Amer Hammour knows that in many ways his legacy will be tied to The Wharf, the $2.5 billion mixed-use development that has redefined the waterfront of Southwest Washington, D.C.

But with the project in its final phase of development, the affable founder and executive chairman of Madison Marquette is quick to note his firm is more than one development. And, Hammour stresses, more than a developer.

"You know we manage 350 properties," Hammour says, sitting in a conference room at his offices overlooking The Wharf where he spoke with CoStar News. "We have invested in somewhere between 30 to 40 properties. But everybody talks about The Wharf."

What Hammour aspires to, what he spends much of his time on these days, is building a firm that can invest in, develop and manage real estate on a grand scale.

"I'm excited that The Wharf is great, but people tend to then think of us as a ground-up developer and operator. And we're not. We're an integrated investment company. We're an integrated services company."

Still, there's a reason The Wharf gets so much attention. Before the project took shape, the D.C. waterfront seemed a largely unremarkable place, home to an active fish market, boat docks and a few big-box restaurants. Drab government buildings and 1970s-era communities surrounded it. A developer brought in to remake the place had just gone bankrupt when Madison Marquette partnered with local developer PN Hoffman, now Hoffman & Associates, to give it a go.

The partners proposed transforming the space into a mini city of offices, restaurants, live event spaces, hotels and residences. Hammour's special insight was to propose building all of that at once, as part of one big, risky phase one.

"Initially the plan was to have many phases, like five phases. I said this was never going to work. We need to start with a very large phase, as large as we can have. Because the area is not recognized as an office area, as a residential area," Hammour says. "If you don't have enough of a something, people won't come here. And you're gonna kill yourself. So you need to have something that has real impact."

Hammour says building the first phase of the project as an integrated whole was not easy. A project that complex made it more difficult to finance "because now we're in the billions of dollars."

"But," Hammour says, "if you had done this building by building, you'd be dead."

Lessons Learned

Hammour isn't surprised how The Wharf has taken off since the Foo Fighters headlined opening night at The Anthem, the waterfront's entertainment anchor, in 2017. The Wharf now bustles with activity. The offices, residences and restaurants are filled. The project has been so successful Madison Marquette and Hoffman & Associates broke ground in March on the second phase. Backed by equity partner and Canadian pension fund PSP Investments, the second phase is projected to deliver an additional 1.45 million square feet of offices, apartments, hotels, retail and a marina upon its completion in 2022.

As the firm transitioned to the second phase of development, Hammour says there were several clear takeaways from the first round of construction. For starters, the team proved new office space could be desirable when it is located in the right environment, even at a time when businesses and law firms around the city are downsizing and leasing less space.

"Not only do you have great views, but now you have all these amenities that the young employees want, right? You have all these amenities, you have all these restaurants, you have a great theater. And you have access to the airport, so if you are an association this is easy to have meetings. And we were successful in getting some really great tenants."

The first phase also shed some light on the residential market. Good views and amenities can sell condominiums, too. "So we reoriented," Hammour says. "We probably upscaled a little bit from the first phase to the second phase because there's demand."

The firm also learned that when it comes to retail, it's restaurants, entertainment and impulse retail that works. "People don't come to The Wharf for" traditional shopping center purchases, says Hammour. "We're gonna try to create that [active retail] in the second phase, but we have to be careful."

Fashioning what has become a regional destination hasn't been without its hangups.

"Parking is an issue with the first phase," Hammour laments. "It's complicated. All my friends who come say, 'Why don't you have more parking?' I say, 'It's not that easy!' [But] we've learned how to improve that."

Included in the plans for the second phase are a pair of underground garages slated to bring an additional 1,000 parking spaces to The Wharf.

"And unfortunately," Hammour says, "we learned that construction costs have gone up like 30%."

'We're Not A Developer'

Madison Marquette has been around since 1992, with Hammour running the real estate activities of Capital Guidance, an international investment company that owns Madison Marquette, since the early '80s. The firm has grown to 630 people in 14 offices across the country, built on a platform that includes investment, management, development, leasing and construction services.

As much praise as the firm has received for The Wharf, Hammour stresses development is simply one component of the business.

"We're not a developer, we're not a local developer," Hammour says. "We have that capability, but we want to do it as part of an investment program. And for development projects, we are going to be very picky where we think we can make a significant impact."

An investor at heart, Hammour says he prefers to buy properties and fix them up versus developing them: "It's less pain and frankly you can make the same returns, [internal rate of return]-wise."

As Madison Marquette has grown in size and reputation, he attributes its success to a versatile, hands-on approach that emphasizes placing teams on the ground that can provide an array of services in market. It's only by bringing that kind of attention to a problem that an owner can reposition a property like, say, a struggling retail center, he says.

"You can't do that with brokers," asking them simply to find new tenants, Hammour says. "Brokers, they're like wolves. They eat what they kill. And they’re great at that. But they’re going to do the easy stuff, and you're going to be left with the stuff you really need in order to make your retail property work."

Hammour says he admires companies like Hines out of Houston, or asset management giant Brookfield, in combining capital and brains to bring about needed transformations.

"They're spending the money and they're spending the effort and the focus to change their properties into what actually works today from a retail point of view. And they're succeeding," he says.

In the same way at Madison Marquette, "we need to have the people that we can direct and put on things," Hammour says. "We can't just outsource everything."

'Do You Know Bruce Springsteen?'

At roughly 3.2 million square feet, The Wharf is the largest project Madison Marquette has done up to this point. But others are no less complex.

"We are working on two other Wharfs," he says, including a longtime project in Asbury Park, New Jersey.

"Do you know Bruce Springsteen?" Hammour says. Asbury Park is the Atlantic seaside town "where Bruce starts all of his concert tours."

Madison Marquette and investment partner iStar Financial for a decade have been managing and developing roughly a mile of coastline the venture owns along the historic Asbury Park Boardwalk. There, the partnership has helped revitalize the beachfront area and still has roughly 400,000 square feet of potential commercial development in the works.

Asbury Park "is like the hole in the doughnut. You go north and you have Deal, which has homes in the $3 million to $10 million range, you go south and you have Ocean Grove. Again, very expensive. And this area, because of politics, had been neglected, and was scary when we approached it.

"So Asbury is one area that we're really focusing on. Is Bruce an investor? No, but I think he would recognize that we brought the city back."

The second development is one the company just started working on, and sits closer to home. That project is the massive redevelopment of the Armed Forces Retirement Home, the nation’s oldest continually operating retirement home for enlisted military personnel.

Madison Marquette and local development firm Urban Atlantic were provisionally selected in November to develop 80 acres next to Catholic University and the Washington Hospital Center in Northwest D.C. for 4.3 million square feet of mixed-use space, though Hammour says it probably won't be an entertainment destination like The Wharf.

"It's different, Hammour says. "It's a mixed-use project, but it will have more residential."

In addition to residences, the venture's early concept includes hotels, medical facilities and affordable housing. However, Hammour says the team is also looking into taking a part of the existing facilities and "creating a resort in the middle of the city."

"We're still working on that plan," says Hammour. "It's very early."

Another Washington-area project the company is looking into is the redevelopment of the Del Ray North shopping center in Alexandria, Virginia. The company filed preliminary plans earlier this month to redevelop the site into a mixed-use complex with 624 apartments and 44,500 square feet of street-level retail.

Though Madison Marquette's core specialty is urban retail and mixed-use, the firm's investment portfolio includes a wide array of commercial properties including office, multifamily, medical space and senior living. And what the firm ultimately provides for its investors and clients, Hammour says, is healthy returns.

"Some of the local developers, my partners Urban Atlantic or Hoffman, are better at what they do. They deliver project after project. We're better at creating value around the development."

Five Years From Now

Hammour's end goal is clear. He wants his firm is to become a broader real estate enterprise. In March, Madison Marquette acquired The Roseview Group, an institutional real estate investment and advisory firm out of Boston. He tapped Roseview Chief Executive Vince Costantini to serve as CEO of the combined firm "so I could step back" to manage some strategic projects, work on international expansion and take the company forward. That merger followed the firm's acquisition of Houston-based PM Realty Group, a powerhouse in property management and landlord representation.

Looking ahead, Hammour says he expects senior living, more often confined to the suburbs, to start making its way into downtown. "I think my generation doesn't want to be forgotten in some elderly house," Hammour says. "They want to be where the activity is, but they want to have some care."

He also has been promoting the firm's corporate services platform that works with owners to improve their properties.

"We don't sell their properties, we're not an investment broker. We probably will have that some point," Hammour says with a laugh. "We're really more, 'Hey, you have a bank branch. There's land around it. We can re-entitle this thing, change your bank branch and create a lot of value for you. And we'll share'" in the success.

Madison Marquette also now invests in medical properties and has a medical team that specializes in medical office, smaller hospital facilities, as well as senior living.

Hammour says he continues to be on the prowl for other opportunities.

"I look at people that I admire. It's the people who basically do what we do, but have been successful at building substantially — Hines, Jeff Hines, Brookfield — all of these guys started as basic real estate people and went into the investment area and expanded and built on that platform. Today, that's kind of what the world wants," Hammour says.

"They don't want these allocators. They want people who have all the capabilities in house."

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