The Feldman Group of Marcus & Millichap is pleased to present the exclusive offering of 1259 4th Street NE in the Union Market neighborhood of Washington, D.C.
This offering represents an opportunity to acquire a single-tenant net-leased building in the Union Market neighborhood in Washington, D.C. The property is currently 100% leased with minimal landlord responsibilities, as the tenant reimburses or pays directly all taxes, utilities and interior and exterior repairs & maintenance. The building is comprised of two levels totaling 3,600 square feet. The first level is approximately 2,290 gross square feet, while the second level is approximately 1,310 gross square feet. The property is zoned PDR1, one of the more common industrial zones in the District.
1259 4th Street NE is ideal for a buyer with a long term investment strategy. The tenant is currently paying approximately $20 per square foot, while some nearby properties are signing leases for upwards of $60 per square foot for ground floor retail space. Because of the below market rent in place, there is an excellent opportunity to increase the income significantly upon expiration of the lease in November of 2023. Because of the gritty, industrial feel of the buildings that make up Union Market, the neighborhood recently began drawing comparisons to New York City’s Meatpacking District and Chicago’s Fulton-Randolph Market District. Additionally, these small, industrial buildings that make up Union Market cannot be replicated in Washington, D.C. in an economically feasible way, and therefore from a long term perspective will having rental pricing power over other competing submarkets.
As Union Market continues to transition from tenants focused on wholesaling to higher-end retail and restaurants, and the thousands of planned residential units begin to deliver, the neighborhood is poised to position itself as one of the strongest retail destinations in the District. While it is in the early stages of this transition, there is clear evidence that major retailers and restaurateurs are taking notice. Trader Joe’s, renowned chef Stephen Starr’s restaurant St. Anselm, and Oakland, California coffee concept Blue Bottle all opened locations in Union Market in 2018. In addition, bookstore Politics and Prose, well known Japanese restaurant O-Ku and Union Oyster Bar & Lounge also opened their doors last year. Northeast D.C. enjoyed the highest Class A residential rental growth in Washington, D.C. in 2018. Rents grew 8.1% compared to 3.9% for
the District overall. While 2018 was an exciting year for Union Market from a momentum standpoint, the neighborhood seems to be in a great position to enjoy even more explosive growth in 2019 and beyond.
