June 16, 2020Commercial Observer
CEO, American Real Estate Partners
The more than 40-year-old Rosslyn Metro Center – the 22-story mall and office building build atop the Rosslyn train station – was in desperate need of a refresh when American Real Estate Partners (AREP) bought it in 2015.
After years of planning, AREP unveiled its $35 million renovation project to the three-story mall last year which included relocating the escalators to open up the space, taking down walls to let in more light and adding a 20,000-square-foot food hall.
AREP started work on the project – which also includes upgrades to the office portion – in 2019 and renamed it Rosslyn City Center.
“We’re doing a very complicated facelift while the building is staying in full-operation, which is a tall order,“ AREP’s CEO Douglas Fleit said.
But it’s the kind of project AREP was built for. Fleit co-founded the company in 2003 with Brian Katz following the dot-com bust with the goal to take struggling buildings and help them realize their full-potential.
“We were founded on the principles of value addition,” he said.
Since then AREP has done more than $4 billion of acquisitions and recently moved into the discretionary fund business, crossing the $2 billion mark in discretionary fund investments which Fleit called a “major milestone.”
Aside from the Rosslyn City Center, AREP also started work on its largest new construction development in its history last year, the 15-story 7 Tower Bridge office property in Conshohocken, Pa., designed by Skidmore, Owings & Merrill. The Property is already 55 percent pre-leased with investment firm Hamilton Lane serving as the anchor tenant.
And even with the coronavirus pandemic threatening to dramatically change the office market, Fleit – who co-founded Cushman & Wakefield’s Washington, D.C. operation in 1981 – is confident AREP’s projects will still do well because the company designs its spaces without trying to pack tenants in.
“Every time the market makes this kind of adjustment we tend to grow,” he said. “I would be disappointed if we didn’t have the same significant growth we had in the last couple of cycles.” – Nicholas Rizzi