As the Spring semester began in January, three master’s students in Mason’s Real Estate Development program–Gunn Prag, Fei Wang and Paul Apostolakis–took on the challenge of determining the highest and best use development scenario for a 2. 5 acre site located in Washington, DC, immediately adjacent to the Amtrak tracks on the east side and opposite the NoMA/Florida Avenue Metro stop.
The site is owned by Central Armature Works (CAW), a third generation company owned and managed by the Dorr family. The business has been located on this site for more than 25 years. As the NoMA market blossomed and development accelerated, the land upon which the business sits became much more valuable than continuing the business at its current location.
The family decided to contribute the land to a joint venture with a to be determined developer and remain a partner in the overall development in order to participate in the value creation rather than sell the land outright.
The student team was charged with determining the development scenario that would be most appropriate for the site and most financially beneficial to the family. The students were to prepare a full report (linked here) and present its findings to the family, their attorney, Andrew Polott, and to the senior marketing team at HFF, LLP, who has been retained by the family to help market the site to the development community.
The importance of this analysis is that is provides the family and its advisors a baseline of what can be developed on the site, the costs and returns to the family. The report is now being used to aid in the analysis of the various development proposals the family has received.
The students analyzed hotel, office, retail and multi-family uses. Their final recommendation is to develop more than 800 multi-family units in three phases with ground floor retail use for total construction costs in excess of $225 million.
Each week the team met with their instructor, Michael Curran and on occasion with program director Bob Wulff for several hours to track progress, answer questions, and to determine next steps. Additionally, the students met with various professionals including Clark Residential Services, Goulston & Storrs, Eagle Bank, Davis Carter Scott Design, and Studley to gather the necessary market information to perform a complete analysis and reach a well informed and optimal recommendation,
On May 13, the students met with the family, HFF, attorneys and advisors to present their findings and to submit the final report. The report and presentation were met with great praise and appreciation for the students’ very valuable work. The report is now being used as an integral part of the planning and determination of a development partner which is of great value to the client.
Gunn Prag summed up the students’ experience this way:
“This semester gave me a new perspective; it gave me a better understanding of the industry framework with its focus, conventions and players. It also made me aware of where I need to expand my attentiveness and capabilities.”
Michael Curran states:
“The value of this program is that the students get the opportunity to work as true consultants, as a team, in real time on a tangible project with the attendant responsibilities of meeting deadlines, being thorough, managing themselves and each other and holding one another accountable and ultimately to providing the best possible guidance and advice to their clients. It is an invaluable course that combines all they have learned and deploy this knowledge in a meaningful and important way resulting in a whole different level of learning.”
The students’ complete report–Development Analysis of 1200 Third Street NE, Washington DC