The federal government sold a nearly 1 million-square-foot vacant office building in Washington, D.C., that’s expected to be turned into a mixed-use development as the Trump administration cuts its real estate costs by eliminating underused property.
An affiliate of D.C.-based Dalian Development bought the roughly 940,000-square-foot building at 301 Seventh St. SW from the government for $24.26 million, according to documents posted with the city’s Recorder of Deeds. The new ownership is still evaluating uses, but Dalian said its plans to transform the property might include housing, retail and a museum or other entertainment venue.
Considered the first major D.C. office building sale to close under the second administration of President Trump, the transaction could signal how the General Services Administration, the federal agency that manages government property, will approach future workplace sales.
Several redevelopments in Washington these days are likely to involve apartment complexes crafted out of underused office buildings.
“We see Southwest D.C. as one of the last great blank canvases in a major city in the United States,” said Eric Mulata, vice president of development at Dalian, at a press conference Wednesday at the building. He also said his team plans to invest hundreds of millions of dollars into the project.
“Our experience downtown has shown that shifting from office‑dominated blocks to mixed‑use neighborhoods creates the energy and economic activity needed for long-term vitality.”
Another federal office property in the District, the Liberty Loan building, remains under contract and several others are listed for possible sale. A historic school building in the nation’s capital sold last year.
The Public Buildings Reform Board, a panel established by Congress to advise on federal property dispositions, welcomed the Seventh Street building sale in a statement to CoStar News. The disposition will save taxpayers $200 million in deferred maintenance and $5.5 million per year in operating expenses, GSA Administrator Edward Forst said at the event.
Opportunity in Southwest DC
Located a few minutes’ walk to the L’Enfant Plaza Metro rail station, the building was placed on the GSA’s accelerated disposition list about a year ago. Mulata said the deal took 60 days from contract to close.
He told CoStar News his team is familiar with the city’s Housing in Downtown program — a tax-abatement initiative to spur commercial-to-residential conversions. However, he said, his company is not yet at a stage to contemplate it. Even the number of apartments it would build in a redevelopment project is still in the works.
“Our experience downtown has shown that shifting from office‑dominated blocks to mixed‑use neighborhoods creates the energy and economic activity needed for long-term vitality,” a spokesperson for the District’s Office of the Deputy Mayor for Planning and Economic Development said via email. “Southwest has that same opportunity. Delivering on this vision will take time, coordination, and meaningful investment from both federal and District partners, but we are committed to ensuring this area evolves into a more vibrant, welcoming, and economically diverse community.”
Initially constructed as a warehouse in the 1930s, the Seventh Street building was later converted into offices for the GSA. After most recently being occupied by the Department of Homeland Security, it has sat empty since last March. It has seven above-grade floors, a basement and a mechanical penthouse, according to JLL, the real estate services firm that marketed the property.
The deed for the Seventh Street building includes a covenant that two dozen mural panels painted in oil by American modernist artist Harold Weston remain under GSA ownership.
As for the new owner, Dalian has completed more than 1,000 apartment units in Philadelphia and San Antonio and has active developments in Raleigh, North Carolina; Richmond, Virginia; and Pittsburgh, according to its website.
The firm serves as the multifamily development arm of a family office overseen by international businessman Hossein Fateh, founder and CEO of Cloud Capital and Washington-based global data center company CloudHQ.
“Over the long-term, we are very bullish on D.C.,” Mulata told CoStar News following the press conference.
For the record
JLL's Andrew Weir, Andrew Gemma and Craig Childs served as the brokers for the property.