Day Five of the ULI Leadership Institute, hosted at ULI-Washington’s headquarters in downtown DC, focused on real estate finance and the development process.

The day began with a presentation from Matt Hard, Development Manager at LCOR, who discussed the acquisition, construction, and leasing of the Edison apartments near Union Market. First, Matt outlined the schedule for developing the project was 42 months from acquisition to delivery. He emphasized how developers must make decisions on the market, such as potential rents, that won’t be tested for years until the project is complete. He highlighted some of the challenges developers face in the development process, such as securing entitlements and financing, performing site remediation, and evaluating market conditions, and concluded the presentation with the questions his team always asks themselves at the end of a project: “Did the assumptions you made 4 years ago hold? How close did you get?”

Next, the group heard from Edward Chaglassian and Ron Dalal, both of JBG Smith. Edward and Ron presented an introductory lesson on real estate finance and the different methods that developers use to evaluate deals. They discussed key commercial real estate concepts, such as cap rates, as well as measures of return used to evaluate development feasibility, such as yield on cost, internal rate of return, and equity multiples. Edward and Ron’s presentation also provided an understanding of how private developers make investment decisions based on risk profile.

For the third session of the day, the group heard a case study of the development of West Light & Squash on Fire, a unique public-private partnership that involved two parcels of land in the West End of DC. The now completed buildings include affordable housing, market-rate apartments and condominiums, a squash club, a new DC fire station, and a new public library. Speakers included Anna Shapiro, Director of Projects at the City’s Office of Public-Private Partnerships, DC Office of the City Administrator; Jennifer Weber, Development Manager, EastBanc; Cory Powell, COO, Dantes Partners LLC, and Sean Stadler, Managing Principal, WDG Architecture. The process to redevelop the two parcels of City-owned land began in 2009 when the District government released an RFP to develop the sites, which at the time housed a fire station and public library. Participants spoke about the complex nature of the deal to redevelop the two parcels and the difficulties of finding temporary space for a fire station and library during construction. Sean spoke to the creativity of the architecture on both projects and thanked the City for including high-quality design as a hallmark of a successful project. All involved said despite the complexity of the project and challenges faced along the way, that the end result demonstrated the value of public-private partnerships in furthering the City’s goals and maximizing the use of publicly-owned land.

After hearing about Eastbanc’s West Light and Squash on Fire, the Leadership Institute group had a chance see each development firsthand. The group first traveled to Squash on Fire, which, in addition to having squash courts, also includes a full-service restaurant and bar. The group watched a few games of squash while enjoying lunch. Once lunch ended, Jennifer Webber, a Development manager with Eastbanc, led a tour of the West Light building a few blocks away. The building was completed in 2017 and includes high-end apartments and condos, a new West End Library, and additional ground floor retail space such as coffee shop Bluestone Lane (which is connected to the library). As part of the tour, the group saw the new library, walked through a model unit in the condo building, and walked to the roof, which contains a community room, outdoor patio space, and pool.

Between the tour and the last session of the day, the group participated in the “Put a Problem in a Pot” activity, which allowed participants to anonymously put a problem they are facing in the workplace into a “pot” and have the rest of the group discuss possible solutions to address the problem. The group touched on topics such as how to take on more responsibility in the workplace and how to work through the public approvals process for development when there is distrust between the public agency and private developer. A number of people shared stories of similar situations that they have faced previously and how they responded, offering guidance to those facing challenges.

The last session of the day focused on leadership in community participation and was led by Evan Goldman, Vice President of Land Acquisition and Development at EYA. He discussed his critical role in the approval of the White Flint Sector Plan and development of Pike and Rose, a walkable, mixed-use development along Rockville Pike in Montgomery County. Evan led a consortium of developer’s with seemingly competitive development interests to align their common interests and work with the community to get the plan approved. His presentation offered great perspective on how to engage community members to reach consensus and build project support while also navigating the political process.

Next month, the group will meet for Day 6 – Placemaking + Design, to be held at the Bonifant Senior Apartment Community in Silver Spring.

Blog Credit:

Renan Snowden – Vice President of Planning & Development, Capitol River Front BID

Steven Reilly – Director, HR&A Advisors, Inc.