JBG Cos. puts equity stake in L’Enfant Plaza up for sale

Chevy Chase-based developer the JBG Cos. is offering up an equity stake in L’Enfant Plaza, the federal office complex in Southwest D.C. that it purchased in 2003.

In 2003, JBG purchased 955 and 470-490 L’Enfant Plaza, an office building and a complex that includes an underground shopping center, a hotel and additional office space, for an estimated $200 million.

The developer set aside its plans to upgrade the complex, designed by Modernist architect I.M. Pei, during the financial collapse, but as the commercial real estate market returned, the company set about to upgrade its holdings there in both the near and long-term.

JBG is putting $40 million into the 180,000-square-foot underground mall, introducing light and color into entrances and passageways, as well as signing a string of lunch options including Roti Mediterranean Grill, Potbelly and Au Bon Pain.

In coming years, JBG plans to add to the complex with more than 1 million square feet of new development. The company already has rights to build a 200,000-square-foot office building on the southern end of Ninth Street and a 234-room Homewood Suites at the Southwest corner of Ninth and D streets SW.

It also plans a 600,000-square-foot horseshoe-shaped office building for the plaza itself.

Company spokesman Matthew Blocher cautioned that the stake JBG is offering is for the existing office buildings, not the development projects or the 370-room hotel.

“We have put an investment package out to the market for a potential investment partner, a practice done regularly in the industry. This is in line with our opportunity, risk and investment strategy,” Blocher said in an e-mail.

The buildings, built in the late 1960s and early 1970s, are considered Class B, or second tier, as office properties. But they are central to a quadrant of the District that is attracting growing attention from private and public investors.

The National Capital Planning Commission, the federal government’s planning agency, issued a draft plan last month calling for the area to be refurbished as a more walkable ‘ecodistrict.’ PN Hoffman and Madison Marquette, developers of the Southwest Waterfront, are seeking $750 million in financing as they prepare to begin that project, and reported strong interest abroad after a visit to China.

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.
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