Jemal Real Estate Strategies and DivcoWest have announced a joint venture to convert a Washington office building into housing, with Madison Realty Capital providing a $40 million loan for acquisition and predevelopment. Announced on October 7, 2026, the venture centres on 1255 23rd Street NW in the city’s West End. The arrangement brings Jemal Real Estate Strategies into a project with the property’s existing owner, DivcoWest, which will keep an equity stake alongside its venture partner.

The partners propose turning the 342,000-square-foot building into approximately 323 apartments, with up to three dozen affordable units included in the project. Those figures describe the intended scale of the conversion, rather than a completed development or a final housing count. The financing has a similarly defined purpose: the $40 million loan supports acquisition and predevelopment. It is not identified in the supplied excerpt as either the property’s purchase price or the full cost of delivering the apartments.

The venture combines a change in the building’s proposed use with an ownership arrangement that preserves DivcoWest’s participation. Rather than leaving the investment altogether, the current owner will hold equity alongside Jemal Real Estate Strategies, referred to as JRES in the announcement. No size is given for either partner’s interest in the supplied excerpt. The information therefore establishes that both firms will participate as equity holders, but does not show how ownership, control or financial exposure will be divided between them.

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DivcoWest is part of DivCore Capital and is described as a vertically integrated real estate firm investing across multiple asset classes in the United States, primarily in innovation markets. That provides corporate context for its involvement, although the supplied excerpt does not detail a division of responsibilities for this conversion. The stated roles are clearer on ownership and lending: DivcoWest is the existing property owner and continuing investor, JRES is its venture partner, and Madison Realty Capital is supplying the acquisition and predevelopment loan.

The housing rationale comes from DivcoWest managing director Nico Papageorge, who presented office conversions as a way to help meet urban housing needs. He said the combination of the partners’ capabilities would support the creation of affordable and market-rate apartments and the property’s long-term positioning. His comments frame the project around both housing provision and the future of the property. They do not, however, supply a financial forecast, expected rents or a timetable for completing the proposed change of use.

The proposed apartment count and the existing building’s size offer separate measures of the project’s scope. The 342,000-square-foot figure describes the office property, while approximately 323 apartments is the residential outcome the partners envisage. The supplied excerpt does not provide apartment sizes, a unit mix by apartment size or a breakdown of space under the conversion plan. As a result, the figures establish the scale of the asset and the intended housing programme without explaining how the building would be configured for residential use.

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The affordability component is expressed with an upper limit rather than a precise unit count: the project is to include up to three dozen affordable apartments. The supplied material does not specify income-eligibility rules, rent levels or how long any affordability conditions would apply. Those omissions leave the terms of that housing component undefined in the excerpt. The stated plan nevertheless makes clear that the venture envisages both affordable accommodation and market-rate apartments within the same conversion.

For the financing, the distinction between early-stage funding and the wider development budget is central to reading the $40 million figure. Madison Realty Capital’s loan is expressly tied to acquisition and predevelopment, not described in the supplied excerpt as financing the entire conversion. The excerpt gives no interest rate, maturity or other loan terms, and no total project budget against which to assess it. It also does not set out the amount of equity the partners are contributing or identify a separate construction financing package.

The supplied excerpt offers the partners’ case for the project but contains no competing assessment from residents, public officials or other investors. It therefore provides no basis for claiming either broader support or opposition. The available evidence is narrower: the companies have announced a venture, identified its lender and outlined a residential proposal. Papageorge’s assessment explains DivcoWest’s reasoning, while questions about costs, delivery and the detailed housing offer remain unanswered by the material provided.

What comes next is less defined in the supplied material than the ownership and initial financing arrangement. The loan’s stated purpose places acquisition and predevelopment at the centre of the announced funding, but the supplied material gives no construction start or completion date. For now, the venture’s disclosed framework is a continuing equity interest for DivcoWest, a partnership with JRES and Madison Realty Capital’s $40 million loan for acquisition and predevelopment, supporting plans to convert the West End office property into approximately 323 apartments.