Work at the Parks at Walter Reed is gaining steam. Here’s a look at what comes next.
By Alex Koma – Staff Reporter, Washington Business Journal
Nov 21, 2019, 2:55pm EST
Buildings are rising, retailers are circling and plans are coalescing at the Parks at Walter Reed, the massive mixed-use redevelopment transforming the old Army medical center campus in Northwest D.C.
The project’s developers —- a partnership of Hines, Urban Atlantic and Triden Development Corp. — say they’re on track to deliver the first pieces next year of what will become a 3.1 million-square-foot development. And they’ve also made crucial progress in laying the groundwork for a town center at the heart of the development, wrapping up the demolition of the 1970s-era hospital building that has long dominated the property.
That’s helped them start to firm up plans for that crucial section, designed to be a mix of residential and retail — creating a community center for the overhauled campus (which also includes a new research facility from Children’s National Health System). Notably, the developers say they are on the cusp of signing a grocer to anchor the town center.
While they won’t reveal details yet, they believe they’re close to landing a host of retailers (long a struggle for the team as the effort came together). More broadly, they see that progress on leasing as evidence that one of the most ambitious projects within the District is turning a corner.
“We have unparalleled resources on this site,” said Vicki Davis, managing director and co-founder of Urban Atlantic. “You won’t see this anywhere in the city.”
Davis and her team are particularly pleased to see buildings coming out of the ground following a lengthy process of readying the site for construction. The developers held a ceremonial groundbreaking for the public-private project in 2017, winning the rights to overhaul the campus after the Army transferred ownership to the District in 2016, and have been hard at work rehabbing the site’s infrastructure ever since.
They’ve also readied one building to become home to veterans and seniors in affordable apartments, with some residents just about ready to move in. Two other residential buildings will soon follow: The Brooks, which includes 89 for-sale condos, and The Vale, a 301-unit apartment building with ground-floor retail.
Both are set to deliver in the fourth quarter of 2020, rising on the southeast corner of the property along Georgia Avenue NW. And the developers say they’ve seen strong interest in the condos already from potential buyers.
“We didn’t want to just do one random building to start,” said Caroline Kenney, Urban Atlantic’s managing director of public/private development. “By building out this corner, we’re creating a district within the project. I think that’s an important strategic decision for us.”
Cranes rise on Georgia Avenue as the first two residential buildings at the Parks at Walter Reed take shape.
Alex Koma
Alongside those buildings, the developers hope to open an “arts park,” which will include the renovation of a former fire station and auto shop into new arts space. Those will stand adjacent to a public plaza and a dog park.
Kenney said her team has done “heavy outreach to local arts organizations looking for below-market space” in those buildings, and is optimistic they’ll have a tenant nailed down soon to offer programming. She added she hopes to secure historic preservation approvals for rehab work next month.
Next comes the town center, a potential hub of activity for the 66-acre section of Walter Reed the developers control — the State Department controls what’s left, roughly 50 acres.
Perhaps the largest hurdle for the project’s backers was the demolition of the 2.7 million-square-foot Army hospital building, a sturdy structure that took months to tear down. Katie Wiacek, a managing director at Hines, said that just “one tiny tower” is still standing, set to come down in the weeks ahead.
That will clear the way for construction on the town center to start by January. It will total 510 residential units and 107,000 square feet of retail across three buildings, starting with the grocery-anchored “Hartley,” with 320 units and 60,000 square feet of retail.
The developers said they’re gearing up to announce who, exactly, will take up the grocery space. Wiacek estimates it will take up roughly half of the town center’s entire retail footprint.
The Parks team was previously in discussions with Wegmans, only to see the grocer opt for the Fannie Mae headquarters redevelopment instead.
“Once we make the announcement on the anchor, then we’re really gearing up the leasing effort on the other spaces,” Wiacek said. “We’re planning to have a junior anchor and the rest of the retail will be neighborhood serving. We’re hoping to have some chef-driven restaurant concepts, boutique fitness, salon and spa, maybe some shops. It’s meant to be an activated place.”
She added that plans aren’t set in stone for the residential uses, though she expects one town center building will be condos and the other apartments. She said the latter could be converted to a “co-living space,” depending on demand.
In all, the Parks at Walter Reed will offer roughly 1,360 apartments and 550 condos. Davis noted that about 20% (432 units) are designed to be affordable to low-income renters. Of those, 114 will be set aside for renters who make 30% of the area median income, 149 for people making 50% of AMI and 179 for renters at 80% of AMI.
A bit farther down the line, the developers will work to bring office users to the site. Specifically, the group plans to convert the remaining hospital building (which first opened in 1909) into office space, and Wiacek said they’re working with Cushman & Wakefield (NYSE: CWK) to market it and find an anchor tenant. It has about 280,000 square feet available.
In the early going, she said there’s strong interest from life sciences and medical laboratory companies who are looking to locate near Children’s and avoid following their peers to the Maryland suburbs.
“If you look up the 270 corridor, you’ll see there’s a lot of medical research there, but none of it is walkable. None,” Davis said. “It’s really nice to be in a walkable community with a lot of amenities…I think it helps with talent retention, but it’s not smack dab in the [Central Business District] where you’re going to be paying rents that you won’t be able to afford.”
However, Wiacek noted that the building (or at least a portion of it) could become a hotel. The facility has several distinct entrances, so she reasoned the developers could easily split half of it into a “boutique hotel concept.”
The building will require extensive interior renovation (only its exterior is deemed historic, which should speed the process some). That means the building will necessarily be one of the latter sections of the project.
The developers have taken a long view at the site, and said when they acquired it three years ago that work would likely take anywhere from 10 to 15 years. Davis said her team is aiming to have all of the new buildings either completed or under construction by 2025, putting things right on schedule for that timetable.
“Our goal is to do as much as quickly as possible,” Davis said.
