Potential Foreclosure on Office-to-Residential Project in D.C.
The Philadelphia-based developer Post Brothers, known for its focus on converting office spaces to residential units, is facing a foreclosure notice for one of its projects in Washington, D.C. The property at 2100 M Street NW, which spans approximately 301,000 square feet in the West End neighborhood, is near George Washington University.
Details of the Foreclosure Notice
According to The Business Journals, Post Brothers received a foreclosure notice, and an auction is scheduled for April 10. This situation arises after the firm acquired the building for $66.8 million in 2023 from former owners Network Realty Partners and Meadow Partners, significantly less than the $92.5 million price paid by the prior owners in 2019.
Financial Background
The acquisition was financed through a loan of $66.7 million from AllianceBernstein. However, Post Brothers currently has an outstanding balance of $77.9 million, which has surpassed its maturity date. The firm had ambitious plans for the property, intending to transform it into 400 residential units and introduce additional space for retail.
Future Development Plans
Matt Pestronk, the co-founder and president of Post Brothers, expressed his optimism regarding the overall rental market in Washington, D.C. “We are looking forward to resolving this matter and pursuing development of the property,” he stated to Commercial Observer. The planned development includes adding five stories and a penthouse, contributing a total of 100,000 square feet of residential space along with 20,000 square feet allocated for ground-floor retail.
Historical Context of the Property
Notably, 2100 M Street NW has a rich history, housing the Urban Institute for 50 years before its relocation to 500 L’Enfant Plaza. As Post Brothers aims for conversion, they have already gained approval for their plans from the D.C. Board of Zoning Adjustment as of October.
Broader Office-to-Residential Trends
Pestronk has noted that the office-to-residential conversion trend arises as many buildings struggle to maintain viability for traditional office use. He remarked, “The office market [in D.C.] doesn’t yet have a lot of investors chasing every opportunity … but if someone can spend less [by keeping an office building as is] and get the same return, they’re probably going to do that.”
Other Projects by Post Brothers
In addition to the M Street project, Post Brothers is actively converting 1825 and 1875 Connecticut Avenue NW, transforming a 700,000-square-foot plaza into roughly 600 residential units. This initiative, known as Universal North and South, is positioned as the largest office-to-residential project currently underway in D.C., benefiting from a 20-year tax abatement aimed at encouraging such developments.
For further inquiries, Nick Trombola can be contacted at nt*******@co****************.com.