Crescent Resources, LLC, which was a subsidiary of Duke Energy at the time and is currently known as Crescent Communities, was a real estate development and land management company focused on the Southeastern and Southwestern United States. By virtue of its long-standing relationship with Crescent, Wells Hill Partners was alert to management’s desire to continue to increase earnings by growing its development platform from a regional to a national focus and doing so by expanding into high barrier-to-entry markets such as Washington, D.C. Wells Hill believed that an opportunity could be created for Crescent to acquire control over and ultimately develop Potomac Yard, an extraordinary in-fill site located in the Washington, D.C. submarket of Alexandria and Arlington, Virginia. Although the property was not on the market, Wells Hill initiated discussions with the owner, a company controlled by a finite-life real estate fund, which Wells Hill knew did not intend to develop the property. Wells Hill assisted Crescent by analyzing the assets and the ownership structure and presenting a proposal which put the assets in play.
Potomac Yard comprised roughly 380 acres and was the largest contiguous area of land available for high-density development within the Washington Beltway. The property overlooks the Potomac River and the Washington, D.C. monuments, is adjacent to Reagan National Airport, and is bordered by the George Washington Memorial Parkway to the east and U.S. Route One to the west. Wells Hill successfully structured a transaction whereby Crescent was initially able to submit a winning proposal for the property and subsequently was able to acquire Potomac Yard through a tax-deferred exchange. The Potomac Yard Retail Center, a nearly fully-leased 600,000 square-foot retail power center located on approximately 70 acres in the northern section of the Alexandria portion of Potomac Yard, was also included in the transaction. Crescent’s vision was to transform Potomac Yard into a $3 billion mixed-use urban development consisting of office, retail, residential and hotel uses. A portion of this vision has since been realized.