The Sankei Building Co., Ltd. and Duball, LLC Launch Second D.C. Office-to-Residential Conversion Near White House

The Sankei Building Co., Ltd. and Duball, LLC have launched their second joint office-to-residential conversion project in Washington, D.C., acquiring a 12-story office building at 1090 Vermont Avenue NW and planning to redevelop it into approximately 150 luxury rental apartments. The joint venture agreement and acquisition closed July 15, 2026, with construction scheduled to begin in November 2026 and completion targeted for the first half of 2028.

The project marks the second collaboration between Tokyo-based The Sankei Building Co., Ltd. and Rockville, Maryland def-based Duball, LLC in the Washington market, following an earlier office-to-residential conversion announced in 2024 at 1201 Connecticut Avenue NW, which is being converted into approximately 161 rental residences plus retail space.

Property and Project Details

The building at 1090 Vermont Avenue NW was constructed in 1979 and comprises approximately 155,400 square feet of gross floor area across 12 stories above grade and three basement levels, on a site of approximately 14,810 square feet. The planned residential program totals approximately 150 units, with the unit mix consisting of 30 studios, 54 one-bedroom units, 63 two-bedroom units and three three-bedroom units. The redevelopment will also include retail space and parking.

The property sits approximately three blocks from the White House on Vermont Avenue, near two Metro stations with access to four rail lines. The Sankei Building Co., Ltd. said the design will take advantage of the building's open frontage along Vermont Avenue, incorporating newly added balconies in select units oriented toward the White House area. Planned shared amenities include a rooftop terrace, clubroom, coworking space and pool deck.

Market Context: D.C. Office Vacancies Drive Conversion Activity

The project is being launched against a challenged Washington office market. Overall office vacancy in Washington, D.C., stood at 21.9% in the second quarter of 2026, down only 10 basis points from 22.0% in the first quarter. Elevated vacancy reflects the continuing effects of hybrid work patterns, federal-government space reductions and tenant consolidation — conditions that have made older office buildings more attractive as conversion candidates.

The District government has responded by expanding incentives and support programs for converting office buildings to residential use, seeking to reduce excess office inventory while adding housing in the urban core. The 1090 Vermont Avenue project aligns directly with that policy framework.

Washington office asking rents averaged $54.85 per square foot on a full-service basis in the first quarter of 2026. However, elevated headline rents have not eliminated economic pressure on aging office stock, where concessions, tenant-improvement costs and reduced demand can materially weaken asset values.

Sankei Building's U.S. Expansion Strategy

Kazunobu Iijima serves as President and CEO of The Sankei Building Co., Ltd., which is headquartered in Otemachi, Chiyoda-ku, Tokyo. The company announced the 1090 Vermont Avenue venture on September 7, 2026, describing it as part of a broader effort to create residential value by transforming existing building stock in Washington, D.C.

The two Washington projects together reflect a strategy centered on acquiring older, well-located office buildings during a period of weak office-market demand, reusing existing structures rather than pursuing ground-up development, and building a repeatable operating relationship with a local partner familiar with Washington-area entitlements, construction and leasing.

Duball, LLC was founded in 2004 by Marc Dubick and Steven B. Alloy. The company focuses on rental and for-sale residential, commercial, hotel and conversion projects primarily in the Washington-Baltimore metropolitan region, and reports more than 3 million square feet developed and approximately $1.25 billion of real estate assets developed.

Competitive Positioning and Execution Considerations

The 1090 Vermont Avenue project enters a Washington apartment market where adaptive-reuse proposals are increasingly competing with conventional multifamily supply. The location near federal agencies, commercial offices and cultural institutions, combined with transit access to four Metro lines, broadens the potential renter pool. One- and two-bedroom apartments together account for 117 of the planned 150 units, or approximately 78% of the total, with the project positioned in the luxury rental segment.

Office-to-residential conversions carry execution risks distinct from conventional apartment acquisitions. Existing floorplates, window placement, structural systems, fire-life-safety requirements and historic-preservation constraints can affect residential layouts and construction costs. The Sankei Building Co., Ltd. said it intends to draw on conversion expertise gained through its first Washington project and its experience working with Duball, LLC as a local partner.

Washington, D.C., is home to embassies from approximately 186 countries and serves as headquarters for major international organizations including the International Monetary Fund and the World Bank. The city contains 84 museums, including the Smithsonian, and numerous historic preservation districts.

Timeline

The joint venture agreement and acquisition of 1090 Vermont Avenue NW closed July 15, 2026. Construction is scheduled to begin in November 2026, with project completion targeted for the first half of 2028.

Sources: The Sankei Building Co., Ltd. press release, September 7, 2026