Northeast Heights, a large D.C. shopping development including two centers at Senator Square and East River Park, will be receiving a serious makeover thanks to LISC's Black Economic Development Fund. The site, acquired by Standard Real Estate Investments LP, a minority-owned real estate firm, plans to advance a mixed-use development with roughly 1,500 residential units (300 units would be affordable) and 120,000 square feet of retail. The BEDF contributed $10 million to Standard in acquisition financing, with the entire project costing around $650 million.
Tiffany Durr, senior director of fund investments for the BEDF and LISC, explained the project is "creating quality affordable homes and commercial activity that will ultimately lead to economic opportunities for local residents.” Located in a federal opportunity zone, "the plan aligns with the BEDF’s mission to close the racial wealth gap by increasing capital access for Black-led businesses and developers,” Durr said in a statement.
See the original article by the Washington Business Journal here:
Mega Northeast D.C. development site sold, 1,500 residential units planned
By Tristan Navera, Staff Reporter
A new team is taking on the planned redevelopment of two Northeast D.C. shopping centers.
Standard Real Estate Investments LP has acquired a 13-acre site known as Northeast Heights, which includes the Senator Square and East River Park shopping centers near the intersection of Benning Road and Minnesota Avenue NE, about a third of a mile from the Minnesota Avenue Metro station. There, Standard plans to advance a previously entitled mixed-use redevelopment with roughly 1,500 residential units and 120,000 square feet of retail. About 300 units would be affordable, developed with NHT Communities, Standard officials said.
Cedar Realty Trust (NYSE: CDR), which assembled the properties between 2015 and 2018 for about $40 million, was the seller. The deal has not yet cleared the D.C. Recorder of Deeds, and Standard declined to disclose the price. But Standard Principal Jerome Nichols said the entire project will cost about $650 million, with acquisition and some early work being financed by the Black Economic Development Fund, managed by affiliates of Local Initiatives Support Corp. (LISC) and Forbright Bank.
Cedar Realty Trust had secured entitlements for Northeast Heights and started construction, with Trammell Crow Co., on a six-story, 258,000-square-foot headquarters for D.C.’s Department of General Services on the western portion of the property — Standard did not acquire this piece. Last year, it secured $105 million in financing from JPMorgan and began penciling out a plan for residential and retail in place of both shopping centers, in partnership with Asland Capital Partners and Goldman Sachs Urban Investment Group.
The Black Economic Development Fund provided Standard $10 million in acquisition financing, the team announced. Tiffany Durr, senior director of fund investments for the BEDF and LISC, said the project is "creating quality affordable homes and commercial activity that will ultimately lead to economic opportunities for local residents.” Northeast Heights is located within a federal opportunity zone and the project has been discussed as a potential recipient of tax-increment financing support from the District. Nichols said Standard will likely seek both equity and debt for vertical construction.
"The plan aligns with the BEDF’s mission to close the racial wealth gap by increasing capital access for Black-led businesses and developers,” Durr said in a statement.
It will take at least a year of pre-development work before Standard can advance to construction. In that time it expects to meet with neighbors and arrange additional financing, Nichols said. What remains to be seen is the market for tenants — East River Park is anchored by a Safeway and a 70,000-square-foot grocer had been a part of the original redevelopment plan. Standard plans to pursue retail and food-focused tenants, with early conversations also seeing requests for medical users.
Separately, Standard Real Estate is working with NHT and Trammell Crow Co. on a $290 million mixed-use project at the Congress Heights Metro station — another project started by another team. Northeast Heights may be more complex given the complicated financing required coupled with what's already an active shopping center with tenants who'll have to be relocated, though it may seek to bring some of them back.
We can go tomorrow "It's hard to get things done in this real estate market, but one thing we can lean on is these community-serving retail centers and housing developments with well-priced attainable housing," Nichols said. "They're necessary in all parts of the economic cycle, more so in times like this."