Office-to-Resi Conversion Back on Track in Washington, D.C.

Years after the plans for a conversion of the Portals I office building in Washington, D.C., fell apart, the developer of a neighboring property is stepping in to push the project forward.

London-based private equity firm Henderson Park and Los Angeles-based Lowe formed a joint venture to get the residential conversion of 1250-1280 Maryland Avenue SW back in shape, the Washington Business Journal reported. The plan is likely to adhere closely to what Lowe drew up a few years ago for the site.

Lowe proposed a conversion of the 536,000-square-foot office building in 2022. But the developer didn’t actually own the property and was unable to close on an acquisition, leaving the property in the lurch.

Enter Henderson Park. The private equity firm purchased the site last year for $26 million. It’s adjacent to the Salamander Washington, D.C., formerly a Mandarin Oriental before Henderson Park acquired it in 2022 for $129 million and proceeded to rebrand.

Lowe’s conceptual design of the conversion went through the review process when the developer initially proposed the redevelopment. The U.S. Commission of Fine Arts approved the concept to add three floors, a rooftop pool and a new facade; final design approval will be required.

The conversion is expected to add 421 rental units and 69,000 square feet of retail and commercial space to the property. Beyer Blinder Belle Architects & Planners LLP, which designed Lowe’s first pass, will again be the architect of the site.

It’s unclear how much the conversion will cost. The developers hope to begin construction early next year.

Office conversions have been hard to conduct in the nation’s capital, despite the presence of empty buildings, because of the challenging financial market. The district is pitching incentives to aid more conversions.

Lowe is experienced with adaptive reuse projects, recently repositioning D.C.’s Randall Junior High School into a 492-unit complex attached to the Rubell Museum

— Holden Walter-Warner