Between 1960 until it ceased internal homebuilding operations in 1994, affiliates of Artery constructed over 12,000 homes in the Washington DC suburbs. At its peak in the late 1980s, Artery was constructing and selling over 700 homes per year, with a focus on entry level homes. Artery’s innovative designs and attention to the buyer’s desires enabled it to become one of the largest homebuilders in the Washington, DC metropolitan area. Artery ceased homebuilding operations in 1994 and Artery’s investment affiliate now provides debt and equity financing to homebuilding companies.
Between 1962 until it sold its remaining apartment portfolio in 2006, affiliates of Artery developed or acquired and renovated over 13,000 apartment units, which were either managed directly by Artery’s management team or managed in partnership with other professional residential property management firms. The disposition of the Artery apartment portfolio included the tax-advantageous contribution of several communities to Equity Residential Properties Trust (ERP) in exchange for an interest in ERP that is still maintained by affiliates of Artery. Henry H. Goldberg, the founder and owner of Artery, was a member of the Board of Directors of ERP for eight years.
Artery was one of the first companies to offer large washers, dryers, and microwaves in its apartment units. Artery’s high customer satisfaction ratings from its renters benefited its homebuilding operations as many renters at Artery properties eventually bought a house at an Artery development. Artery was a marketing innovator, offering unique discounts for referrals and military personnel. On the financing side, Artery was an innovator in the use of low-cost HUD financing and tax exempt bonds, which enabled it to earn a higher rate of return than competitors.
Between 1983 and 1993, Artery partnered with the Charles E. Smith Companies (now JBG Smith) to develop four Class A office buildings in the Washington, DC suburbs: 7200 Wisconsin Avenue (Artery Plaza), Arlington Courthouse Plaza II, One Democracy Plaza, and Fairfax County Government Center. Artery’s buildings featured a very innovative design; Artery Plaza was chosen as the Most Outstanding New Office Building of 1986 by Montgomery County, Maryland. Artery sold its office building portfolio before the financial crisis of 2008 and Artery’s investment affiliate currently invests in office buildings through private real estate funds and joint ventures.
Between 2000 until it sold its remaining land under development in 2013, Artery affiliates formed strategic partnerships with major national and local homebuilders to acquire and develop residential subdivisions comprising over 5,000 lots in the Washington, DC suburbs. Artery managed the entire land development process including site selection, acquisition, design, programming, obtaining land use approvals, budgeting, obtaining financing, constructing all site improvements, and marketing and selling the finished lots. Affiliates of Artery continue to own the rights to collect annual “front foot benefits” (deferred payments for water and sewer infrastructure installation) from more than 2,500 homeowners in Maryland, providing a predictable long-term source of recurring cash flow.
In 2000, Artery developed a Safeway-anchored 125,000 square foot Class A shopping center in Germantown Town Center, Montgomery County, Maryland. The shopping center, which generally maintained a 100% occupancy ratio, is adjacent to a 328-unit apartment complex and 228 residential lots also developed by Artery affiliates. Artery sold the shopping center and Artery’s investment affiliate currently invests in retail properties through private real estate funds.
In 2003, in partnership with Pinnacle Hotel Management Company, Artery developed the Homewood Suites by Hilton Columbia, a 150-room hotel that remains under the ownership of an Artery/Pinnacle joint venture. After the 2008 recession, Artery took advantage of a decline in real estate prices to make additional hotel investments and, in partnership with Urgo Hotels and Pinnacle Hotel Management Company, affiliates of Artery maintain investments in the 253-suite Washington Dulles Marriott Suites, the 219-room Fort Lauderdale Marriott Pompano Beach Resort & Spa and the 329-room combination Courtyard Montreal Airport and Residence Inn Montreal Airport.
Real Estate Financing
Through its partnerships with lenders and residential developers, Artery, through its investment affiliate, provides capital to residential developers and renovators in Washington, DC.