The Marriott Wardman Park off of Connecticut Avenue NW is to undergo $50 million in renovations -- and part of the property will be converted to residences -- after a Chevy Chase-based developer and its partner bought the District's largest hotel.
JBG Cos. and CIM Group, a Los Angeles investment firm, bought the 1,300-room hotel at 2660 Woodley Road NW from Thayer Lodging Group, an investment company in Annapolis. Executives at JBG declined to disclose the price they paid for the hotel, which is near the Woodley Park Metro station. Real estate brokers close to the negotiations, who discussed the private terms on condition of anonymity, estimated that the deal, which closed Friday, is worth about $300 million.
JBG said the $50 million in renovations are to upgrade the hotel with new furniture in guest rooms, a new ballroom and a fitness center.
The buyers plan to turn the 199 rooms in the Park Tower section of the hotel, which faces Calvert Road, into apartments. Residents will likely have access to some of the hotel's services, such as dry cleaning, room service and the concierge, JBG executives said. Construction on that part of the hotel is likely to start in the middle of next year and be done in mid-2007, developers said.
In coming years, JBG said it will consider tearing down the hotel's existing ballroom and an above-ground parking garage to build condominium units where they now stand. D.C. planners and real estate brokers said that area could hold as many as 400 condominium units and about 200 underground parking spaces. The property is zoned for hotel and residential development.
JBG and Marriott officials said they will preserve and spruce up trees and grassy areas on the 16-acre property.
Ed Rudzinski, general manager of the hotel, said he and other officials of the hotel and JBG met with leaders of the Woodley Park Community Association a few weeks ago to brief them on plans for the project. Another meeting with the association's board and other community groups is planned for later this month. Leaders of the association could not immediately be reached for comment.
The developers said they have not yet priced the apartment or condo units, but real estate brokers said the for-sale units are likely to go for upwards of $700,000 for a one-bedroom unit.
"This is a dynamic hotel market, and we're excited about the residential components of the project," said Kenneth F. Finkelstein, a partner at JBG. "It's in a great location."
The move to turn some of the Marriott Wardman's hotel rooms into residential units comes as more hotels are coming on the market.
The District is planning to build a hotel that would become the District's largest near the new convention center downtown, and the Gaylord National Resort and Convention Center is expected to open as a mega-hotel for convention delegates on the shores of the Potomac River in Prince George's County.
"In this deal, JBG is able to take advantage of the hot residential market and convert hotel rooms to residential and add more units," said Marc A. Magazine, a first vice president at the hotel sales division of the real estate firm of CB Richard Ellis. "And they will increase the performance of the hotel because it will have fewer rooms to rent." Magazine recently sold a hotel in Bethesda that is to be torn down and replaced by condos.
The Wardman Park hotel, which was built in 1918 by local developer Harry Wardman, is one of the District's oldest. Its historic Wardman Tower was constructed as a residential hotel in 1928. In the 1970s, other wings were added and the Park Tower was built.
The hotel was known as the Sheraton Washington Hotel and run by the Sheraton hotel chain for more than four decades. But in a civil trial, Sheraton was forced last year to pay several million dollars to the property's previous owner, John Hancock Mutual Life Insurance, for allegedly mismanaging the hotel. Marriott International Inc., the Bethesda-based hotel chain, took over managing the property in 1998 and changed its name to the Marriott Wardman Park Hotel.
Thayer, which is headed by former Marriott senior executive Frederic V. Malek, bought the hotel in 1999 for $240 million and finished renovations that Hancock had started on the property.
"We made an investment in the hotel in 1999 and in the fourth quarter of 2001 after the terrorist attacks it was virtually empty in what is usually a very busy period," said Martin A. Reid, a managing director at Thayer. "But by the end of 2002, the hotel had almost fully recovered and has been performing extremely well."
GSA Official Moving On
F. Joseph Moravec, the commissioner of public buildings for the General Services Administration, is stepping down Aug. 1 to return to the private sector.
Moravec oversees about 5,500 employees and 345 million square feet of office space that federal agencies, courts, border stations and laboratories across the country lease or own. The GSA is the real estate agency of the federal government.
Moravec, who has been in the GSA post since 2001, said his decision to leave comes as he is about to turn 55 in September. "My friends in the executive search business tell me that if you want to be replanted in the private sector, its better to do it before you get much older," he said. "I plan to work until I drop and have no plans to retire.
"I also want to give my successor enough time under the current administration to make an impact," he said. "I served honorably and I made a contribution, and now it's time for me to leave and give somebody else a chance."
Moravec came to the District in 1978 from Boston and worked at several private real estate companies, including stints at Leggat McCall & Werner, Grubb & Ellis and Barnes, Morris, Parode & Foster.
He is known inside the GSA and among private developers and real estate brokers for trying to make the federal agency less bureaucratic. He has disposed of unused government property faster, streamlined the agency process for leasing space and established a national leasing contract program that gave the government more negotiating leverage.
* Monument Realty, a Washington developer, started building a 191,000-square-foot office building in Herndon. The project, known as Monument Three at Worldgate, is expected to be done by the end of 2006. No tenants have leased space yet.
* Minshall Stewart Properties, a real estate company based in the District, paid $101.5 million for two office buildings and two development sites in Vienna. John B. Levy & Co. of Richmond represented the buyer in the deal.
* Amstar Group LLC, a Denver developer, and Davidson Hotel Co. of Memphis paid $93.1 million for the 500-room Hilton Alexandria Mark Center hotel on Seminary Road in Alexandria. The new buyers plan a $9.5 million renovation of the hotel.
Dana Hedgpeth writes about commercial real estate and economic development. She can be reached at email@example.com.