.