By Jonathan O'Connell
Monday, August 16, 2010; 3
Tom Bozzuto and Penny Pritzker have made a first bet with their new $75 million apartment fund and it is on Jim Abdo's Catholic University project, a major equity investment in new housing construction the likes of which have been rare since the economic collapse in 2008.
Abdo, a D.C. developer whose popular condominium projects helped remake 14th Street NW and H Street NE, is planning nearly 1 million square feet of new housing and retail for Catholic University's south campus in Northeast D.C.
Bozzuto, a Greenbelt residential developer, and Pritzker Realty Group, a Chicago investment firm, announced a $75 million joint venture for apartment investments in late July. But a deal to become equity partners and co-developers in Abdo's Catholic's project, which will feature 720 apartments and 45 townhomes, was already in the works. The firms declined to disclose the magnitude of the Bozzuto-Pritzker investment, but Toby S. Bozzuto, president of Bozzuto Development, said it was significant enough that the $200 million development would be able to break ground in second half of 2011.
"It's a transit-oriented location, it's an opportunity to work with a public entity that's a tremendous asset to the community, a financial institution we admire greatly and are already partnering with, and a developer we greatly admire and who we really want to work with," Toby Bozzuto said in an interview.
In a statement, Pritzker, chief executive of Pritzker Realty, called the project "a prime example of mixed-use, transit-oriented, urban infill development" and said that, thanks to the high demand and low unemployment in the Washington area, she was confident it was "a remarkably sound investment."
Abdo said the Bozzuto-Pritzker fund offered financial backing, expertise and, in Bozzuto, a local partner, which is Abdo's preference. "When we saw them creating this fund, we thought, wow, this is sort of a best-of-both-worlds scenario," he said.
The deal marks an important step forward for a project Abdo stuck with through the downturn even as other university development plans stalled or collapsed. He has suffered his own setbacks, announcing in May that he would forfeit a plan to build a mixed-use residential retail project on 16 acres along New York Avenue in Northeast, citing the economy, but he called the Catholic investment a harbinger of better news for the industry.
"I think it's a sign, because the scale of this thing really says that there is confidence returning to our industry," he said.
The Catholic south campus site comprises nine acres adjacent to a Red Line Metro station in the Brookland neighborhood. The plans, already approved by the city, call for a college main street with 83,000 square feet of street-level retail, 15,000 square feet of artists' studio space and 850 below-grade parking spaces. Abdo signed Asadoorian Retail Solutions of Georgetown to bring in retailers. "We don't want this to look like, you know, Pentagon City mall, we don't want it to look like Gainesville, Va. We want it to be reflective of our urban environment, but we also want it to be reflective of a college town," Abdo said.