Real estate executive Westreich has big plans for Rosslyn
When Anthony Westreich was in his 20s he was handed the keys to nearly 3 million square feet of office properties in Rosslyn, a commercial real estate market that many analysts consider one of the best in the country.
What did Westreich do? He moved to California and started an Internet company.
Building a dot-com start-up wasn't the work for which his Westreich's father, Stanley, had prepared him. The grandson of German immigrants, the senior Westreich and his partners at Westfield Realty built Rosslyn from a residential neighborhood and small industrial area into an enclave of major office buildings. After Westreich returned from college at Southern Methodist University, he cut his teeth overseeing leasing and construction for his father for five years and was in line to inherit the real estate portfolio, then worth hundreds of millions of dollars.
But managing a mature collection of office buildings can be dull work to an entrepreneur.
"They weren't ready to do anything," Westreich said of the Westfield executives at the time. In developer's parlance, it was the wrong point in the cycle -- there wasn't much new property to develop. He left for Silicon Valley. "I think he was disappointed but he was also supportive of my wanting to build my own business," he said of his father.
Now his father is the one in California, playing golf and cards in San Diego, and the real estate domain he built is back in the family name. Westreich, who turns 42 on Dec. 2, is hitting the cycle at what he believes is the perfect time to begin developing the portfolio again, and trying to remake Rosslyn into a commercial center that can compete with the District for every type of commercial tenant.
He is not short on guts. After selling the Internet company he helped found, Novo Media Corp., in 2000, Westreich moved to New York City, married and re-entered real estate, buying into Max Capital Management Corp. He took over Max Capital a few years later, re-branding it Monday Properties and buying back his father's 10-property Rosslyn portfolio from Beacon Capital Partners for $1.2 billion after it had sold just two years earlier for almost $200 million less.
His partner in the transaction was Lehman Brothers, which filed for bankruptcy just more than a year later. But when an existing loan on the property nearly came due, Westreich and Lehman -- the latter mired in bankruptcy -- put another $263 million of equity into the deal.
His plan to begin building a speculative office building at 1812 North Moore has drawn everything from nods of approval to bewildered shakes of the head in the industry. Westreich has no tenants and no financing for the project. He says he decided to start construction to break the "stalemate" between the capital markets and prospective tenants, and that it allowed him to take advantage of low interest rates and construction costs. The worst case scenario might be that he spends 14 months and $30 million building an underground parking garage, doesn't get a bite from the market, and has to cover it over.
That won't happen without Westreich pulling out every stop over the next year to market the building as the biggest, boldest and best leasing option for high-end tenants, producing a 90-second video montage, advertising heavily in local media and holding a groundbreaking ceremony with a cake with a model of the building atop it. Newspaper reporters were offered to have a car and driver pick them up and driven to the ceremony.
Westreich says that by signaling that construction has begun, companies that have not considered Rosslyn in the past will take a serious look. "I am of the belief that a law firm jumps the river," he said.