Douglas Development recently sold a portfolio of three properties in the Washington, D.C. area to affiliates of American Armed Forces Mutual Aid Association for a combined $96.1 million.
The transaction involved the former Pappas Tomato Factory building at 1401 Okie St. NE, the historic Equitable Co-Operative Building Association property at 915 F St. NW and a 16-acre parcel near the National Arboretum.
The three-story property at 1401 Okie St. was originally owned by Peter and Phillip Pappas and acquired by Douglas Development in 2014 for $8.4 million. The company then redeveloped the former factory into a 94,000-square-foot retail space, which is now home to tenants such as Gravitas, Compass Coffee, Kick Axe Throwing D.C., Throw Social D.C. and Other Half Brewing. The property recently sold for $55.6 million.
Also included in the sale is the historic Equitable Co-Operative Building at 915 F St. NW. This 10,668-square-foot, single-story building was constructed in 1911 and acquired by Douglas Development in 2011 for $5 million. Following redevelopment, the building now houses Knead Hospitality + Design’s Succotash restaurant. The latest sale netted its former owner $10.3 million.
Lastly, the portfolio includes a 16-acre parcel near the National Arboretum. Acquired by Douglas Development in 2017 for $66 million, this land was initially envisioned for a 1.5-million-square-foot, mixed-use development known as New City DC. However, Douglas Development recently submitted a rezoning application to develop the site into a 186,000-square-foot property for light industrial and distribution uses with accessory office space on a portion of the land. A 99-year ground lease for 10 acres of this property, valued at $25.6 million, was also assigned to an entity connected to the developer.
The year 2024 proved to be a year of mixed results for Douglas Development. While the company added 701 Eighth St. NW — a 138,000-square-foot office building in Washington, D.C. — to its portfolio for a relatively modest $34.3 million from an affiliate of Voya Investment Management, it also defaulted on a $51.6 million commercial mortgage-backed securities loan on a 14-property portfolio across the D.C. market. This default followed the successful securing of a $36 million refinancing package from the Bank of Montreal for one of its office towers in Delaware in November.
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