Hines acquires Archstone's interest in $700 million CityCenterDC project
The mixed-use project is currently under construction in downtown Washington, D.C.
The Washington D.C. office of Hines, the international real estate firm, announced the acquisition of the ownership interest of their partner, Archstone, in the mixed-use CityCenterDC project that is currently under construction in downtown Washington, D.C.
The acquisition of Archstone's interest in CityCenterDC was completed in connection with the acquisition by Equity Residential and AvalonBay Communities of Archstone Enterprises LP.
The Hines | Archstone partnership was chosen by the District of Columbia in 2003 to develop the massive $700 million project on the site of the city's old convention center. In 2011, the partnership secured equity financing from its anchor investor Qatari Diar Real Estate Investment Company, the real estate investment arm of the Qatari Investment Authority, and the financing was put in place by Barwa Bank's investment banking subsidiary, The First Investor (TFI), which is a co-investor and manages the dedicated TFI U.S. Real Estate Fund. Construction began on Phase I of the project in March 2011.
In addition to increasing its incremental ownership in the overall mixed-use project, Hines will assume development responsibility for the two large apartment buildings comprising 458 units in the center of CityCenterDC. The firm's rapidly expanding multifamily residential development business was established in January 2011 and currently has approximately 5,500 units in various stages of development, representing more than $1 billion of construction in 12 U.S. cities.
Hines President Jeff Hines commented, "The project's momentum in office leasing, strong residential condominium sales and widespread interest among retailers and restaurants make CityCenterDC an excellent vehicle for further investment. We have enjoyed working with Archstone and are proud to complete and manage this momentous development for D.C."
Neil Brown, Archstone's chief development officer, added, "Archstone and Hines have worked together hand-in-glove on this project for the last decade, and there is no better outcome for the project than for Hines to assume full oversight of this massive mixed-use development. Additionally, many of the very talented Archstone employees, who have been a part of this project for so many years, are being absorbed into the Hines organization, which will insure a seamless transition and minimize disruption to the project. This has been the most exciting project that I have been involved with in a nearly 30-year career, and it is comforting to know that it will be brought to completion by the extraordinary combination of Hines and its newest employees from Archstone."
Construction on Phase II of CityCenterDC is expected to commence in the first half of 2014. It will consist of a 370-room luxury hotel and an additional 73,000 square feet of retail space.
Hines is a privately owned real estate firm involved in real estate investment, development and property management worldwide. The firm's historical and current portfolio of projects that are underway, completed, acquired and managed includes 1,208 properties representing more than 488 million square feet of office, residential, mixed-use, industrial, hotel, medical and sports facilities, as well as large, master-planned communities and land developments. Currently, Hines manages 379 properties totaling 137 million square feet, which includes 66 million square feet for third parties. With offices in 104 cities in 18 countries, and controlled assets valued at approximately $23.8 billion, Hines is one of the largest real estate organizations in the world. Hines is also a world leader in sustainable real estate strategies, with extensive experience in LEED®, ENERGY STAR®, BREEAM, Haute Qualite Environnementale and DGNB green building rating systems. Visit www.hines.com for more information.