Huntington Club Redevelopment RFP

HUNTINGTON CLUB REDEVELOPMENT
ALEXANDRI A, FAI RFAX COUNTY, VI RGI NI A

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HUNTINGTON CLUB REDEVELOPMENT HUNTINGTONAVENUE, FAIRFAXCOUNTY, VA J ULY 07, 2014
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HUNTINGTON CLUB REDEVELOPMENT HUNTINGTON AVENUE, FAIRFAX COUNTY, VA J ULY 07, 2014
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AERIAL VIEW OF MODEL
REQUEST FOR PROPOSALS
A 2. 5 MI LLI ON SF MI XED- USE DEVELOPMENT
OPPORTUNI TY AT THE HUNTI NGTON METRO STATI ON

HUNTI NGTON CL UB REDEVEL OPMENT
JULY 2014

TABLE OF CONTENTS

TAB

1. TRANSMITTAL LETTER
2. MAPS AND PHOTOGRAPHS
3. BID INSTRUCTIONS
4. ASSOCIATIONS MINIMUM REQUIREMENTS AND PREFERENCES
5. PROJECT HISTORY
6. DRAFT MASTER PLAN
7. LIST OF FIRMS ASSISTING THE ASSOCIATION
8. SUMMARY OF REAL ESTATE MARKET FEASIBILITY STUDIES

HUNTINGTON CLUB REDEVELOPMENT RFP 2

JULY 2014

TABLE OF CONTENTS

ADDI TI ONAL MATERI AL S
These materials are available to qualified bidders upon request

A. HUNT I NGT ON C L UB C ONDOMI NI UM DOC UME NT S
Declaration
Bylaws

B . F AI R F AX C OUNT Y C OMP R E HE NS I VE P L AN
Fairfax County Comprehensive Plan Amendment
Dept. of Planning & Zoning Final Staff Report
Informational Meeting Presentation
Comprehensive Plan, Mt. Vernon Planning District
Fairfax County Dept. of Transportation Recommendations

C . S OUT H C OUNT Y AR E A P L ANS R E VI E W ( A P R )
APR Cover Letter
APR Nomination Form
APR Nomination Statement of Justification
Zoning Map Outline

D. R E AL E S T AT E MAR K E T F E A S I B I L I T Y S T UDI E S ( No v e mb e r 2 0 1 3 )
Rental Apartments
Condominiums
Office
Retail
Hotel

E . E NGI NE E R I NG R E P OR T S
Asbestos Report
Subsurface and Geotechnical Engineering Report
Marine Clays Map
Preliminary Site Analysis
Huntington Club Condominium Replacement Reserve Study


JULY 2014

TABLE OF CONTENTS

ADDI TI ONAL MATERI AL S
(continued)

F . S I T E S UR VE Y
Survey Description
Survey Plat
Survey Topo Plat

G. T R AF F I C S T UDI E S
Traffic Study, 2/24/2011
Traffic Study, 2/24/2011, Appendices A-B
Traffic Study, 2/24/2011, Appendices C-V
Traffic Analysis Addendum, 11/9/2011
Traffic Analysis Addendum, 11/9/2011, Appendices A-C
Traffic Analysis Addendum, 11/9/2011, Appendices D-P
Land Use Mix Trip Generation Comparison, 2/22/2012
Traffic Analysis Addendum, 5/31/2012
Traffic Analysis Addendum, 5/31/2012, Appendix A
Traffic Analysis Addendum, 5/31/2012, Appendices B-M

S E C T I O N 1

T R A N S M I T T A L
L E T T E R

500 MONTGOMERY STREET, SUI TE. 600 | ALEXANDRI A, VA 22314
P: 703. 836. 5700 | WWW. DELTAASSOCI ATES. COM

August 1, 2014

Re: Huntington Club Redevelopment
An Approved 2.5-Million-Square-Foot Mixed-Use Development Opportunity
At the Huntington Metrorail Station

Huntington Club, A Condominium Unit Owners Association, Inc. (the Association) has retained Delta
Associates (Delta) to solicit bids from interested parties to purchase and develop a mixed-use development on
the Associations 19-acre property, the site of the existing condominium, and an adjacent undeveloped 0.5-acre
parcel that is owned by a third party (collectively, the Property).

This is a significant opportunity in a growing urban setting in the Washington area among the leading
economies in the U.S. Among the advantages of this site and development are its:

Location adjacent to Metrorail
Easy access to the Capital Beltway and Fort Belvoir
Convenient transit and road connections to major employment centers in Northern Virginia, in
downtown Washington, and throughout the metropolitan area
Proximity to Old Town Alexandria, National Harbor, and the Carlyle area, home of the U.S. Patent &
Trademark office and the new National Science Foundation headquarters
Upgraded highway infrastructure and interchanges nearby
Negotiation with one party the Associations Board of Directors
Proven prior approval by the unit owners
Extensive entitlement, site planning, design, traffic, and market feasibility work already completed
Full support of the Association for rezoning
Possibility of phased land purchase
Current unit owners as potential pre-sale buyers for new condominium units

P R O P E R T Y O V E R V I E W

The Property is a roughly triangular 19.5-acre tract located on the south side of the 2500 block of Huntington
Avenue in the Huntington area of Fairfax County, Virginia consisting of approximately 19.0 acres currently
included in a residential condominium and an undeveloped 0.5 acre owned by a third party. The two properties
are being co-marketed by the Association as a single parcel and must be purchased together. The site is
bounded on the north by Huntington Avenue, on the east by the Huntington Metrorail Station, on the south by
North Kings Highway, and on the west by single-family homes on the east side of Kathryn Street.

Currently, the site is improved with a residential condominium community known as Huntington Club, which
consists of 364 garden and townhouse style units in ten buildings, with additional common area buildings,
Huntington Club Redevelopment
Request for Proposals
August 1, 2014
Page 2

amenities, and parking. The property was developed in the late 1960s as Telegraph Hill Apartments, which was
converted to condominium ownership in 1979.

In 2009, the Association and the adjacent landowner submitted nominations to amend the Fairfax County
Comprehensive Plan to allow a transit-oriented, mixed-use redevelopment project. In February of 2013, the
Fairfax County Board of Supervisors approved a Comprehensive Plan amendment that would make possible the
redevelopment of the subject site at up to 3.0 FAR with up to 2.55 million SF of space, consisting of 75%
residential use, or 1,911,000 SF, and 25% office use, or 637,000 SF. Approximately 127,000 square feet of office
use may be converted to hotel use, leaving 510,000 SF of office space, and an unspecified amount of first floor
retail may be included in either residential or office buildings. Recent discussions with Fairfax County indicate
that some modifications may be granted that could improve the redevelopment.

The developer will benefit from the sites status as part of a Transit Development Area surrounding the
Huntington Metrorail Station on the Yellow Line, which opened in 1983. The area has attracted significant new
investment, with several new residential and commercial projects completed and in progress.

A S S O C I A T I O N P R O C E S S A N D R E Q U I R E ME N T S

The Association recognized the redevelopment opportunity that the site represents and has invested substantial
effort and capital over the last five years in obtaining development approvals, commissioning development-
related studies, and securing the agreement of unit owners with regard to the sale and development process.
This body of work will save a developer significant due diligence time and cost when considering this
opportunity.

A sale would require agreement of unit owners who collectively own 80% of the fractional interest in the
Association. Bidders should be aware that two prior votes on related matters (including the 2009
Comprehensive Plan amendment petition of support and the 2013 vote to approve expenditures for the RFP
process) have indicated more than 80% support of the entire Association. Approval of a bidders offer will
require an additional vote by Association members, which cannot be guaranteed. Many current unit owners
have expressed interest in living in the new development and thus represent a pool of ready buyers for new
condominium units a valuable asset for the developer.

I N F O R MA T I O N P A C K A G E

The Association has instructed Delta to approach parties likely to have an interest in this type of property. The
enclosed package contains physical, legal, market, economic, and other information on the site to assist
interested parties with their feasibility studies and to enable them to bid on the property.

Delta Associates has completed market feasibility studies for rental apartments, condominiums, office, retail,
and hotel uses at the site. This package contains summaries of these market studies; complete reports will be
provided to qualified bidders upon request.
August 1, 2014
Page 3


Davis Carter Scott (DCS) has completed significant design work for the Property, taking into consideration the
Comprehensive Plan, discussions with Fairfax County planners, the sites topographical and physical conditions,
and the results of the Delta market feasibility studies. This design work is a valuable resource for bidders
because it shows the sites development potential in practical, and not merely conceptual, terms. A summary of
DCSs draft master plan work is included in Tab 6. It is important to note that the draft master plan is not the
required development program. However, given the entitlement process thus far and the extensive design
feasibility work undertaken, it is the Associations belief that achieving the full development potential of 3.0 FAR
would be unlikely with radical changes to the DCS plan. Still, bidders are encouraged to prepare proposals that
they consider feasible from the perspectives of market, design, economics, financing, or other considerations.

A list of firms assisting the Association is shown in Tab 7, including land planners, architects, engineers, and
attorneys. Please feel free to call upon any of these experts if you have questions during this preliminary
feasibility period. Questions from individual bidders and the answers provided will be distributed to all qualified
bidders as appropriate. Also, any changes in the bid process (for example, as a result of questions) will be
offered to all bidders.

B I D P R O C E S S

Relevant study period information is contained in this package so that bidders will have sufficient time to
analyze this information and submit a Bid Form (Tab 3) by the Bid Due Date. Tab 3 also presents a list of
selection criteria. It is the Associations intent to select finalists within three months of the Bid Due Date,
followed by a contract negotiation, best and final offer, and ratification by unit owners. Before selection,
bidders may be asked to meet the Association and/or its advisors to discuss their bids and present qualifications.
The Association is committed to making this bidding process as fair and straightforward as possible.

The bid process and the enclosed package are intended to allow you adequate time and information to study
the property and submit a bid, as well as to reassure you that you will be purchasing a property that is well along
in the entitlement process and that will have the Associations full support during the development process.

D I S C L A I M E R

The seller has not engaged a real estate broker in connection with this offering and will not be responsible for
compensating a broker.

August 1, 2014
Page 4

A N O T E A B O U T D E L T A A S S O C I A T E S R O L E

Delta is assisting the Association strictly on a professional services fee basis, and we will not receive a commission
or other consideration dependent on a transaction or on the amount of a transaction. Although Delta works
frequently with developers (including some who may bid on this project), Deltas work is strictly for the
Associations benefit.

We at Delta Associates look forward to working with you on this exciting project and stand ready, along with the
other advisors, to assist you in any way possible.

Respectfully submitted,

DELTA ASSOCIATES

Enclosure


S E C T I O N 2

M A P S A N D
P H O T O G R A P H S

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S E C T I O N 3

B I D I N S T R U C T I O N S

BI D I NSTRUCTI ONS

A. T I ME L I NE

S T E P A P P R OX I MAT E T I MI NG
Proposal due date 2 months
Selection of finalists 3 months
Negotiation, best and final offer 2 months
Ratification by unit owners 4 months
Contingency on the above 1 month
TOTAL 12 months

B . I NT E NT T O B I D

Please complete this form and deliver it by 5:00 PM on September 24, 2014 (the Bid Due Date) to:

Delta Associates
500 Montgomery Street, Suite 600
Alexandria, VA 22314
Attention: David Weisel
David.Weisel@DeltaAssociates.com
Telephone: 703-535-3551
Fax: 703-836-5765

C . NON- B I NDI NG B I DS

By completing and submitting this form, the bidder has no legal contractual obligation to
purchase the Property and Huntington Club, A Condominium Unit Owners Association, Inc. (the
Association) has no legal contractual obligation to accept the bid or any modification of the
bid. Nevertheless, the submission of this form signifies that the undersigned entity in good faith
is willing, if selected, to enter into a sixty-day period to negotiate a purchase agreement. If
selected as a qualified bidder, the contact person for the undersigned entity will be notified by
approximately three months after bids are due. If not selected, or if selected as a backup
qualified bidder, you will be notified by approximately three months after bids are due. Only
upon execution of a purchase agreement shall the parties have legally binding obligations.

D. S T R UC T UR E

The Association will consider an all-cash transaction, as well as other types of transactions,
including phased payments at specified times, joint ventures, or other structures. Proposed
transaction structures should meet the Associations requirements, maximize the cash price to the
Association, and address the Associations preferences, as described in the RFP package. Proposal
other than all-cash transactions must reflect a higher purchase price to compensate for risk.

BI D I NSTRUCTI ONS

E . S E L E C T I ON C R I T E R I A

Qualified bidders will be selected based on the following criteria:

1) Conformance with Association requirements and ability to meet Association preferences
(Tab 4)
2) Price (total consideration and cash equivalent price)
3) Financial capability
4) Successful completion of similar developments
5) Special conditions required, if any

F . B I D I NF OR MAT I ON

1) Name of bidding entity
2) If a venture, names of participating entities
3) Names and biographies/experience of principals
4) Description of financial capability (e.g., available equity and proven access to capital)
5) Description of development capability (e.g., examples of projects)
6) Other information on bidding entity (e.g., principals and their experience)
7) If other than an all-cash offer, a risk assessment and mitigation plan for Association
members
8) Price and payment schedule
9) Deposit and at-risk funds, if any
10) Detailed description of terms, conditions, and contingencies, if any

Please attach additional information or materials as desired.

G. F OR MAT

Electronic submissions are encouraged, but printed materials will be accepted.

H. DI S C L A I ME R

The information in this Request for Proposal Package has been obtained from sources believed
to be reliable. However, notwithstanding anything to the contrary, the Association and Delta
(and their officers, employees, agents and representatives) make no, and hereby expressly
disclaim any, representations, warranties, or other assurances as to the accuracy or
completeness of the information provided. Each prospective Bidder should undertake such due
diligence investigations concerning the property and the information contained herein as it
considers necessary or desirable independently to verify, among other things, such information
and to determine whether to submit a bid.

In addition, no person, including Delta, is authorized to make any representations or warranties,
to agree to sell the property, or to agree to any terms and conditions with respect to a sale,
ground lease, joint venture, or any other transaction, and the Association will not be bound by
any such terms and conditions.
BI D I NSTRUCTI ONS

UNDE R S T OOD AND AGR E E D:

Name of entity:

Name/title of authorized
representative:

Signature:

Date:

Address:

Email:

Telephone:

Fax:


S E C T I O N 4

A S S O C I A T I O N S M I N I M U M
R E Q U I R E M E N T S
A N D P R E F E R E N C E S

ASSOCI ATI ON S MI NI MUM REQUI REMENTS AND PREFERENCES

MI NI MUM R E QUI R E ME NT S :

The developer purchases the entire Property for redevelopment at once or in phases
The developer funds and manages the rezoning process with the support of the Association
At least one of the buildings built in construction Phase 1 is a new residential condominium suitable for
acquisition in whole or in part by current unit owners
Each unit owner has the option to reinvest his/her net sale proceeds into a new condominium unit on the
property
If rezoning increases unit owners' real estate taxes prior to sale, then a subsidy from the developer will be
necessary

MI NI MUM R E QUI R E ME NT S I F T HE L AND I S T R ANS F E R R E D I N P HA S E S :

Land transfers and associated payments occur on fixed dates
New condominium buildings include (at a minimum) enough new units for unit owners who want to
remain onsite before the last old buildings are vacated
Unit owners who buy new units on the property, except those displaced in the first phase of construction,
can live in their existing units with adequate parking until their new units are ready for occupancy
Residential and construction areas of the property are segregated and separately managed to the extent
possible
The developer assists unit owners to find alternative housing and financing as needed
The interests of the Association and unit owners are protected to the fullest extent possible if the
developer does not complete the purchase of the entire property
The developer funds modifications to infrastructure as needed to enable redevelopment
The Association's engineer, attorneys, and other advisors retain access to the site and to design
documents to assure compliance with the terms of the agreement (if appropriate to the transaction
structure)

ASSOCI ATI ON S MI NI MUM REQUI REMENTS AND PREFERENCES

P R E F E R R E D F E AT UR E S OF A NE W C ONDOMI NI UM T O B E P UR C HA S E D/ OC C UP I E D
I N WHOL E OR I N P AR T B Y C UR R E NT HUNT I NGT ON C L UB UNI T OWNE R S

In general, the Association wants any new residential condominium buildings developed as part of the project to
have construction quality, in-unit features and finishes, energy efficiency, and common area amenities
consistent with the best standards in the marketplace. Proposals should include, at a minimum, examples of
similar projects that represent the bidders vision for the subject site. Bidders should keep in mind that current
unit owners represent a pool of ready buyers for condominium units in the new development. The existing
owners would like to structure their purchase on a tax-free basis and at a discounted pre-construction price.
Here are examples of characteristics in which current unit owners have expressed interest:

Unit floor area and bedroom/den count equivalent to current units
Equivalent or better parking ratio than current condition (1.5) in a condominium building
Sound-proofing / noise abatement features
Common area amenities:
Individual storage areas
Community room / multipurpose room
Management office
Gym/fitness facility
Weather-protected access to Metro
Exterior common areas: rooftop deck, barbecue/picnic area, garden area
Swimming pool
Bicycle racks
Motorcycle parking
Car wash area


S E C T I O N 5

P R O J E C T H I S T O R Y

PROJECT HI STORY

By 2005, successful transit-oriented redevelopment projects were common in Alexandria and
throughout the Washington DC area. The Huntington Club Board of Directors recognized the potential of
its 19-acre condominium property, which is located adjacent to the Huntington Metro Station, and it
chartered a Redevelopment Committee to explore the Associations alternatives. The committee
organized in 2006, did some preliminary research, and surveyed unit owners to gauge interest in
redevelopment. A very positive response by early 2007 motivated the committee to continue, with 64%
of unit owners in favor, 13% undecided, and 7% against (16% did not respond).

Fairfax County Supervisor Gerry Hylands staff noted that a Comprehensive Plan amendment was
needed to redevelop the Property, and the next opportunity was the 2009 South County Area Plans
Review (APR). In April of 2009, Huntington Club unit owners approved a budget for the APR process with
70% in favor and 3% against (27% did not cast ballots). Huntington Club selected Walsh Colucci, Wells &
Associates, Davis Carter Scott, and VIKA to support the process. The Comprehensive Plan amendment
was submitted in September of 2009 with a petition of support signed by 84% of unit owners.

A preliminary staff report and APR Task Force review in April of 2010 led to a lengthy traffic study, which
ultimately included two addenda. Meanwhile, VIKA provided a preliminary engineering site assessment
and property survey with detailed topography. Huntington Club undertook extensive community
outreach during this period and is grateful for the support of nearby citizens associations. Final
approvals of the Comprehensive Plan amendment by the Department of Planning & Zoning, Mount
Vernon Council, Planning Commission, and Board of Supervisors concluded in February of 2013.

Unit owners voted in May of 2013 to fund this request for proposals (RFP) with 82% in favor and 4%
against (14% did not cast ballots). Reed Smith and Delta Associates added their specialized expertise to
Huntington Clubs team later that year. Delta completed a detailed market analysis of the proposed land
uses, and Davis Carter Scott provided a more detailed design concept that fully utilizes the approved 3.0
FAR within the limitations imposed by the Comprehensive Plan. Davis Carter Scott, Walsh Colucci, Wells
& Associates, and VIKA are available to support the subsequent rezoning, which will be funded and
managed by the selected developer, leveraging the substantial investments that Huntington Club has
made since 2009.

Huntington Club is an unusual example of a highly organized homeowners association that has
completed substantial entitlement, economic, design, traffic, and engineering work for a large project
independently of a developer. This commitment over a number of years and the features of the subject
site establish Huntington Club as one of the most remarkable development opportunities on the DC area
market at this time.


S E C T I O N 6

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Architecture
Interior Architecture
Land Planning

1676 International Drive
Suite 500
McLean, Virginia 22102
P 703.556.9275
F 703.821.6976
www.dcsdesign.com

Design Criteria 070314 (last page of Sec 7 Draft Master Plan) final 07-31-14.doc

DESIGN CRITERIA FOR HUNTINGTON CLUB REDEVELOPMENT

1. In approving the land use, Fairfax County imposed the following:
a. 55 height limited above Kings Highway from the south R.O.W.
grades.
b. 55 height limit from the west property line grades.
c. 200 height limit within the arc of the central road (see attached site
plan diagram).

2. One entrance / exit on Huntington Avenue aligned with the new
development entrance on the north side of the avenue. One entrance / exit
on Kings Highway as shown.

3. Preliminary review and consent from the fire marshals office for the 8%
internal road grades, with the pull off provisions as shown on the site plan for
fire truck access. Preliminary review and consent from fire marshals office
that fire access is acceptable as shown. (See VIKA report).

4. The design, as shown, achieves a 3.0 FAR density and includes the acre
parcel to the east (WSD Huntington, LLC property) for both density
calculations and design.

5. For market affordability, Buildings A & B are wood frame (at developers
option).

S E C T I O N 7

L I S T O F F I R M S A S S I S T I N G
T H E A S S O C I A T I O N

LI ST OF FI RMS ASSI STI NG THE ASSOCI ATI ON

DE L T A A S S OC I AT E S

David Weisel
500 Montgomery Street, Suite 600
703.535.3551 Office
703.836.5765 Fax
301.332.4107 Cell
David.Weisel@DeltaAssociates.com

R E E D S MI T H L L P

Robert M. Diamond
3110 Fairview Park Dr., Suite 1400
Falls Church, VA 22042-4536
703.641.4273 Office
703.641.4340 Fax
703.585.0411 Cell
rdiamond@reedsmith.com

DA VI S C A R T E R S C OT T L T D

Doug Carter, AIA, NCARB
1676 International Dr., Suite 500
McLean, VA 22102
703.556.9275 Office
dcarter@dcsdesign.com

V I K A VI R GI NI A L L C

Bob Cochran
8180 Greensboro Dr., Suite 200
McLean, VA 22102
703.442.7800 Office
703.761.2787 Fax
cochran@vika.com

WAL S H C OL UC C I

G. Evan Pritchard
2200 Clarendon Boulevard, Suite 1300
Arlington, VA 22201
703.528.4700, Ext. 5417 Phone
703.525.3197 Fax
gepritchard@thelandlawyers.com

WE L L S & A S S OC I AT E S , L L C

Michael J. Workosky
1420 Spring Hill Rd, Suite 600
McLean, VA 22102
703.917.6620 Phone
mjworkosky@mjwells.com


S E C T I O N 8

S U M M A R Y O F
R E A L E S T A T E M A R K E T
F E A S I B I L I T Y S T U D I E S

500 MONTGOMERY STREET, SUI TE 600 | ALEXANDRI A, VA 22314
VOLUME I

SUMMARY OF MARKET STUDI ES AND DEVELOPMENT
PROGRAM RECOMMENDATI ONS
HUNTINGTON CLUB
CONDOMINIUM REDEVELOPMENT
A PLANNED MIXED-USE PROJECT

ALEXANDRI A, FAI RFAX COUNTY, VI RGI NI A

December 6, 2013
P R E P AR E D B Y DE L T A A S S OC I AT E S F OR :

HUNTINGTON CLUB,
A Condomi ni um Uni t Owners Associ ati on, I nc.
Attenti on: Dr. Rossman P. I rwi n, I I I , Presi dent
2601 I ndi an Dri ve
Al exandri a, VA 22303

#13294


T A B L E O F C O N T E N T S
P AGE

Letter of Findings .................................................................................................................................. 1



December 6, 2013

Huntington Club, A Condominium Unit Owners Association, Inc.
Attention: Dr. Rossman P. Irwin, III, President
2601 Indian Drive

RE: Summary of Market Studies and Development Program Recommendations
Proposed Mixed-Use Redevelopment of Huntington Club Condominium
Alexandria, Fairfax County, Virginia
Deltas Project #13294

Dear Dr. Irwin:

This letter presents the results of a market study undertaken in connection with the project referenced above.
Pursuant to our contract dated September 24, 2013, the primary purpose of this study is to assist you with
internal planning with regard to the residential, retail, office and hotel components of a proposed mixed-use
development at the subject site. Our reports are organized as follows:

Volume I: Summary
Volume II: Apartments
Volume III: Condominiums
Volume IV: Office
Volume V: Retail
Volume VI: Hotel

The primary tasks involved in assessing the proposed project were as follows:

Prepare an analysis of the regional economy.
Prepare an overview of market conditions for each use: apartment, condominium, office, retail, and hotel.
Evaluate the subject site as a place from which to compete for each use.
Survey competitive/comparable properties.
Assess supply and demand conditions in the market area.
Recommend a development program for each use.
Estimate achievable rents/prices and absorption pace for each use.

Research for this study was conducted in October and November 2013 and the analysis and findings reflect market
conditions as of that period. This volume presents a summary of findings from the reports for the individual
property types. Please see the individual volumes for details.
Huntington Club Condominium
December 6, 2013
Page 2

T H E S U B J E C T S I T E

The subject site is a roughly triangular 19-acre tract located on the south side of the 2500 block of Huntington
Avenue in the Huntington area of Fairfax County, Virginia. The site is bounded on the north by Huntington
Avenue, on the east by the Huntington Metro Station, on the south by Kings Highway, and on the west by single-
family homes on the east side of Kathryn Street. It has access/curb cuts on both Huntington Avenue and Kings
Highway.

The site is improved with a residential condominium community known as Huntington Club, which consists of
364 garden and townhouse style units in ten buildings. The property was developed in the late 1960s as
Telegraph Hill Apartments, which was converted to condominium ownership in 1979.

In 2009, the Huntington Club Condominium Unit Owners Association submitted a nomination to amend the
Fairfax County Comprehensive Plan to allow a transit-oriented, mixed-use redevelopment project. In February
2013, the Fairfax County Board of Supervisors approved a Comprehensive Plan Amendment which would make
possible the redevelopment of the subject site with up to 2.5 million square feet (SF) of space, consisting of 75%
residential use, or 1,875,000 SF, and 25% office use, or 625,000 SF. Approximately 125,000 square feet of office
use may be converted to hotel use, leaving 500,000 SF of office space, and an unspecified amount of first floor
space of any type may be converted to retail use. The maps that follow this letter show the subject sites location
in detail.

We have assumed that the retail space at the subject will be delivered in 5,000 to 10,000 SF blocks as the office
and residential buildings are completed over time. The analysis in this report is based on a total of 50,000 SF to
55,000 SF of retail at full build out.

We have analyzed the subject as if the proposed mixed-use redevelopment project is complete, with a rich and
varied complement of office, residential, retail, and hotel uses with convenient parking and access. Our
conclusions about the subjects performance assume that these conditions are in place.

S I T E E V A L U A T I O N

The subject site lies within Fairfax County, but this part of the county has an Alexandria postal address. The
area, often considered to be a part of Alexandria, includes several established residential neighborhoods
including Huntington, Burgundy Village, Jefferson Manor, Fair Haven, and Belle Haven. Richmond Highway (U.S.
Route 1), Telegraph Road, and Kings Highway are the main north-south roads in the area, which has a mix of
single-family and townhome residences and garden and high-rise apartment and condo buildings, with highway
retail and commercial uses concentrated along Richmond Highway. The largest commercial developments in
the immediate Huntington area include Huntwood Plaza, a 103,000 SF office building on Richmond Highway that
was built in 1986, and a 213-room Hampton Inn hotel, which is located next to Huntwood Plaza.

December 6, 2013
Page 3

The subject enjoys a good location near the Capital Beltway and two established office submarkets the
I-395/I-95 Corridor and Old Town Alexandria.
The I-395/I-95 Corridor office submarket spans the Northern Virginia interstate highways, from the
Eisenhower Corridor on the north to Woodbridge on the south. The submarket is convenient to
Downtown Washington and the Pentagon. Proximity to the Pentagon has been a major factor in the
development of this 19.8 million-square-foot office market as numerous government agencies
including the Department of Defense and government contractors are located there. Access to I-
395/95, the Capital Beltway, and local roads is excellent, which supports the 28.6 million square feet of
flex/industrial space located there.
Old Town Alexandria is tucked into a corner next to the Potomac River and the Capital Beltway. This 8.4
million-square-foot submarket traditionally has been known for its historic buildings, quiet
neighborhoods, boutique shops, and quaint restaurants. The Metro station openings at King Street and
Braddock Road in 1983 encouraged commercial development near the two stations, while re-
development along the waterfront, north of the historic district, proceeded simultaneously. Most of Old
Towns office space was built between 1982 and 1993. These modern office buildings complement the
townhouse-type commercial buildings that are the core of Old Towns personality. In addition to quick
and easy access to I-95, the Capital Beltway, the George Washington Parkway, and two Metro stations,
Old Town is less than two miles south of National Airport and four miles from downtown Washington.
Old Towns convenience, appeal, and quality of life have attracted a variety of companies, particularly
associations and non-profits. In fact, Alexandria is the nations fourth-largest center for trade and
professional associations, surpassed only by the District of Columbia, New York, and Chicago.

The subject enjoys excellent local and regional access. The subject is located just east of the intersection of
Huntington Avenue and Telegraph Road and southeast of the major highway intersection of Telegraph Road and
Interstate 495. Direct vehicular access to the subject is by both Huntington Avenue and Kings Highway, which
provide access to the Capital Beltway/I-495, I-395, I-95, and I-66, thus connecting the subject to the rest of
Northern Virginia and the Washington metropolitan area. These road connections place the subject within a 20-
minute drive or less of downtown Washington, Tysons Corner, the Pentagon, Crystal City, Washington Reagan
National Airport, and Alexandrias Old Town historic district. In addition, the Huntington Metro station on the
Yellow Line is immediately adjacent to the subject. The Huntington Metro Station is also served by 11 bus
routes, including both Metro buses and Fairfax Connector buses. The subjects transit connections provide
convenient access to the District of Columbia and Metro-served suburbs in Virginia and Maryland as well as
Northern Virginias outer suburbs, such as Prince William, Stafford, and Spotsylvania Counties.

The subject is close to a variety of support services and retail destinations. The subject is about two miles
north of Beacon Center, which is on Richmond Highway at Southgate Drive, and 1.5 miles south of Alexandria
Commons Shopping Center, which is at the corner of Duke Street and Yale Drive.
Beacon Center is a 328,000 SF community shopping center anchored by Lowe's, Giant Food, Marshalls,
Office Depot, and HomeGoods. This property, owned by Saul Centers, was built in 1973 and underwent
a major renovation in 1993. It is currently 100% leased.
Alexandria Commons Shopping Center is a 203,000 SF neighborhood shopping center that was built in
1990 and is anchored by Giant Food and Staples. This center is currently 92% leased.

December 6, 2013
Page 4

Other nearby retail locations include Kings Crossing, a 149,000 SF neighborhood shopping center located at 6303
Richmond Highway for which Walmart is the primary tenant, and the many upscale boutiques, shops, and
restaurants in Old Town Alexandrias shopping and entertainment district are about two miles to the northeast.
Significant multifamily projects that were recently delivered in or near the Huntington area include:
The Courts at Huntington Station, a 416-unit mid-rise rental apartment project, is located adjacent to
the entrance to the Huntington Metro Station on Kings Highway just south of the subject. Home
Properties built this project in two phases, which were completed in 2010 and 2011. Currently 94%
occupied, this project has an average effective rent of $2,053 per month, or $2.07 per SF.
The Beacon of Groveton is a 290-unit mid-rise rental apartment located at 6870 Richmond Highway,
which was developed by Redbrick Development in conjunction with Wood Partners and CBRE Investors.
This project was completed in 2012, and it is currently 68% leased. Effective rents average $1,765 per
month, or $2.10 per SF.
Midtown Alexandria Station is a 368-unit high-rise condo project located at 2451 Midtown Avenue,
which is on the north side of Huntington Avenue just to the northeast of the subject. Developed by KSI,
this project began sales in 2005 and construction was finished in 2007.

The subject is convenient to major employment concentrations. The subject is centrally located in the near
suburbs and is convenient to Old Town Alexandria, Crystal City, the Rosslyn/Ballston Corridor, Fort Belvoir, and
other Northern Virginia employment centers as well as downtown Washington. Hoffman Town Center and
Carlyle are the largest employment centers in the subjects immediate vicinity.
Hoffman Town Center is a mixed-use urban center adjacent to the Eisenhower Avenue Metro Station,
which is on the Yellow Line one stop north of the Huntington Metro Station. Hoffman Town Center is
planned for more than seven million SF of space, including 3.5 million SF of office space in 10 buildings,
1.5 million SF of residential in four buildings, two full-service hotels, 200,000 SF of retail, and a 22-screen
movie theater. Today, there are four office buildings with about 1.3 million SF of space, in addition to
the movie theater, a hotel, and 95,000 SF of retail. The primary office tenant is the U.S. Department of
Defense, which occupies a 607,000 SF building. With one building vacated and under renovation and
another having sat vacant for several years, the occupancy rate is currently low, but the National Science
Foundation recently announced plans to move into a new 661,000 SF building in Hoffman Town Center
in 2017, which should attract contractors and other tenants that do business with the NSF.
Carlyle is a 77-acre mixed-use development just east of Hoffman Town Center and south of the King
Street Metro Station in the southwest section of Old Town Alexandria. It lies partly in the Old Town
Alexandria submarket and partly in the Eisenhower Avenue submarket. Carlyle has some 5.1 million SF
of office space in 25 buildings, plus high-rise residential buildings, hotels, and retail space. Carlyles
largest office users include the U.S. Patent & Trademark Office, which occupies 2.5 million SF of space,
and the Albert V. Bryan U.S. Courthouse.

Overall the subject site has good potential to compete. The subject enjoys a good location in an established
submarket just outside the Capital Beltway. Local and regional access to the site is excellent, particularly with a
Metrorail station adjacent, and it is easily accessible to major employment concentrations. The variety of onsite
and offsite retail, dining and entertainment, employment, and other support services will make it an attractive
place to live, work, and shop.

December 6, 2013
Page 5

S U M M A R Y O F K E Y F I N D I N G S A N D R E C O M M E N D A T I O N S

We evaluated market potential for the proposed mixed-use project at the subject site. For the residential
component, we evaluated market potential based on prototypical low-rise
1
and high-rise
2
rental apartment
buildings and prototypical mid-rise
3
and high-rise
4
condominium buildings. (Note that this study addresses
market-rate units only; affordable units are not part of the scope of work.) For the office use, we evaluated the
market potential for the amount of space permitted by the Fairfax County Comprehensive Plan Amendment,
after converting part of the maximum allowed office space to hotel and retail uses.
5
For the retail component,
we evaluated market potential and recommended a tenant mix plan for the estimated amount of space that
could be accommodated on the ground floor of office and residential buildings that will face Huntington Avenue
and Kings Highway. For the hotel, we recommended the optimum configuration for the market in which the
subject will compete.

Figure 1 presents a summary of the recommended development program. Our findings and recommendations
for each product type are presented in the sections that follow.

F I G U R E 1
R E C OMME ND E D D E V E L OP ME NT P R OGR A M S UMMA R Y

REPORT
VOLUME PRODUCT TYPE
PROTOTYPE SCALE
(UNITS/SF/ROOMS)
AVERAGE
UNIT
SIZE (SF)
II Low-rise Apartments 250 units * 862
II High-rise Apartments 300 units * 885
III Mid-rise Condominiums 75 units * 1,081
III High-rise 150 units * 942
IV Office 269,000 SF ** --
V Retail Space 50,000 SF --
VI Select Service Hotel 120 rooms --

* The number of units represents the prototypical building size for each residential product type,
and it includes market-rate units only. This is not necessarily the maximum development
allowed or feasible.
** The prototype office building has 269,000 SF of office space and 10,000 SF of ground floor
retail space, for a total of 279,000 SF.

1
Defined as wood-frame construction with four to five floors of residential and structured parking.
2
Defined as concrete construction with nine or more floors of residential and structured parking.
3
Defined as wood-frame construction with five floors of residential and structured parking.
4
Defined as a concrete building with ten stories of residential and structured parking.
5
The Comprehensive Plan Amendment allows up to 625,000 SF of office use, and up to 125,000 SF of the office space can
be converted to hotel use. Based on the recommended 120-room, 67,000 SF hotel, there will be 558,000 SF remaining for
office use, which we assume will be built in two 279,000 SF buildings, each of which will have 10,000 SF of ground floor
retail space, leaving a total of 538,000 SF of office space at the subject.
December 6, 2013
Page 6

Apartments

Our recommended unit mix and unit sizes for apartments at the subject, as well as our estimated effective
rents in todays dollars, are shown in Figures 2 and 3 below.

F I G U R E 2
L OW- R I S E P R OT OT Y P E A P A R T ME NT B UI L D I NG
R E C OMME ND E D UNI T MI X , UNI T S I Z E S , A ND R E NT S
A S OF DE C E MB E R 2 0 1 3

UNIT MIX UNIT EFFECTIVE RENT
UNIT TYPE # % SIZE (SF) PER UNIT PER SF
Efficiency 25 10.0% 575 $1,575 $2.74
1BR/1B 96 38.4% 775 $1,695 $2.19
1BR/1B/Den 24 9.6% 875 $1,895 $2.17
2BR/2B 100 40.0% 1,000 $2,125 $2.13
2BR/2B/Den 5 2.0% 1,125 $2,275 $2.02
Total/Average: 250 100.0% 862 $1,886 $2.19
Overall Average Including Premiums and Parking: $2,017 $2.34

* Market-rate units only.

F I G U R E 3
HI GH - R I S E P R OT OT Y P E A P A R T ME NT B UI L DI NG
DE L T A S R E C OMME NDE D UNI T MI X , UNI T S I Z E S , A ND R E NT S

UNIT MIX UNIT EFFECTIVE RENT
UNIT TYPE # % SIZE (SF) PER UNIT PER SF
Efficiency 45 15.0% 550 $1,815 $3.30
1BR/1B 105 35.0% 750 $2,025 $2.70
1BR/1B/Den 55 18.3% 900 $2,125 $2.36
2BR/2B 87 29.0% 1,175 $2,650 $2.26
2BR/2B/Den 8 2.7% 1,275 $2,800 $2.20
Total/Average: 300 100.0% 885 $2,214 $2.50
Overall Average Including Premiums and Parking: $2,426 $2.74

* Market-rate units only

We expect rents to be 2% to 4% lower in late 2016 than today as a large volume of new buildings leads to an
oversupplied market. We expect the market to return to equilibrium conditions within five years.

We estimate that prototype buildings at the subject can lease up at an average pace of 15 to 20 units per
month.
December 6, 2013
Page 7

Key findings and recommendations are shown in Volume II, Appendix A, Tables A-1, A-2, and A-3 for the low-rise
apartments and Tables A-4, A-5, and A-6 for the high-rise apartments.

Condominiums

Our recommended unit mix and unit sizes for condominiums at the subject, as well as our estimated effective
prices in todays dollars, are shown in Figures 4 and 5 below.

F I G U R E 4
HI GH - R I S E P R OT OT Y P E C ONDOMI NI UM B UI L D I NG
R E C OMME ND E D UNI T MI X , UNI T S I Z E S , A ND P R I C E S

UNIT TYPE
UNIT MIX UNIT EFFECTIVE PRICES
# % SIZE (SF) PER UNIT PER SF
Studio 8 5.3% 625 $285,000 $456
1BR/1B+ 55 36.7% 750 $325,000 $433
1BR/1B+/Den 35 23.3% 950 $410,000 $432
2BR/2B+ 40 26.7% 1,125 $475,000 $422
2BR/2B+/Den 12 8.0% 1,400 $575,000 $411
Total/Average: 150 100.0% 942 $402,700 $427
Overall Average Including Premiums and Parking: $431,450 $458

F I G U R E 5
MI D - R I S E P R OT OT Y P E C ONDOMI NI UM B UI L D I NG
R E C OMME ND E D UNI T MI X , UNI T S I Z E S , A ND P R I C E S

UNIT TYPE
UNIT MIX UNIT EFFECTIVE PRICE
# % SIZE (SF) PER UNIT PER SF
1BR/1B+ 18 24.0% 775 $320,000 $413
1BR/1B+/Den 8 10.7% 975 $395,000 $405
2BR/2B+ 42 56.0% 1,175 $455,000 $387
2BR/2B+/Den 7 9.3% 1,425 $550,000 $386
Total/Average: 75 100.0% 1,081 $425,067 $393
Overall Average Including Premiums and Parking: $452,400 $419

December 6, 2013
Page 8

We estimate that condo units in a high-rise/concrete building at the subject can sell at an average pace of
three to four units per month and that units in a mid-rise/wood-frame building at the subject can sell at an
average pace of three units per month.

Price growth for condos in the subjects submarket is expected to outpace the metro area over the next three
years, with increases of up to 6% per annum.

Office

We estimate that Class A office space at the subject site can achieve an average face rent of $38 to $40 per SF,
full service, in todays dollars. We expect that rents will stay soft until after 2014 and that it will not be until
2016 when Northern Virginia experiences material gains in rent. Market-oriented tenant improvement
allowances will be $40 to $60 per SF (in todays dollars), depending on the size of the tenant, length of the lease,
and other concessions offered. In addition, we estimate a concession of three to four months free rent for most
tenants and up to eight months free rent for large tenants.

We estimate that a prototypical building with 269,000 SF of office space at the subject can reach stabilization
within 31 to 41 months after completion, assuming that about 50% (134,500 SF) will be preleased before
construction starts. The remaining office space will likely be leased at an average pace of 3,000 to 4,000 SF per
month after the building is delivered.

Key findings for the office space are shown in Volume IV on pages 2 and 3 of the letter as well as in Appendix A.

Retail

The scale of the 50,000 SF of retail that we recommend for the subject is supportable now and through 2018
for most types of convenience retail tenants, but not for a grocery store. We estimate that demand for
restaurants and health and personal care store space exceeds current and projected supply in the subjects retail
trade area.

We recommend a retail tenant mix that includes a pharmacy as an anchor and a mix of convenience goods,
personal/professional services, and eating places to fill most of the remaining space. For the typical spaces,
we recommend primarily local-serving tenants including a specialty food store, a quick service restaurant, and
convenience walk-away food such as pizza, a coffee shop/bakery, and an ice cream shop. Perhaps 50% to 60%
of the space can be devoted to health and personal care goods and services such as a day spa, nail salon,
vitamin/nutrition store, optician, and medical/dental offices. See Figure 6 on the following page for a complete
list of recommended tenants.

December 6, 2013
Page 9

F I G U R E 6
I L L US T R AT I V E R E C OMME ND E D R E T A I L T E NA NT P L A N
F OR T HE S UB J E C T S I T E

# OF
STORES
TYPE
ESTIMATED
STORE SIZE (SF)
TOTAL ESTIMATED
SQUARE FEET
1 Mini-Anchor (Pharmacy) 10,000 - 12,000 10,000 - 12,000
1 Specialty Food Store 1,500 - 3,000 1,500 - 3,000
1 Liquor / Beer / Wine 3,000 - 3,500 3,000 - 3,500
1 Coffee / Bakery 1,250 - 1,500 1,250 - 1,500
1 Ice Cream Shop 1,250 - 1,750 1,250 - 1,750
1 Pizza 1,250 - 1,750 1,250 - 1,750
1 Quick Service Restaurant 1,750 - 2,250 1,750 - 2,250
1 Bank (drive-in) 3,000 - 3,500 3,000 - 3,500
1 Day Spa 3,000 - 4,000 3,000 - 4,000
2 Hair / Nail Salon 1,500 - 2,000 3,000 - 4,000
1 Mailing / Photocopy Service 1,750 - 2,000 1,750 - 2,000
1 Dentist's Office 1,250 - 1,750 1,250 - 1,750
1 Doctor's Office 2,500 - 3,000 2,500 - 3,000
1 Chiropractor's Office 1,500 - 2,000 1,500 - 2,000
1 Insurance 1,250 - 1,500 1,250 - 1,500
1 Realtor 1,500 - 1,750 1,500 - 1,750
1 Dry Cleaners 1,250 - 1,500 1,250 - 1,500
1 Optician 1,250 - 1,750 1,250 - 1,750
1 Telephone Store/Telecom Store 1,500 - 2,000 1,500 - 2,000
1 Vitamins / Health Food / Nutrition 1,500 - 2,000 1,500 - 2,000
1 Pet Store 2,500 - 3,000 2,500 - 3,000
23 Total: 46,750 - 59,500

We estimate that the subject can achieve average face rents of $28 to $30 per SF triple net for typical retail
tenants, in todays dollars, with a tenant improvements package of $35 to $40 per SF and three to four months
of free rent.

Retail rents are expected to gather further momentum over the next year, with asking rent growth predicted
to be 2% to 3% in 2014 and perhaps 3% annually in the longer term.

We estimate that retail space on the ground floors of the office and residential buildings planned for the
subject site can be leased soon after completion of each building, particularly once several buildings are
occupied.

Key findings and recommendations for the retail space are shown in Volume V on pages 2 and 3 of the letter and
in Appendix A.

December 6, 2013
Page 10

Hotel

We recommend a hotel development program with a 120-room select service hotel. Examples of select service
hotel brands include Courtyard by Marriott, Cambria Suites, Hilton Garden Inn, Hyatt Place, and others. We
recommend the following room configuration:

F I G U R E 4
S E L E C T S E R V I C E HOT E L AT T HE S UB J E C T S I T E
R E C OMME ND E D C ONF I GUR AT I ON OF R OOMS

ROOM TYPE
ROOM MIX
# %
King 65 54%
Double Queen 49 41%
Double Queen Suite 2 2%
King Suite 4 3%
Total 120 100%

Occupancy for a select service hotel at the subject site is expected to stabilize at 71% by 2023 if delivered in
early 2020.

We project an average daily rate, at revenue stabilization in 2023, of $120 (in 2013 dollars). Please note that
this represents the estimated average daily rate, not the rack rate, which will be substantially higher. This rate
reflects a base rack rate of approximately $152 in 2013 dollars.

Key findings and recommendations for the hotel are shown in Volume VI, Appendix A, Table A-1.

* * * * *

December 6, 2013
Page 11

It has been a pleasure undertaking this assignment for you.

Respectfully submitted,

DELTA ASSOCIATES

David Weisel, CRE
President, Consulting

David W. Parham
Senior Vice President and Project Director

Grant Montgomery
Senior Vice President

William Rich
Senior Vice President

Justin Donaldson
Associate

Cassidy McCormick
Senior Associate

Rachelle Sarmiento
Associate
Michelle La Motte
Senior Consultant


N O T I C E

Delta Associates (DA) considers that it is essential to the reader's examination of this document, and projections
contained herein, to understand the use of data, the methodology involved, the role of judgments as distinct from
calculations in the methodology, factors which affect current projections, and the impact, if any, of change over
time.

The purpose of market, economic and financial projections, together with the basis for the projections, is to make
available a considered opinion on potential economic returns from the project so that those who utilize these
results can evaluate them in terms of methodology employed, data applied as well as judgments made and
identified. All prospective data are subject to uncertainties. As actual market and economic factors affecting the
project materialize, they may differ somewhat from the basis projected herein. Unforeseen changes in laws may
also affect real estate market performance and value. Accordingly, although the projections in this report are those
one would reasonably expect to occur given the conditions existing at the time of this writing, actual market and
financial results may differ from the projections.

Similarly, projections herein have been prepared utilizing the information, assumptions and calculations outlined in
this report. Select information utilized in the projection process is on occasion from sources other than DA; where
such information is from published sources, DA has identified the source and assumed such information to be
accurate as presented. Where such information is from unpublished sources, DA has reviewed the information for
reasonableness and consistency before including same herein. No representations are made by DA as regards
property ownership, size, zoning conformance, occupancy and lease terms, availability of utilities, soil conditions,
flood hazard, environmental problems, or any other matters. All such property specific data has been supplied to
DA by the property owner and/or its agents and DA has assumed this data to be accurate as provided.

DA's principal business activity is the evaluation of real estate development economics, including the analysis of
market potentials, evaluation of projected operating and financial results, and valuations. In the course of each year
the firm typically performs more than a hundred assignments for building and development organizations, financial
institutions, property owners and the like. The firm considers that it is "expert" in this field, and it is DA's belief that
the methodology and other procedures employed by it constitute valid and accepted methods of evaluating and
valuing real estate. However, it is pointed out that procedures used herein rely on judgments dependent on the
accuracy of data and influenced by external circumstances which can change quickly with time and substantially
affect the project and hence its value. DA recommends that its clients recognize these limitations inherent in using
the projections of this report when making business decisions.

Finally, the reader is hereby advised that Delta Associates is the trade name of Transwestern Delta Associates L.L.C.,
a Delaware limited liability company. As such, DA is part of the Transwestern (TW) family of real estate service
companies that broker, finance, manage, advise, and develop real estate throughout the United States. This
disclosure is made so as to (1) avoid the appearance of a conflict and (2) to assure the client of confidentiality and
impartiality. Delta Associates is independently operated by its principals and separately officed in Old Town
Alexandria. In no way does Delta Associates TW affiliation affect the judgments expressed herein.

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Huntington Club Redevelopment RFP

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HUNTINGTON CLUB REDEVELOPMENT

ALEXANDRI A, FAI RFAX COUNTY, VI RGI NI A

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