Developers, real estate brokers and planners said the site of Metro's headquarters downtown, which D.C. Mayor Anthony A. Williams (D) proposed putting on the market last week, would draw great interest for redevelopment as offices, retail or housing.
The Jackson Graham Building at 600 Fifth Street NW sits on prime real estate, developers said, as there are few sites available to redevelop in downtown. The eight-story building, totaling about 430,000 square feet and covering a city block, faces the National Building Museum. MCI Center is behind it. A firehouse is on one side and a few mom-and-pop shops are on the other.
"There are so few places you can buy an empty building in the city, so any building is going to get a lot of attention," said Jayne Shister, a broker at the real estate company of Cassidy & Pinkard. "It's close to Metro, close to restaurants. It has the building museum, windows on all four sides and you're looking at the MCI building."
Williams proposed that Metro sell the headquarters, which was completed in 1974, and build a new one on about five acres of empty land near the Anacostia Metro station in Southeast Washington, part of an effort to spur development east of the Anacostia River.
Phillip Thomas, Washington area managing director for CarrAmerica Realty Corp., said his company would probably be interested in bidding on the Fifth Street property.
"You'd want to leave the structure in place but redevelop it with all-new mechanical work," Thomas said. "Hopefully the structure could be salvaged, and you could bring it online as an office building.
"They'd get their maximum value if they sold it now," Thomas said, because of the hot market for downtown property.
Brokers said the concrete building needs repairs -- problems include poor air conditioning and too few electrical outlets -- so it's likely to fetch about $75 million, or $174 per square foot. By comparison, newer, fully leased office buildings in prime downtown locations trade for an average of $443 per square foot.
The Metro building was constructed when its East End neighborhood was rundown. But in the past few years the area has become one of the District's development hot spots.
It was transformed by such projects as MCI Center, the $130 million headquarters of the National Academy of Sciences at E and Fifth streets NW, and the conversion of the former Hecht's Co. building into a 400,000-square-foot office building. Two developers, Trammell Crow Co. and Akridge, expect to build office buildings along nearby Sixth Street NW.
"Three years ago that would have been a very pioneering place, but now it's in the center of activity," said Gerry Widdicombe, director of economic development for the Downtown D.C. Business Improvement District. "You could see the Metro building there becoming half office and half residential."
At the same time, Metro's potential move of about 1,100 employees from downtown to Southeast could spur development in that area, some developers and brokers say, although they caution that it wouldn't happen overnight.
Along the commercial thoroughfare of Martin Luther King Jr. Avenue SE, there is a hodgepodge of retailers such as hair and nail salons, cell-phone vendors, check-cashing stands, liquor stores and take-out restaurants serving Chinese food and fried chicken.
In the past year, five new businesses opened in Anacostia: a sandwich shop, a women's clothing store, a sportswear retailer, a construction company and an insurance office, said Yavocka D. Young, executive director of Main Street Anacostia Inc., a program to improve streets and storefront facades.
Metro's move to the Anacostia site would make it one of several planned projects for the economically depressed area. Its offices would likely be shared with the Anacostia Waterfront Corp., a publicly chartered company created to guide redevelopment along the river.
Last month, ground was broken for an office and retail complex called Anacostia Gateway eight blocks north along Martin Luther King Jr. Avenue, at the foot of the 11th Street bridges. And the D.C. Transportation Department is planning to move its offices to a building next to the Gateway project.
Developer Douglas Jemal owns several mostly vacant parcels along Martin Luther King Jr. Avenue near the Anacostia Metro station, on which plans to stores and residential units. He said the effect of Metro moving its headquarters to the neighborhood is unclear, "but it can't hurt."
" here will be people working there, and the retail will come if the bodies are there to spend the money," Jemal said.
Other developers and brokers caution that despite $200 million in public and private investment in Anacostia over the next five to seven years for improvements such as a light rail system, spruced-up storefronts and a neighborhood library, getting more retailers and sit-down restaurants will take more.
"Not any one event is going to be the silver bullet for that area," said Richard S. Lake, a retail developer in the city. "Restaurants need daytime population. Government employees may not be the final solution, but it could help spur other daytime office users to want to come there and be near the Metro."
He suggested that the District may need to offer incentives or consider increasing the density allowed for new buildings in Anacostia to attract developers to build more and sooner.
"There won't be any restaurants coming there right away" if Metro moves in, Lake said. "But if you create an urban business environment there where people go there instead of coming downtown then the amenities will come."
Cardiologists Heading to D.C.
The American College of Cardiology bought an office building at 2400 N St. NW in the District for its new headquarters. A spokeswoman for the 33,000-member medical society said it paid about $67 million for the 172,000-square-foot building. The organization, whose members include heart doctors, nurses and physician's assistants, plans to y remodel the building before moving from its headquarters in Bethesda in mid-2006.
"Moving to the District will clearly reinforce our work on the national and world stage," Pamela S. Douglas, president of the organization, said in a written statement. In addition to administrative offices, the headquarters will have facilities to provide continuing education programs for members.
The nonprofit organization said the District government provided tax-exempt bond financing and other benefits for the move that it did not detail. The sale was brokered by Trammel Crow. The seller was Square 24 Office Building LLC.
* Monument Realty of D.C. bought a 256-unit apartment complex called the Meridian III at Courthouse Commons in Arlington and plans to turn it into condominiums.
* T&M Venture II LLC of Reston paid $13.5 million for a 68,500-square-foot office building at 7601 Lewinsville Road in McLean. CB Richard Ellis was the broker in the deal.
* Cisco Systems Inc. renewed its 113,000-square-foot lease for the entire building at Four Dulles Tech Center in Herndon. Dana Hedgpeth writes about commercial real estate and economic development. Her e-mail address is email@example.com.
Mayor Anthony A. Williams's suggestion to move the Metro headquarters would make the vacated office a lucrative property.