Estimate Seems High for D.C. School Sale
Reath, Viki, The Washington Times (Washington, DC)
Officials in the District should wait until they have the money in the bank before they start spending big bucks in anticipation of hefty profits from selling off surplus schools, according to some real estate observers.
Fern Barrueta, vice chairman of Carey Winston/Barrueta, doubts that the 210,000-square-foot Stevens Elementary School at 1050 21st St. NW is worth the $21 million school officials estimate it will bring.
Stevens is the most valuable property among 18 schools appraised by Smithy Braedon Oncor International for the D.C. school system's emergency board of trustees, which has proposed closing and selling 15 of the schools. They board is scheduled to make a decision April 9.
Mr. Barrueta said the $21 million estimate works out to $100 a buildable square foot, and that's way too high.
"Today you're not going to get it," Mr. Barrueta said. "If the market continues going the way it's going, I can't see that kind of increase. And whoever buys it would have to tear it down, which lowers the value of the land. Also, if they decide to sell it, the proposal says whoever buys it has to build a school for 250 people, and that's expensive too."
Mr. Barrueta based his response on the most recent comparable deal in the neighborhood, the purchase of 1625 I St. NW by Lawrence Rubin Inc. of New York for $45 a buildable square foot. Rubin bought the property from Kajima and hopes to build a 400,000-square-foot building when it finds tenants, said John Kaylor, Carey Winston's managing senior vice president.
John Akridge, the president of John Akridge Cos., a major D.C. developer, agrees with Mr. Barrueta. He would place the site's value between $45 and $65 a square foot.
"The location is inferior to 20th and K, but not by much," Mr. Akridge said. "If you're going to go public with an estimate, it's always good to err on the high side if you do end up putting it on the market. And land prices will rise."
Smithy Braedon Chairman James L. Eichberg said the company looked at comparable properties and projected that values would increase. He declined to say when Stevens' value would reach $100 a buildable square foot.
"We performed the study in 10 days at no fee at the urgent request of the D.C. public schools to give them a preliminary evaluation of the schools they are considering closing," Mr. Eichberg said. "We made our estimates based on the allowable density under current zoning."
Suzanne Conrad, planning and policy manager for the D.C. school system, said the District got an appraisal of $17 million for Stevens in 1993.
HERALDING A DEAL
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