Michael Gewirz has high hopes for the Southeast Washington neighborhood where a decade ago his family bought land to develop.
"It's not the CBD [central business district], but someday it will be as significant as the CBD," said Gewirz, president of his family's company, Potomac Investment Properties Inc.
Today, Potomac Investment plans to break ground on a 282,000-square-foot, $60 million office building at 300 M St. SE, across the street from the Washington Navy Yard. The eight-story building is beginning construction 100 percent preleased, all to Navy contractors. The contractors will be following their client, the Naval Sea Systems Command, from Crystal City when NavSea moves to the District in 2001. Employment on the base will double to more than 10,000 people.
All those people translate to new activity off-base, too. Last week, the District began work on a street beautification program that will add lights, trees and fancy curbs to a neighborhood that's now mostly abandoned warehouses.
At 80 M St. SE, Spaulding & Slye/Colliers plans to start construction in January on a 260,000-square-foot, $52 million building. Two leases are already signed -- Marconi North America for 90,000 square feet and Systems Planning & Analysis for 10,000 square feet. There are signed letters of intent for another 70,000 square feet, according to Spaulding Senior Vice President Eileen Circo.
"We imagine we'll be 95 percent preleased by Christmas," she said.
At 12th and M, at the other end of the Navy Yard, Washington Gas Light Co. and developer Lincoln Property Co. hope to start work later next year on a complex that would include four office buildings and a hotel.
In Gewirz's view, the Navy-related buildings are just the beginning for the neighborhood. He sees a time when the nearby Southeast Federal Center, now just raw land, will be filled with workers, and when various other industrial sites throughout near Southeast will have been upgraded.
"If you plan it correctly, you can essentially do a whole new city," he said.
Such talk isn't new -- for years, landowners such as the Gewirzes have been talking up the area as the next development frontier. The family owns several parcels nearby.
When they bought the land at 300 M St. in 1989, Gewirz said, they expected it would take six to seven years to change zoning and perceptions, as well as to ride out the real estate cycle. For people who have been in the real estate business for generations, a few extra years is no big deal, he said, and he's willing to wait for things to get better.
"We're here for the long haul," he said. "When you're here for 70 years and you expect to be here another 70 years, you can afford to be."
At 300 M St., the project architect is Weihe Design Group. Gilbane Building Co. is the general contractor. Leasing was handled by Patrick M. Mahady and E. Randall Lennon of Insignia/ESG's Washington office.
The Meridian Group, a Bethesda development firm, along with Boston-based New Boston Fund Inc., has purchased a development site at 3811 N. Fairfax Dr., near the Virginia Square Metro stop, and plans to start work this week on a 10-story, 160,000-square-foot office building.
The big attraction in the neighborhood is the Defense Advanced Research Projects Agency (DARPA), which is right next door to Meridian's planned building. Already, DARPA contractors have filled almost all the space in the newly built One Virginia Square building at 3601 Wilson Blvd.
St. Joe Co., a Florida firm with extensive real estate holdings, went on a Washington-area shopping spree last week, purchasing a D.C. brokerage firm and a Fairfax County building site.
St. Joe bought Morris-McNair & Associates, a boutique brokerage founded in 1988 by William R. Morris III and Bruce B. McNair, to add to its Advantis brokerage arm. The firm will fold into Advantis's existing local operation, formerly known as Goodman, Seegar Hogan Hoffler.
The company also purchased a 19.11-acre tract at the Westfields Corporate Center near Route 28. It has plans to develop two five-story office buildings there, totaling 240,000 square feet. Construction on the first one is scheduled to start in February. Like other landlords in the neighborhood, it hopes to market its buildings to high-tech companies.