Lofts face tough market

September 15, 1991|By New York Times News Service

WASHINGTON -- After developing several successful residential and commercial properties in transitional neighborhoods, Columbia Associates expected their loft apartments in a renovated 1891 brick schoolhouse to sell quickly.

But after four months on the market, the Morgan Annex condominiums are only 25 percent sold.

David Miller and his partners, Kenton Campbell and Tom Glass, specialize in developing projects in emerging neighborhoods. All live within three blocks of the Morgan Annex, and they develop only projects within 10 blocks of their homes.

The site is in the Adams Morgan neighborhood, three blocks from expensive Victorian homes and popular restaurants, but two blocks from rundown rental units, empty warehouses and an active drug trade. It is 17 blocks north of the White House.

Social conditions, a slow real estate market and racial unrest in May contributed to the sluggish sales, said Rob Grady, treasurer of the Adams Morgan Business Association and a local real estate broker.

"It was bad timing, unfortunately, for the Morgan Annex to come on the market," he said, adding that Columbia Associates "are the premier loft developers in the city."

With a limited industrial history, Washington has few buildings conducive to loft development. The Morgan Annex, empty since 1968, had served black elementary schoolchildren during segregation (white children attended the Adams School). Columbia Associates bought it at auction from the city for $905,000 in October 1989. For $3.5 million, with financing from American Security Bank, they created 16 units, 12 with no interior walls.

On the first two floors, the developers kept the 1,300-square-foot classrooms with 16-foot ceilings and tall windows. The cloakrooms became kitchens with openings to the living space, and the foyers and bathrooms were renovated.

From the school's attic, the partners built a top floor of four two-bedroom duplexes carved into more traditional space but offering the same tall windows. The decks in these 1,600-square-foot apartments provide panoramic city views.

The four ground-floor units sell for $185,000 to $187,500, the first- and second-floor lofts range from $189,500 to $235,000, and the duplexes are priced at $315,000 to $319,500.

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