DC Pays $11 Million To Redevelop Gym Into Housing
The city of Washington, D.C., paid $11 million to purchase a former gym with the aim of turning it into housing, potentially for the homeless, public documents show. The deal comes as market apartment rents have increased to near record highs.
Efforts toward the acquisition began in March 2020, when the city put out a request for space for existing buildings and land that could be redeveloped into housing. Of 15 proposals received, the city chose 1339 Green Court NW in downtown Washington, owned by Balance Gym.
The gym, which has three other locations throughout the city, announced on its website it would close its main location on Green Court on July 31. Balance has owned the property since 1996, when it bought it for $900,000, according to CoStar data.
In its online posting, Balance alluded to economic challenges both gyms and city retailers have faced during the COVID-19 pandemic. “Like many other downtown businesses, we’ve struggled to regain our footing over the past two years, and regretfully, we now need to look for alternative locations,” owner Mark Crick wrote.
The former gym is four stories encompassing 24,600 square feet, in keeping with the city’s search for a space between 20,000 square feet and 40,000 square feet, according to a property acquisition funds request submitted by Washington Mayor Muriel Bowser.
The city intends to redevelop the property with the Department of Human Services, which provides services to children, families, and the homeless.
The request for space was part of an ongoing attempt “to identify real estate that can accommodate the increasing demand for housing,” according to Bowser’s proposal. “As real estate becomes increasingly scarce and expensive throughout the District of Columbia, it is financially prudent for the District to acquire real property with improvements that can serve or be developed to serve for such [DHS] use.”
CoStar News reached out to the city for more details but did not immediately hear back.
Apartment demand in Washington hit an all-time high at the end of 2021, according to a CoStar analysis. Meanwhile, multifamily vacancies are on a downward slope, currently at around 5.8%, while rents have grown 7.5% year over year. Average rents sit at a near-record of about $2,000 per unit, CoStar data shows.
In March, Bowser presented a budget for fiscal year 2023 that included $500 million for the Housing Production Trust Fund aimed at financing affordable housing development and preservation.
Though homelessness remains an issue in Washington, the city reported positive news in April when it said the population hit a 17-year low.
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