Georgetown University is in the process of repurposing the property located at 111 Massachusetts Avenue NW (nicknamed the “Darth Vader” building). According to the University, the building “is expected to be used as a multi-use education facility for new learning hubs and expanded programming, including programs in the School of Continuing Studies, McDonough School of Business, the Earth Commons Institute, the School of Health, the School of Nursing, and executive education programs.” Construction at the property—which covers a land area of 35,336sf and sits across Massachusetts Avenue from the Georgetown University Law Center and Capitol Crossing—is expected to be complete in the fall of 2025.
According to public records, Georgetown University acquired the property from Jemal’s Darth Vader LLC on December 16, 2021 for $85 million. The DC Government’s CorpOnline database lists Norman Jemal and Douglas Jemal (of Douglas Development Corporation) as the “beneficial owners” of Jemal’s Darth Vader LLC.
The Washington Business Journal reports—citing data from the Department of Education—that in fiscal 2022, Georgetown had Greater Washington’s largest university endowment at $3.21 billion. According to a Georgetown University Consolidated Financial Statements, “[t]he University’s endowment totaled $3,298,969,000 and $3,210,032,000 at June 30, 2023 and 2022, respectively.”
The “Darth Vader” building, located at 111 Massachusetts Avenue NW in Washington, DC. Photo: Ramin Seddiq
“Rappi1 is a Latin American super-app offering a variety of digital consumer services that began with food delivery and has since expanded to provide e-commerce, travel, and banking services[,]” according to an analysis published by Contrary Research which states further that “Rappi’s core offering is its delivery service, which allows customers to order a wide variety of goods across more than eight categories of products as of May 2024, including restaurant orders, groceries, pharmaceuticals, clothing, drinks, travel bookings, and electronics.”
In 2023, Rappi’s growth rate was 37 percent year-over-year, according to Sacra, and as reported in Statista, with a market value of $5.25 billion, the Bogotá-based on-demand delivery service is Latin America’s second most valuable unicorn.2Reuters reports that Rappi operates in nine countries across Latin America; that it is backed by Japan’s SoftBank; and that according to cofounder Simón Borrero, it could be ready to launch an initial public offering on the New York Stock Exchange within 12 months, but that the company is in no rush to launch an IPO, taking into account its better earnings figures reported last year.
As stated on the company website, Rappi “was created in August 2015 by Simón Borrero, Felipe Villamarín and Sebastian Mejía […] as the solution to connect small businesses or ‘neighborhood stores’ with users in a few city blocks.” Rappi’s growth and success has had economic reverberations in Latin America. According to a CSIS report, in Colombia,3 more than 110 companies have been formed by Rappi alumni across a wide range of industries. “These companies have collectively raised more than $2.1 billion in [venture capital] funding and employ more than 14,000 people[,]” according to the report, which also cites a GSMA study stating that “every 10 percent increase in digitalization has the potential to generate a 1.9 percent increase in GDP growth for LAC [(Latin America and the Caribbean)] countries.”
Rappi’s rapid rise brings some risk, according to the analysis published by Contrary Research, which states that “[t]he company’s expansion strategy and diversified service offerings aim to increase user engagement and market penetration but also complicate resource allocation and management.” Rappi also faces issues related to labor rights and working conditions.
Rappi uses micro-fulfillment centers/“dark stores”4 to store inventory and enable rapid delivery. Micro-fulfillment centers and “dark stores” are small-to-medium-sized storage facilities that are used by the e-commerce industry to store inventory closer to the end user so as to reduce cost and transit/delivery times.
According to Startup Savant, Rappi takes its name from (and is a play on) the Spanish word “rápido,” meaning fast. ↩︎
Unicorn is the term used in the venture capital industry to describe a privately-owned startup company valued at over $1 billion. ↩︎
According to the company, Rappi has 150,000 registered delivery drivers in Colombia, of which 52 percent connect regularly. ↩︎
Although the terms micro-fulfillment center and “dark store” are sometimes used interchangeably, “dark stores” are usually retail spaces that are closed to the public and used exclusively for e-commerce order fulfillment whereas micro-fulfillment centers are typically small warehouses (~10,000sf) that serve a function similar to “dark stores.” ↩︎
Insight Property Group intends to redevelop the now-shuttered1 Macy’s at 685 & 701 North Glebe Road in Arlington, VA into a 16-story building with 553 apartment units, a 38,400sf organic grocery store and 2,000sf of in-line retail space. Construction at the two-acre (87,365sf) site will include two levels of underground parking and one level of above grade parking, according to an Arlington County profile of the project. An employee of a nearby store stated today that he believes Whole Foods Market will be the grocery tenant.
According to Andrew A. Painter, “[i]n exchange for transferring density from the Haven [apartments] site to the Ballston Macy’s site through the County’s Transfer of Development Rights process, Insight [Property Group] agreed to commit the Haven’s units as Committed Affordable Units, record a historic easement to preserve the Haven’s architectural integrity, and make a series of sustainability and maintenance investments at the Haven site.”
According to the International Council of Shopping Centers (ICSC), a strip center is an “[a]ttached row of stores or service outlets managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the store fronts, but a strip center does not have enclosed walkways linking the stores. A strip center may be configured in a straight line, or have an “L” or “U” shape.” Strip centers are also known as strip malls. The U.S. has more than 68,000 strip centers from coast to coast, according to CNBC (citing data from ICSC). Strip centers range in size from 5,000sf to over 100,000sf, according to Wikipedia. ProjectionHub states that the average strip center is between 7,000sf and 20,000sf.
Traffic to strip centers was up 18 percent in 2022 compared to pre-pandemic numbers, according to a RetailStat analysis of 2,500 properties (reported by Audacy). RetailWire—citing data from Placer.ai—reports that foot traffic was found to be down one percent at strip centers in 2023 compared to pre-pandemic 2019 levels. That compares to a decline of 2.3 percent across U.S. shopping centers, with visits declining 5.8 percent at indoor malls and 8.5 percent at outlet malls, according to the report. Data from Marcus & Millichap (reported in GlobeSt) indicates that during the past three years, demand in the unanchored strip center subsector more than quadrupled new space delivery, compressing vacancy to 4.7 percent — the lowest recording since 2003. An average of 10,000 new leases were executed annually for 1,000sf to 5,000sf spaces at strip centers during this same period, according to the report.
In its Q–2 2024 retail market report, JLL notes an increasing focus “toward strip centers, particularly from an investment perspective.” The report states further that “[w]ith many centers located close to daily needs destinations, they often benefit from increased traffic and steady income from service-based tenants like medical offices and F&B tenants.” According to a March 2024 report, CBRE Econometric Advisors (“CBRE EA”) estimates the retail sector cap rate (the average for all markets covered by CBRE EA) to be 6.4 percent.
On April 23, 2024, the Chicago-based operator of Foxtrot and Dom’s Kitchen & Market announced the closure of all store locations amid plans to file for bankruptcy, according to Forbes. Chicago Reader writes that one thousand people were out of work with hours’ notice. The decision affected 33 Foxtrot locations across Chicago, Austin, Dallas, and Washington, DC, along with the two Dom’s stores in Chicago, according to Axios, which reports that the upscale hybrid market-cafés were popular local spots for artisanal snacks and gourmet food, as well as good places to work remotely.
Foxtrot Market and Dom’s Kitchen & Market agreed to merge last year under a new entity called Outfox Hospitality (“Outfox”), according to Specialty Food News. Progressive Grocer reports that during the week of May 13, 2024, Outfox filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, claiming that it cannot pay its creditors and listed its value and liabilities between $10 million and $50 million, with a range of 5,001 to 10,000 creditors. The report also states that on May 10, 2024 (prior to filing for bankruptcy) DLA Piper—the law firm that works with Foxtrot creditor JPMorgan Chase & Co.—conducted an online auction of Foxtrot’s assets and that a private holding company called Further Point Enterprises made the solo and winning bid ($2.2 million) for Foxtrot’s assets.1
According to The Real Deal, Mike LaVitola,2 who founded Foxtrot in 2013, is believed to be working with New York-based Further Point Enterprises to reopen multiple locations in Chicago and Texas. However, the new Foxtrot ownership isn’t planning to reopen any Washington, DC stores, according to the report (citing “sources”). C-Store Dive reports, citing a May 31 court filing with the U.S. Bankruptcy Court, that Further Point Enterprises has entered into lease agreements for six of Foxtrot’s former stores in Chicago. The six locations that Further Point has leased were part of the group of 15 Foxtrot stores whose assets it acquired in the May 10 online auction, according to the report (citing information from the bankruptcy court filing). Eater Chicago reports that on Wednesday, June 5, LaVitola announced plans to reopen 15 stores in Chicago, Dallas, and Austin this summer, with more than half of these 15 stores located in Chicago, and with the stores in Chicago’s Old Town and Gold Coast neighborhoods slated to reopen in six to eight weeks. The reopened stores will maintain Foxtrot’s layout and merchandising as well as its focus on small, local vendors, according to C-Store Dive (citing a company spokesperson).
A class action complaint filed on April 24, 2024, in the U.S. District Court for the Northern District of Illinois, alleges in part that Foxtrot Retail, Inc., Outfox Hospitality LLC, and Dom’s Market LLC (collectively, the “Defendants”), were “employers” as defined by the WARN Act, 29 U.S.C. § 2101(a)(1),3 20 C.F.R. § 639(a), and IWARN, 820 ILCS 65/5(c)4; that neither Jamil Moore (the “Named Plaintiff”) nor any members of the putative WARN and/or IWARN classes received at least 60 days’ notice of the Defendants plant closing and/or mass layoff; and that neither the Named Plaintiff nor the members of the putative WARN and/or IWARN classes received compensation for the 60-day notice period that should have been paid under WARN and/or IWARN.
The auction ended when no offers were accepted for the estimated $200,000 in assets from Dom’s Kitchen & Market, according to Progressive Grocer. ↩︎
According to a 2018 University of Chicago news release, Michael LaVitola, MBA’14, founded Foxtrot while in his first year at the University of Chicago Booth School of Business. Foxtrot is the fourth recipient of a venture investment from the UChicago Startup Investment Program, according to the news release, which also reported that the company “has received $450,000 from the university as part of their $6 million Series A round, which is led by Fifth Wall.” ↩︎
The federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. (“WARN”). ↩︎
The Illinois Worker Adjustment and Retraining Notification Act, 820 ILCS 65/1 et seq. (“IWARN”). ↩︎
A shuttered Foxtrot in the Rosslyn neighborhood of Arlington, Virginia. Photo: Ramin Seddiq
China’s overall coffee sales will rise at an 8.7 percent compound annual growth rate (CAGR) during the 2022–27 time period, with hot coffee outpacing sales of ready-to-drink coffee drinks, according to GlobalData. Xiamen-based Luckin Coffee Inc. (“Luckin”) has tapped into the rising popularity of coffee in China, and it has overtaken Starbucks to become the largest coffee chain in nation of 1.4 billion, according to Global Times.
Luckin’s Q1–2024 financial report states that “[t]otal net revenues in the first quarter were RMB6,278.1 million ($869.5 million), representing an increase of 41.5 percent from RMB4,436.7 million in the same quarter of 2023.” Total net revenues in fiscal year 2023 were RMB24,903.2 million (~$3.5 billion), representing an increase of 87.3 percent from RMB13,293.0 million in fiscal 2022, according to Luckin’s 2023 financial report. By comparison, Starbucks reported total revenue of $3.05 billion in China for fiscal 2023 that ended October 1, according to a CNN calculation based on the company’s quarterly results.
In its Q1–2024 financial report, Luckin states that “[n]et new store openings during the first quarter was 2,342, including two new store openings in Singapore, resulting in a quarter-over-quarter store unit growth of 14.4 percent from the number of stores at the end of the fourth quarter of 2023, ending the first quarter with 18,590 stores which include 12,199 self-operated stores and 6,391 partnership stores.”1 Starbucks’ outlets in China are entirely company-owned, according to CNN, which reports (citing data from Starbucks) that as of the end of January 2024, Starbucks had 6,975 stores in China—a 14.5 percent increase from a year earlier. China is Starbucks’ second largest market after the U.S., according to Visual Capitalist.2
CNBC reports that Luckin and Starbucks have different pricing strategies and because Luckin “offers heavy discounts and offers,” a cup of coffee from Luckin costs 10 to 20 yuan, or about $1.40 to $2.75, whereas a cup of coffee from Starbucks is priced at 30 yuan or more (i.e., at least $4.10). Luckin has introduced menu items that appeal to the Chinese customer and elevate the popularity of coffee in the country. For example, Luckin collaborated with Kweichow Moutai3 to create the Jiangxiang-flavored4 latte which, according to a Q3–2023 Luckin earnings call, broke Luckin’s single-item sales record with 5.42 million cups sold on launch day. According to an April 8, 2024 Luckin press release, “[t]he ‘Jiangxiang Flavored Latte’, a successful product jointly launched by Luckin Coffee and Kweichow Moutai, has captured the hearts of China’s younger demographic, amassing a transacting customer base of over 25 million.” The same press release also announced that on March 29, the Luckin Coffee x Kweichow Moutai theme store opened in Shenzhen, Guangdong province.
In terms of site criteria, Luckin stated in a fiscal year 2023 SEC Form 20-F that “[w]e primarily operate two types of stores, namely pick-up stores and relax stores, for different purposes, and we strategically focus on pick-up stores, which accounted for 98.5 percent of our total self-operated stores as of December 31, 2023. Our pick-up stores have limited seating and are typically located in areas with high demand for coffee, such as office buildings, malls, shopping districts and university campuses.” … “The majority of these [pick-up] stores generally range from 20 to 60 square meters [(215-646sf)] in size …” The filing states further: “We open relax stores for branding purposes. Our relax stores accounted for 1.5 percent of our stores as of December 31, 2023. Relax stores are generally spacious and larger than 120 square meters [(1,292sf)] in size.”5
On April 24, 2024, Luckin announced the opening of a new roasting plant in Kunshan, Suzhou City of Jiangsu Province. The press release stated that “[w]ith a total planned investment of $120 million and an annual roasting capacity of 30,000 tons, it is the largest coffee roasting plant in China to date.”
As of December 31, 2023, Luckin had 10,628 self-operated stores in operation, including 10,470 pick-up stores and 158 relax stores, according to an SEC filing. ↩︎
As of October 2023, Starbucks had 16,346 stores in the U.S., of which 9,645 were company-owned and 6,701 were licensed, according to Visual Capitalist. ↩︎
Kweichow Moutai, is a Chinese company specializing in the production, sale, and distribution of Maotai, a style of baijiu made in the town of Maotai, Guizhou Province, China. ↩︎
The 12-story, 110-unit mixed-use (multifamily and retail) building in DC’s Union Market neighborhood sold at a foreclosure auction today for $38,300,000.00. Silver Spring-based HH Fund is the purchaser. PropertyQuest (DC Office of Planning) indicates the 2024 assessment for the property (land and improvements) to be $41,068,460.
According to The Real Deal, New York-based Ranger Properties purchased the pre-development property in 2017; the development entitlement process took two years; EagleBank issued a $33.7 million construction loan in 2019; the new development delivered in early 2023; and Srinivas Chavali purchased the nonperforming loan backing the property in January 2024.
The building includes 3,463sf of retail space, a portion (1,136sf) of which is leased to The UPS Store. The remaining 2,327sf is vacant. The multifamily portion of the building is known as The Lanes at Union Market. The property is located about a thousand feet from Edens-owned Union Market, which is a food hall that anchors the Union Market District.
Reuters reports that Chinese electric auto maker BYD is evaluating locations in Mexico for a production facility. The report cites Americas head Stella Li as stating that the plant will be built in central Mexico and will take two to three years to complete. It will have a capacity of 150,000 vehicles per year, according to Li, as reported in the Detroit Free Press. In an interview with WardsAuto, Jorge Vallejo, BYD’s general director in Mexico, stated in part: “These days our focus is basically on the Mexican market. We expect to commercialize 50,000 vehicles this year and we want to more than double those sales next year.” On May 14, BYD launched its first pickup truck—the mid-to-large size BYD Shark—in Mexico, according to CleanTechnica.1
According to Asia Financial, BYD overtook Musk-led Tesla in sales for the first time ever in Q4–2023, delivering 526,409 vehicles in the October-to-December period and exceeding Tesla’s deliveries of 484,507 EVs. Reuters reports that during a January 2024 post-earning call with analysts, Elon Musk said that Chinese car companies were the “most competitive”; that they “will have significant success outside of China, depending on what kind of tariffs or trade barriers are established”; that “[i]f there are no trade barriers established, they will pretty much demolish most other car companies in the world,”; and that “[t]hey’re extremely good.”
On May 14, The White House announced that the tariff rate on electric vehicles under Section 301 of the Trade Act of 1974 will increase from 25 percent to 100 percent in 2024, stating that “[w]ith extensive subsidies and non-market practices leading to substantial risks of overcapacity, China’s exports of EVs grew by 70 percent from 2022 to 2023—jeopardizing productive investments elsewhere. A 100 percent tariff rate on EVs will protect American manufacturers from China’s unfair trade practices.” CBS News reports that the administration “is trying to keep the U.S. from emulating Europe, where Chinese EVs quickly came to account for about 20 percent of the market share, but is not considering banning Chinese-made EVs.”
Mexico’s industrial real estate market is thriving, according to an analysis published in Thornburg, which states that if just three percent of China’s industrial gross leasable area (GLA) were to shift to Mexico, the Mexican industrial market footprint would double. According to TC Latin America Partners, industrial inventory in Mexico has doubled since 2008 with vacancies hovering at just seven percent over the last decade. Commercial Property Executive reports (citing data from Fitch Ratings) that Mexico’s industrial market attracted more than $18.6 billion in foreign investment in the first quarter of 2023 alone, a 48 percent increase year-over-year.
Mexico is the world’s seventh largest passenger vehicle manufacturer, producing 3.5 million vehicles annually, according to the International Trade Administration, which further states that 88 percent of vehicles produced in Mexico are exported, with 76 percent destined for the United States. The Mexican Automotive Industry Association (AMIA) estimates that Mexico will become the fifth largest global vehicle producer by 2025, according to Prodensa.
Mexico Business News reports that in addition to a production facility in Mexico, BYD intends to invest in a new industrial complex in northeastern Brazil, which is set to be built on land previously occupied by a Ford plant that ceased operations in 2021. That plant is estimated to cost 3 billion reais (US$620 million). ↩︎
Japanese department store operator Takashimaya intends to expand its presence in Vietnam by opening a store in Hanoi, according to Inside Retail, which reports (citing Nikkei) that the company’s subsidiary, Toshin Development, has already started work on a mixed-use complex in the Vietnamese capital. Vietcetera reports that the company plans to invest around ¥2 billion ($12.9 million) in the project, which will be the first Japanese department store chain to establish a physical presence in Hanoi as well as Takashimaya’s first overseas venture in eight years. Slated to open in 2026, the Hanoi store will have 10,000 square meters of sales space and will be part of a mixed-use development that includes apartments, offices and retail space, according to Invest Vietnam.
In HCMC’s District 1, Takashimaya is an anchor tenant at Saigon Centre, a mixed-used development that was jointly developed by Keppel Land, a Singapore–based developer and Toshin Development. The Saigon Centre store opened in 2016, consists of five stories, and “involved individual sub-tenant fit-outs for over 100 brands,” according to Pure Projects. That store posted a two percent increase in revenue to three billion JP¥, during the fiscal year that ended February 2024, according to VietnamPlus.
Takashimaya currently has 22 locations—18 in Japan and four overseas.
Ba Son Bridge connecting District 1 to Thu Duc City; HCMC (Saigon), Vietnam Photo: Ramin Seddiq
Netherlands-based premium economy hotel chain citizenM is slated to open a new 228-key location in DC’s Georgetown, according to Donohoe. The plans indicate that the new seven-story hotel at 3401 Water Street NW (aka 3401 K Street NW) will incorporate an existing two-story building as the base and will total 80,146sf. This will be the third citizenM hotel in Washington. The “M” stands for “mobile.”
citizenM opened its first hotel in Amsterdam in 2008 and plans to operate 40 hotels and 8,545 rooms by 2025, according to its website, which lists its development specifications as: Opportunities of 3,500–10,000 square meters (40,000–110,000sf); 100–350 keys; and prime metropolitan locations, central business districts (CBDs) and terminal-linked airport sites (>35 million passengers per year). “citizenM is the first and only hotel built entirely from prefabricated rooms,” according to the company.
The Financial Times reports that the owners of citizenM including its largest shareholder Dutch pension provider APG, Singaporean wealth fund GIC and founder Rattan Chadha are exploring a potential sale, or the sale of a minority stake, as the company seeks to expand following the post-pandemic rebound in the travel sector. Morgan Stanley and Eastdil Secured are advising the owners, according to the report, which cites a person “familiar with the matter” as estimating that the company could be worth roughly €4bn in a deal.
citizenM construction/development site, Georgetown, Washington, DC Photo: Ramin Seddiq
