WASHINGTON, DC - UIP (Urban Investment Partners) has closed on Onyx on First, a 266-unit, Class A apartment building located in the Capitol Riverfront neighborhood of Washington, DC for $95.5 million. This is UIP’s largest ever single-asset transaction and its first of 2018.
UIP partnered with Atalaya Capital Management of New York City on the acquisition. Concurrently with the closing, UIP and Atalaya bifurcated the fee and leasehold, selling the fee to Safety, Income & Growth Inc. (NYSE: SAFE), a leading company focused on long-term ground leases, and entering into a 99-year flexible ground lease.
Located two blocks from Washington Nationals Park at 1100 First Street, SE, just steps from the Navy Yard Metro station, Onyx on First was built in 2008 by Faison Development as condominiums, but was converted to rental apartments upon delivery, then sold in 2013.
The former ownership brought the property to market in 2016, with plans to sell in the fourth quarter of that year. Upon being notified of the impending sale, the building’s tenants organized under the District’s Tenant Opportunity to Purchase Act (TOPA). After hearing presentations from interested developers, the tenants assigned their acquisition right to UIP.
Under the new agreement, UIP has committed to installing cell phone repeaters in the building to improve cell phone reception. UIP also will expand and improve the outdoor kitchens on the building’s roof deck, install dog runs, and undertake a variety of other building enhancements.
“UIP was selected because we treat our tenants with respect and recognize their ability to drive the decision of who buys their property,” said UIP Principal Steve Schwat. “Although most TOPA renovations are in older buildings, it is not uncommon for a new building’s residents to explore their TOPA rights. While we have extensive experience with Depression-era buildings in need of major upgrades, we also have supported tenant organizations in newer properties. In fact, many buildings erected in the 1980s are now showing their age, and are in need of these types of improvements.”
Added Pete Bonnell, UIP Principal: “This is a wonderful example of the entire UIP team working with residents and their tenant association to achieve a great result for all of the people living at Onyx on First. We look forward to a successful transition and partnering with fast and flexible partners like Atalaya to work with other tenant associations in the District.”
In addition to its pedestrian-friendly and transit-oriented location, Onyx on First offers its residents a wide array of amenities including a landscaped roof deck and pool, free wi-fi in common areas, state-of-the-art fitness center, picnic area with grills, luxurious courtyard with seating areas, 24-hour concierge, underground parking, and controlled-access entry.
“The acquisition provided the opportunity for Atalaya to partner with an experienced local operator to acquire a high-quality apartment asset in a rapidly growing locale. We are excited to be a part of the Navy Yard’s evolution alongside UIP,” said Young Kwon, Head of Real Estate for Atalaya Capital.
Andy Weiss of Gem Equity structured the placement of the ground lease. Jacob Katz of Meridian Capital represented Capital One and Fannie Mae in placement of the debt.
The UIP family of companies owns and manages more than 2,800 apartments in Washington, DC and Maryland and has renovated, restored, and built more than 25 downtown apartment buildings and condominiums over the last ten years. UIP’s primary focus includes “heavy lift” renovations, adaptive reuse of office properties, and working with tenants in Washington, DC, helping them exercise their TOPA (Tenant Opportunity to Purchase Act) rights. UIP also is active in entitling land, infill development, and acquiring residential assets in the close-in Washington, DC suburbs.
Atalaya Capital Management is a privately held, SEC-registered alternative investment advisory firm. Atalaya focuses on making credit and special situation investments in three principal asset classes: real estate, corporate, and specialty finance. Founded in 2006, Atalaya is headquartered in New York City and has approximately $3 billion in assets under management.