“We’ve got strong employment metrics there and it’s the second-largest office market in the U.S.,” said Great Gulf senior vice-president of high-rise development Geoff Matthews, who added the company has been interested in Washington for five years.
“That’s creating great opportunities for housing, given all the employment opportunities and the influx of individuals who will be working in D.C.”
EDENS develops, owns and operates shopping centres in primary markets across the United States and has a portfolio of 125 properties. It owns the land in Washington’s Union Market District and was looking for a partner with whom to develop it.
Great Gulf seemed like a good fit after the two companies were brought together by a local broker.
Union Market District property
“Union Market is a sizable piece of post-industrial land that was formerly used as a market in the early part of the 20th century, but for the past half-century has sat somewhat derelict, even though it’s only a mile-and-a-half from the Capitol and within a two-minute walk of a Red Line metro stop,” said Matthews.
“EDENS saw the strategic value of owning that land from their perspective, being a retail REIT. They also recognized that they could use a developer partner to create the building and get the highest and best use for the land. In order to have successful retail, you need density over and above and around that retail.”
The 10-storey, mixed-use, purpose-built multi-family rental building at 1300 4th Street NE will total 153,000 square feet. It will feature: approximately 12,000 square feet of retail at ground level; 134 residential units with approximately 120 parking spaces; and more than 60 bicycle stalls.
The building was designed by Washington-based Shalom Baranes Associates Architects, with interiors by Mason Studio and landscape architecture by Mahan Rykiel Associates. Occupancy is expected in late 2020 or early 2021.
“The market for rental in D.C. is strong, with a lot of professional service workers being in D.C. for a period of time, but not necessarily over the long term, and not sure what they want to do from a housing perspective, so they opt to rent,” said Matthews.
Great Gulf’s American growth
Great Gulf is talking to EDENS and other landowners in the D.C. area where it’s looking to build a portfolio.
The company’s Ashton Woods Homes subsidiary has built low-rise suburban housing in its base of Atlanta and 13 other cities in the U.S. since the mid-1980s. Matthews said Great Gulf now wants to add higher-density properties in American markets where it sees growth potential.
“We have two sites in Dallas, Texas and are on the cusp of launching a condo project in West Palm Beach, Florida. There’s also a site we recently acquired with EDENS in Buckhead in Atlanta,” he explained.
“Toronto is our backyard and will always be familiar to us. It continues to be a great market, but it’s also a market that’s not without challenges when it comes to costs on the business side.
“So we want to be able to diversify geographically to hedge some of those potential economic headwinds down the road. So we see the U.S., in the right markets, as an opportunity for us to expand our platform.”
EDENS owns plenty of U.S. properties and Great Gulf would like to enhance the two firms’ development relationship as a means of growing its American portfolio.
Great Gulf in Alberta and Toronto
Matthews said there’s also another Canadian market where Great Gulf is interested in developing down the road.
“We have some interest out west in Alberta, though that’s a little bit slower at the moment with the market being as it is. But it was an opportunity for us to buy well and own that land so, when the market does come back up, we’ll be in a good position to grow our platform in the West.”
Meanwhile, Great Gulf still has its hands full with 10 projects either under construction or development in Toronto, either on its own or in partnerships.
The biggest is the Mirvish + Gehry mixed-use project on King Street that will feature 92- and 82-storey condominium towers. Great Gulf is looking to bring the project to market in mid-2019.