The nation of Qatar is not only financing a major portion of the colossal downtown development project CityCenterDC, but a key nonprofit from the Persian Gulf state will have a presence there when the first phase is completed early next year.
The Qatar Foundation International, a nonprofit educational group, will open a 15,188-square-foot office and cultural center in CityCenterDC on the fifth floor at 800 10th St. NW, according to the organization’s real estate advisors.
Maggie Mitchell Salem, executive director of the foundation, said in a statement issued through the real estate firm CBRE that the space would be “designed to increase knowledge and understanding of Arabic language and culture in the Americas.”
Salem called the cultural center “Al-Bayt,” Arabic for “home.” The foundation currently has offices at 1400 I St. NW and will relocate and open the cultural center in 2014.
“We sought more than mere square footage, but a true home for our staff and our new state-of-the art, interactive cultural experience, Al-Bayt,” Salem said in the release. “From the start, we were encouraged to think creatively about our combined office and cultural space. CityCenterDC provides us with the flexibility we need to design a truly innovative experience for our business guests and Al-Bayt visitors.”
Built on District-owned land where the city’s former convention center once stood, CityCenterDC’s first phase is being financed by $622 million from Qatari Diar Real Estate Investment Co., the real estate investment arm of the Qatar Investment Authority, Qatar’s sovereign wealth fund.
One of the largest construction projects on the East Coast, the development is expected to contribute to downtown’s renaissance. Since construction began in 2011, the project has landed the law firm Covington & Burling as an anchor tenant and has begun selling condos, listed at prices ranging from $600,000 to $3.5 million and leasing the 458 apartments.
When the Qataris made the CityCenter investment, they did so adhering to the restrictions of sharia, or Islamic law, which can prevent leases to banks (because the Koran forbids the collection of interest) or bars. Restaurants serving alcohol, however, are permissible and will be a major component of CityCenter, including a 17,000-square-foot Del Frisco’s Double Eagle Steak House.
Executives at Hines, the Houston-based real estate giant managing the project, have said that sharia-compliance had little or no effect on their retail plans, which are focused on fashion concepts and high-end retailers, possibly including an Apple store.
Qatar isn’t alone in wanting a major stake in Washington commercial real estate. Foreign investors have been snapping up downtown office buildings at an accelerating clip. Through Goldman Sachs, both the Qatar Investment Authority and the Kuwait Investment Authority bought a 79 percent stake in an 11-property Rosslyn office portfolio in 2011.
The foundation considers itself a nonpartisan, nonpolitical entity “dedicated to connecting cultures and advancing global citizenship through education.” Its major donor is the Qatar Foundation, in Doha.
The foundation’s real estate adviser, Audra Cunningham, vice president at CBRE, said the cultural center would provide a little bit of everything that Qatari culture has to offer. “You will walk into that space and get very familiar with their art, their language and their cuisine,” she said.
Although investors from the Qatar Investment Authority typically are not overly involved in management of CityCenter, Cunningham said they made clear during negotiations that they wanted to see a deal for the cultural center happen.
“They were very interested and they probably were more a part of this transaction [than typically]. They were very interested in making sure that QFI got everything that they wanted and everything that they needed,” Cunningham said.
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