Developer Melvin Lenkin has reportedly agreed to pay in excess of $20 million--or more than $1,000 a square foot--for two parcels of property on Connecticut Avenue NW, setting what several real estate experts called a record price for downtown Washington real estate.
The parcels Lenkin bought, sources said, are the W&J Sloane furniture store and the former headquarters of the Washington bureau of ABC News, both on the avenue's west side between L and M streets NW.
Lenkin plans to tear down the two current buildings and replace them with a large office building, sources said. Lenkin could not be reached for coment.
W&J Sloane announced earlier this month that it would close its store at 1130 Connecticut Avenue in about 90 days as part of the company's overall plan to redesign its stores into much smaller showrooms that place greater emphasis on personalized interior design. The second building, 1124 Connecticut, has been vacant since ABC moved out more than a year ago.
Lenkin, who has built about a dozen downtown office buildings, has reportedly agreed to pay Sidney Zlotnick, a Washington-area attorney, and his sister, Renee Z. Kraft, of Tracy Place NW, more than $1,000 a square foot, which sets a new price record for downtown real estate, said several real estate experts.
The record was previously held by Second British American Inc., the U.S. branch of a real estate and insurance group in Great Britain which bought the Demonet Building at 1155 Connecticut Avenue NW. last year for about $1,000 a square foot.
Kraft would not comment on the sale and referred all inquiries to her brother. Zlotnick could not be reached.
Lenkin was one of three bidders for the property. The two unsuccessful bidders were the Prudential Insurance Co. and a group of foreign investors, real estate sources said.
Earlier this week the city's urban renewal agency revealed that a development group led by Lenkin had made another proposal for a series of price concessions on the Portal site, a 10-acre, city-owned tract in Southwest.
The agency awarded Lenkin and his partners the site last year after the group said it would pay $45 million cash within six months. But this year, Lenkin proposed paying $38 million for the land, most of the money coming around the year 2000. The Redevelopment Land Agency rejected that proposal, and gave the developers and the city a month to negotiate a new deal.
In the newest proposal, the developers have again set the price at $38 million. But the new plan calls for the city to receive 25 percent of any profits generated by the planned office building and hotel complex.
In addition the city would receive $3.8 million in cash at the settlement instead of the previously offered $3 million.
S. Lee Narrow, the attorney representing the developers, when asked why Lenkin could pay so much for property on Connecticut Avenue while asking for price concessions in Southwest said, "There is no comparability of the sites in terms of rental price" or what it costs to make them buildable. "This is not apples and apples," he said.
At the Portal site, "there is a railroad line running through the middle of the property," he said.
Two years ago Banneker Associates assured RLA officials that the railroad would not be a problem to their development plans.
Other real estate experts agreed with Narrow, saying that while Connecticut Avenue was a favorite location for tenants willing to pay high prices to lease office space, Southwest was still considered a fringe area.