WHC Acquires DC Development for $72M

Loree Grand. Image courtesy of Washington Housing Conservancy

Washington Housing Conservancy, a nonprofit that acquires, preserves and manages affordable rental homes in the Greater Washington, D.C., area, has acquired Loree Grand, a 212-unit multifamily asset in the District for $71.5 million, with financial backing from Amazon’s Housing Equity Fund and JBG SMITH’s Impact Pool.

The seller of the 10-story luxury property at 250 K St. NE  in D.C.’s NoMa neighborhood was Union Place Phase I LLC, an affiliate of TIAA-CREF, according to the Washington Business Journal.

In partnership with Amazon’s Housing Equity Fund and the Impact Pool, an investment vehicle managed by D.C.-area developer JB SMITH that provides financing for the preservation and creation of affordable workforce housing, the acquisition enables WHC to stabilize rents for moderate-income workers and their families in a highly competitive housing market. WHC will preserve Loree Grand’s existing 30 Inclusionary Zoning units for 99 years and create an additional 129 affordable units for residents earning 80 percent of area median income or less. The remaining 53 units are market rate.

Eagle Bank provided first mortgage financing. Amazon Housing Equity Fund provided subordinate financing and the Washington Housing Initiative Impact Pool provided mezzanine financing for the acquisition. Arnold & Porter provided pro bono legal counsel to WHC on the transaction.

AJ Jackson, EVP of social impact investing at JBG SMITH, said in a prepared statement the partnership between JBG Smith and the Impact Pool, provides a model for how the private sector can work with communities to create and preserve more affordable homes.

Loree Grand’s location provides opportunities for residents to live in an amenity-rich, walkable neighborhood with convenient access to public transportation, retail, childcare and other essential services. Bordered by the NoMa, Union Market and H Street neighborhoods, the 195,000-square-foot building has studio, one- and two-bedroom apartments within walking distance of Union Station, Capitol Hill and the Smithsonian Museums. Loree Grand apartments average just over 900 square feet, one of the largest in the submarket. The units have well-appointed kitchens and the building has expansive views and a fitness center. An early childcare and preschool center recently opened nearby.

Reaching Housing Goals

Loree Grand is WHC’s second purchase in Washington, D.C., and expands the nonprofit’s portfolio to five apartment properties with more than 1,600 units, all acquired within the past two years in D.C. and Maryland and Virginia suburbs. WHC purchased the 214-unit Huntwood Courts at 5000 Hunt St., NE, for $25 million in December 2021, according to Commercial Observer. With these transactions, WHC is quickly reaching its initial goal to acquire, preserve and manage 3,000 affordable homes for individuals and families in inclusive mixed-income communities.

Kimberly Driggins, WHC executive director, said in prepared remarks the acquisition of Loree Grand and the promise to deliver affordable rents serves current and future residents and the group’s mission to promote housing stability. Citing support from Amazon and its Housing Equity Fund and the Impact Pool, Driggins said they are preserving long-term affordability in diverse, high-opportunity neighborhoods under tremendous redevelopment pressure. Driggins noted that creating affordable homes ensures more middle-income earners such as first responders, hospitality workers and teachers are relieved of rent burdens that make it hard to save money and build wealth.

WHC completed its first purchase in December 2020 with the acquisition of Crystal House, an 825-unit apartment community in Arlington, Va., located at 1900 S. Eads St. near Amazon’s HQ2 development. Capital from the Impact Pool along with senior financing from Amazon’s Housing Equity Fund allowed the purchase to close in less than two months. Amazon announced the $2 billion housing fund in January 2021. A month later, the Impact Pool, a fund created by JBG Smith and the nonprofit Federal Council, had its final closing after raising $114.5 million from investors.