The Challenge
For five years, the iconic “Post Office Building” in the Del Ray section of Alexandria, VA sat on the market without a buyer. The aging three-story, 13,096 square foot building anchors the neighborhood, but its full potential remained locked—no one could make the numbers work. While the ground floor enjoyed the stability of a USPS lease, the third floor sat vacant and the second floor was encumbered by a below-market office lease. This created a challenge for every prospective buyer wanting to pursue a residential conversion or to occupy the upper floors. The off-street parking lot represented additional value for future residential redevelopment, but this opportunity couldn’t be realized until the parking obligations to existing tenants could be replaced. Most prospective buyers viewed these factors as obstacles and couldn’t find a path to profitability.
Tartan Action Plan
Like many other developers, Windmill Hill had previously considered this project but passed. Initially, the purchase price didn’t align with the construction costs to convert the upper two floors and the time required to wait for the existing lease to expire on the second floor. But when a price reduction was announced, our client’s interest in solving this puzzle was renewed. After a short but intense period of negotiations, the property was put under contract and the work began. TARTAN managed the complex due diligence, analyzing lease structures, inspections, parking obligations, and zoning opportunities under the Mt. Vernon Overlay District. When the buyer’s attorney discovered a termination option in the office tenant’s lease, an opportunity to accelerate the redevelopment timeline emerged. This significantly improved the speed to profitability—unlocking value that others had missed. TARTAN’s deliberative approach and market expertise gave Windmill Hill the confidence to move forward where others had passed.
The Results
Windmill Hill successfully acquired the iconic neighborhood “Post Office Building,” adding a landmark property to their growing portfolio. With TARTAN’s guidance through negotiations and due diligence, the acquisition was completed after deliberate planning. This project demonstrates how patient capital, local market expertise, and strategic vision can unlock value in properties that others viewed as too complex.
The Testimonial
Mike Dameron, President, Windmill Hill
