In the condominium boom sweeping the District, developers are scrambling to build still more one- and two-bedroom units with granite countertops and stainless-steel appliances.
In most of the District, that is.
Developers have generally shunned areas east of the Anacostia River, which include many of the District's poorest neighborhoods. Those condo developments that have occurred have generally involved some form of D.C. government or federal subsidy. But a developer aims to change that with what it is calling the first fully private, market-rate condo building to go up in Anacostia in memory.
District-based Drummond Development LLC, a residential developer with properties all over the city, is building the Penn Circle condos, near Pennsylvania Avenue SE on 27th Street. Drummond is taking a decrepit structure built in 1958 and vacant for the past decade, gutting it and building 36 condos. The units are to have all the trappings that buyers of new condos have come to expect, including those granite countertops and stainless-steel appliances.
Steve Schwat, one of the principals of Drummond, is betting that buyers, facing astronomical housing prices in more developed parts of the District and its western suburbs, will inevitably look eastward seeking better bargains. The firm is planning to sell one-bedroom units in the Penn Circle project for about $175,000 and two-bedroom units for about $230,000. In the hyperactive market for D.C. condos, that qualifies as a bargain: Just across the Anacostia River in Capitol Hill, new condos are going for double those rates.
"It would qualify as affordable housing," Schwat said. "But we're not getting any tax breaks or public funding whatsoever." The site is something of a hike from the nearest Metro stop, but a light rail line to be built on Pennsylvania Avenue SE would provide easy access to the Anacostia Metro stop. There are already bus lines on Pennsylvania that lead downtown.
But will the condos sell? The market for such properties is untested. Schwat was worried that lenders would be reluctant to make mortgage loans to buyers of the units until bankers told him otherwise. Schwat said 300 people have filled out forms on the project's Web site indicating interest. But the real test will come when sales begin this summer; the project is to be completed in the fall.
So far, Schwat remains bullish. "I'm looking for other projects right in that neighborhood," he said. "If another building down the block becomes available, I already have enough people on our list to be able to find buyers for that."
Blogging for Tenants
In the past year, bloggers, with their online, diary-style Web logs, have influenced the presidential election and helped cost Dan Rather his job.
Might they now change the management of commercial real estate?