Washington Business Journal, May 25, 2021
The New York-based developer bought the 294,000-square-foot property at 5300 Wisconsin Ave. NW for $52 million, according to the D.C. Office of Tax and Revenue. Tishman Speyer emerged as the winning buyer due to its ability to close on the acquisition quickly, according to a source familiar with the transaction.
The re-sale marks a reasonably quick turnaround for Annaly Commercial Real Estate Group Inc., which is a subsidiary of publicly traded Annaly Capital Management (NYSE: NLY). The company moved to foreclose on the mall after its former owner, affiliates of New York-based Ashkenazy Acquisition Corp., defaulted on $67.1 million in loans it took out to buy the property in 2017. Annaly then cast the winning bid of $38 million at a foreclosure auction held by Alex Cooper Auctioneers in August 2020.
Tishman Speyer confirmed the acquisition Tuesday and said in a release that “it plans to build new rental housing while retaining substantial retail space and a large parking garage underground.” That’s to say part of the mall, which opened in 1979, will be demolished and part retained to make way for the mix of residential and retail. Bethesda-based Willard Retail has been retained as an adviser on the retail component of the redevelopment.
Michael Majestic, a partner with Willard Retail, said the project will include significant retail, but the precise details are still being worked through. The overhauled Mazza Gallerie will incorporate T.J. Maxx, which took over the former Filene’s Basement space in 2013 and has a longer-term lease, he said. The project is slated to include roughly 350 multifamily units and 26,000 square feet of ground-floor retail, according to EagleBank, which has provided $26 million in financing for the redevelopment.
The shape of the project could be influenced by the results of a recent partnership between the D.C. Office of Planning and Urban Land Institute Washington, which in April released the findings of a technical assistance panel that examined the strengths, weaknesses and potential future of the larger Friendship Heights area.
The property is on the border between D.C. and Bethesda, sits atop a Metro station, and is located along the Wisconsin Avenue retail corridor, all of which made the retail property an attractive redevelopment prospect, the company said. While better known locally for its office properties, Tishman Speyer’s portfolio includes residential developments such as Crossing, an 800-unit residential building in D.C.’s Navy Yard area.
“All over the U.S., Tishman Speyer has been creating mixed-use environments that embrace their surrounding communities, Jeff Chod, regional director at Tishman Speyer, said in a statement. “This project, on a gateway site into the nation’s capital, is consistent with that vision and represents an opportunity to help meet the strong local need for high quality housing, while retaining a retail element that embraces the neighborhood.”
Mazza Gallerie had lost numerous retailers in recent years including anchor Neiman Marcus in 2020, Harriet Kassman, and Williams Sonoma. The AMC Mazza Gallerie 7 permanently shuttered earlier this year, leaving the mall largely empty.
An affiliate of Tishman Speyer has acquired Mazza Gallerie in Friendship Heights and plans to redevelop the retail center as apartments.
The New York-based developer bought the 294,000-square-foot property at 5300 Wisconsin Ave. NW for $52 million, according to the D.C. Office of Tax and Revenue. Tishman Speyer emerged as the winning buyer due to its ability to close on the acquisition quickly, according to a source familiar with the transaction.
The re-sale marks a reasonably quick turnaround for Annaly Commercial Real Estate Group Inc., which is a subsidiary of publicly traded Annaly Capital Management (NYSE: NLY). The company moved to foreclose on the mall after its former owner, affiliates of New York-based Ashkenazy Acquisition Corp., defaulted on $67.1 million in loans it took out to buy the property in 2017. Annaly then cast the winning bid of $38 million at a foreclosure auction held by Alex Cooper Auctioneers in August 2020.
Tishman Speyer confirmed the acquisition Tuesday and said in a release that “it plans to build new rental housing while retaining substantial retail space and a large parking garage underground.” That’s to say part of the mall, which opened in 1979, will be demolished and part retained to make way for the mix of residential and retail. Bethesda-based Willard Retail has been retained as an adviser on the retail component of the redevelopment.
Michael Majestic, a partner with Willard Retail, said the project will include significant retail, but the precise details are still being worked through. The overhauled Mazza Gallerie will incorporate T.J. Maxx, which took over the former Filene’s Basement space in 2013 and has a longer-term lease, he said. The project is slated to include roughly 350 multifamily units and 26,000 square feet of ground-floor retail, according to EagleBank, which has provided $26 million in financing for the redevelopment.
The shape of the project could be influenced by the results of a recent partnership between the D.C. Office of Planning and Urban Land Institute Washington, which in April released the findings of a technical assistance panel that examined the strengths, weaknesses and potential future of the larger Friendship Heights area.
The property is on the border between D.C. and Bethesda, sits atop a Metro station, and is located along the Wisconsin Avenue retail corridor, all of which made the retail property an attractive redevelopment prospect, the company said. While better known locally for its office properties, Tishman Speyer’s portfolio includes residential developments such as Crossing, an 800-unit residential building in D.C.’s Navy Yard area.
“All over the U.S., Tishman Speyer has been creating mixed-use environments that embrace their surrounding communities,” Jeff Chod, regional director at Tishman Speyer, said in a statement. “This project, on a gateway site into the nation’s capital, is consistent with that vision and represents an opportunity to help meet the strong local need for high quality housing, while retaining a retail element that embraces the neighborhood.”
Mazza Gallerie had lost numerous retailers in recent years including anchor Neiman Marcus in 2020, Harriet Kassman, and Williams Sonoma. The AMC Mazza Gallerie 7 permanently shuttered earlier this year, leaving the mall largely empty.
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