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One of the largest apartment complexes in Anacostia is for sale as the owner winds its way through Chapter 11 bankruptcy proceedings.
An entity controlled by Anthony and Helen Pilavas of New York has tapped Marcus & Millichap to market the 672-unit Marbury Plaza complex at 2300-2300 Good Hope Road SE, the subject of significant controversy over its living conditions in recent years. The brokerage is seeking market bids for the development.
The ownership entity filed for Chapter 11 bankruptcy protection in August after a judge held it in contempt in a suit brought by the D.C. Attorney General over conditions at the complex. The court ordered 50% retroactive rent abatement.
The bankruptcy court approved retaining Marcus & Millichap to sell the asset.
“From a business standpoint, it’s a massive multifamily asset, one of the biggest east of the river, and it’s got a lot of history behind it,” Marty Zupancic, senior vice president of investments for Marcus & Millichap, said in an interview. He’s the listing agent on the property, alongside John Slowinski and Brian Hosey.
Marbury Plaza recently underwent $14 million in mechanical and structural renovations, which the brokerage says will reduce immediate costs for prospective investors, though additional costs are expected. The complex, which comprises nine buildings, was completed in 1966 and houses about 2,500 residents.
The District’s Tenant Opportunity to Purchase Act, which gives tenants more control over the purchase and redevelopment of their buildings, does not apply in this case because the property is being offered through the Chapter 11 proceedings, according to court documents.
The Pilavas’ limited liability company bought the 10.18-acre, 1.2 million-square-foot property in 2015 for $55 million and refinanced its loan in 2021.
Years of controversy have plagued the complex, with numerous housing code violations “that left tenants living in deplorable, unsafe conditions including mold, water and sewage leaks, flooding, failing plumbing and electrical systems, insect and rodent infestations, and non-functioning elevators and chairlifts,” according to the D.C. attorney general, which filed a lawsuit in July 2021 against the owners and Vantage Management Inc.
A court order issued in 2022 required the owner to expedite a number of repairs to the building, but the landlord failed to comply with the court order to address these issues and a judge found the owner and manager in civil contempt. The rent abatement ordered in April would return about $5 million in rent to residents.
There are many issues with the building detailed in the OAG reports on the project, and Zupancic said it’s likely to need someone who can invest in an expansive rehabilitation program, working with the tenant’s association and the D.C. government. The property’s assessed value has wavered over the years and stands at $48.2 million for 2024, according to information from the D.C. Office of Tax and Revenue.
“What we’re looking for is a suitor to run tour process and take the property to the next level, put money into it and do what needs to be done to get it out of its precarious situation,” Zupancic said. “That will be better for the tenants and better for the neighbors.”
Read more at the Washington Business Journal.
View Marbury Plaza.
Marcus & Millichap is the nation’s largest brokerage firm focused exclusively on investment sales. It is based on a simple premise: matching each property with the largest pool of pre-qualified investors. With over 2,000 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research, and advisory services. Founded in 1971, the firm closed 8,954 transactions in 2020 with a value of approximately $43 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more about the company, please visit www.MarcusMillichap.com.