D.C. Council Approves $275M Bond Financing for Judiciary Square Office-to-Residential Conversion

The D.C. Council on Tuesday approved up to $275M in tax-exempt revenue bonds that will fund the conversion of 600 E St. NW, a vacant 325K SF office building in Judiciary Square, into 415 apartment units. The building was previously occupied by the U.S. Department of Justice before that agency relocated to NoMa, and it has sat empty for nearly a decade. Berkeley-based nonprofit developer Madrone is the project sponsor, and the property remains owned by S.C. Herman & Associates.

The apartments are aimed at college students, faculty and staff, and the ground floor will host a roughly 25K SF Sprouts Farmers Market. Financing will cover acquisition, demolition, renovation and a tenant improvement allowance for the grocer. Per the council memo, about $44M goes to land and building acquisition, $13M to demolition, $81M to renovation and $6M to the Sprouts TI. Amenities include a fitness center, coworking space and a 140-space underground garage. Madrone must repay the District's financing.

Councilmember Brooke Pinto, whose Ward 2 includes the site, said the project would bring a much-needed grocery store downtown and support nearby university growth. Council Chairman Phil Mendelson moved the legislation on an emergency basis so financing could close this month to meet the August 2028 delivery schedule.

The approval adds to the District's office-to-residential conversion pipeline, which trails only New York City according to Avison Young data cited in the report. Downtown conversions have been supported by the mayor's 20-year tax abatement. Across the street, a separate former DOJ building at 450 Fifth St. NW is also slated for about 500 units.

For developers and lenders, the deal shows public bond capital being used to make a long-vacant federal office conversion pencil with a grocery anchor.