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1 Page 1 of 11 If you don't see images, click here to view To ensure delivery, please add newsletter@bisnow.com to your address book, learn how The largest commercial real estate publication in the United States. Atlanta Austin Baltimore Boston Charlotte Chicago Dallas-Fort Worth Houston Los Angeles Philadelphia New Jersey New York San Antonio San Francisco Seattle South Florida Toronto Washington National April 12, 2012 PLAY BALL! Join us May 9-10 at the luxurious Tysons Ritz for our Bisnow Lodging Investment Summit (BLIS).See the full line up and register here. Since the Nats came to DC in 2005, Capitol Riverfront has morphed from forgotten industrial zone to a new and lively neighborhood. It hasn't been easy there were political wars over stadium approval, a crippling recession that hit emerging areas hardest, and a string of bad luck (two words: Tommy John) that failed to draw expected crowds. We know hope springs eternal, but now, with the team's home opener today, fans of both the club and the area seem to be thinking this really could be the year. The neighborhood's population has nearly tripled to 3,600 residents since 2007, fueled by young professionals, says Capitol Riverfront BID executive director Michael Stevens (center, with colleagues Claire Schaefer and Ted Skirbunt). That's led to a residential explosion every multifamily project delivered since the stadium opened in '08 is over 90% leased. 584 units are under construction, and another 1,000 are to break ground over the next 12 months. And the boom isn't limited to multifamily: All 323 of EYA's Capitol Quarter townhomes are sold, with market rate unit prices averaging around $800k. (A few cracked $1M.)

2 Page 2 of 11 We also asked Michael what the office crowd should know about what's changing in the neighborhood. Click here for his answer.

Page 3 of 11 According to Cassidy Turley, the submarket's office vacancy rate is 17.4%.

(Sources tell us it's in the running for a major lease.) "We've been criticized that we don't have support amenities for the office market," Michael says.

3 Page 3 of 11 According to Cassidy Turley, the submarket's office vacancy rate is 17.4%. It's concentrated at 1015 Half St (snapped this morning), a former Opus East building purchased by Prudential last fall. (Sources tell us it's in the running for a major lease.) "We've been criticized that we don't have support amenities for the office market," Michael says. "With Harris Teeter and nine restaurants opening over the next 12 to 14 months, this area will have places to entertain employees and clients." Where do things go from here? "Things were aspirational for a while, but the vision is becoming reality," Michael says, remembering when the area had more construction sites than buildings. Now that Nats Park "has positioned us in the regional GPS," he's lobbying to get more Green Line trains running through the Navy Yard Metro station, planning community events (like Friday evening concerts at The Yards Park, above), and cueing up the next round of investment. Developments to Watch

Page 4 of 11 Now that we've looked at the overall neighborhood, here are specific projects.

Construction is under way on the Boilermaker Shops (delivering in late '12), above, and the 218-unit apartment/50k SF Harris Teeter development on 4th Street (delivering in late

And the Foundry Lofts, a 170-unit luxury apartment building, is almost fully leased.

4 Page 4 of 11 Now that we've looked at the overall neighborhood, here are specific projects. The biggest is The Yards (owned by Forest City), a 42-acre site along the waterfront zoned to accommodate 1.8M SF of office space, 2,800 residential units, and 400k SF of retail. Construction is under way on the Boilermaker Shops (delivering in late '12), above, and the 218-unit apartment/50k SF Harris Teeter development on 4th Street (delivering in late '13). Work is also about to start at the Lumber Shed, which will feature new restaurants and retail. And the Foundry Lofts, a 170-unit luxury apartment building, is almost fully leased. Some of you might have noticed lots of industrial boxes at Akridge's Half Street site near the stadium. That's no accident, says the firm's Adam Gooch (right, at the site yesterday with Georgetown Events' Bo Blair). "We're using recycled shipping containers to create what we call Fairgrounds," he says. They'll be occupied by vendors from Eastern Market, the Bullpen Beer Garden, and food trucks, and the site will also host concerts and community events.

Page 5 of 11 The idea was inspired by Brooklyn's DeKalb Market (above), Adam tells us.

office buildings, 55k SF of retail, and 277 apartments. "We view Half Street as a great place for retail this is the first toe in the water." William C.

New Jersey Avenue, in Q3 with delivery in '14. The site can accommodate up to 1.

5 Page 5 of 11 The idea was inspired by Brooklyn's DeKalb Market (above), Adam tells us. "It's a great interim use," he says, "because we can take all or part of it down in about a week to start construction on our plans for the site," which include two office buildings, 55k SF of retail, and 277 apartments. "We view Half Street as a great place for retail this is the first toe in the water." William C. Smith & Co's Konrad Schlater tells us his firm starts construction on Park Chelsea, a 432-unit luxury apartment building designed by Esocoff & Associates located on New Jersey Avenue, in Q3 with delivery in '14. The site can accommodate up to 1.5M SF in development, including 1,300 residential units, he says, and the firm is PUD-approved for a 235k SF office building, 250 M at Canal Park. What he likes about the Riverfront: "On top of the ballpark, it provides a unique mix of amenities and a dynamic lifestyle that you won't find anywhere else in the region or city." Dining Options

Page 6 of 11 The neighborhood restaurant scene is also poised for transformation.

24/7 Diner, Willie's Brew & Cue (from the owner of Lola's, Molly Malone's, the Chesapeake Room, and other Capitol Hill restaurants), and a craft brewpub called Bluejacket.

The 200-plus seat space will produce beer on site with a menu overseen by Birch & Barley chef Kyle Bailey.

6 Page 6 of 11 The neighborhood restaurant scene is also poised for transformation. The Boilermaker Shops will host some recognizable eateries like brb (be right burger), Buzz Bakery, and Austin Grill Express as well as new concepts to the area, including Louisiana transplant Huey's 24/7 Diner, Willie's Brew & Cue (from the owner of Lola's, Molly Malone's, the Chesapeake Room, and other Capitol Hill restaurants), and a craft brewpub called Bluejacket. The brewpub comes from the same restaurant group that brought you Birch & Barley/Churchkey, Evening Star Cafe, Rustico, and Tallula (among others). The 200-plus seat space will produce beer on site with a menu overseen by Birch & Barley chef Kyle Bailey. Arguably one of the biggest culinary scores is Osteria Morini, the first DC restaurant from esteemed NY chef/restaurateur Michael White. The James Beard Foundation nominated Michael as Best Chef in New York for the past two years, and his restaurant Marea is repeatedly ranked one of the best in the country. Osteria Morini, a more casual concept, already has locations in Soho and Bernardsville, NJ. The restaurant pays homage to the Emilia- Romagna region of Italy known for prosciutto, parmigiano, and balsamic vinegar. The 4,250 SF DC location (in Forest City's Lumber Shed along the riverfront, above) will feature pastas, grilled meats, fish, and other northern Italian specialties. It's slated to open in the summer of 2013.

(But whether Danny will get to throw an opening pitch as he did last year has yet to be seen.

7 Page 7 of 11 Let's not forget about the stadium itself the options at Nationals Park are more than peanuts and hot dogs. NY restaurateur Danny Meyer is back for a second season with Box Frites, Blue Smoke, El Verano Taqueria, and Shake Shack. (But whether Danny will get to throw an opening pitch as he did last year has yet to be seen.) New this year are "Eat for the Cycle" punch cards (available April through June) that award fans with free food or Nationals caps for purchases of $7 or more from each of the four eateries. Completed cards can be entered for a chance to win prizes like four field passes to watch batting practice or four tickets to later games. How many games will the Nats win this year? Tell Mike Leon.

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BALLPARK METRO 1100 NEW JERSEY AT NAVY YARD

BALLPARK METRO 1100 NEW JERSEY AT NAVY YARD 1100 NEW JERSEY AT NAVY YARD BALLPARK METRO 4 sides of glass and generous setbacks Views of the US Capitol, Canal Park, Nationals Stadium and the Potomac River 11 foot slab-to-slab heights Parking ratio