Is there an apartment glut?
Is there an apartment glut?
Most everyone in Washington real estate agrees that apartments are being added at a blistering rate. More than 35,000 units are in the pipeline. And the pace of new units getting built each quarter has not slowed, with work starting on more than 3,100 new units in the third quarter alone, more than double the average.
What everyone does not agree on is whether there is a glut forming and a bubble on the horizon. Apartments in Arlington, NoMa, Shaw and elsewhere continue to get leased, with only a slight decline in rents. Some say the demographic influx will keep the apartment party going, others see dark clouds.
Metro for Tysons Corner.
The Silver Line is set to begin running through Tysons Corner in the first half of 2014, although exactly when is anyone’s guess. Once the trains are running, everyone will get a chance to see not only how many Tysons employees will use Metro to get to work, but also whether the Silver Line prompts people to rent apartments in a number of high-rise buildings under construction along its path.
For all Tysons has — two dominant shopping malls, Fortune 500 companies — it has little in the way of housing catering to millennials. Will they call Tysons home once the Silver Line comes through?
Redevelopment of shopping malls.
No one is building enclosed shopping malls anymore because, aside from a few dominant locations, shoppers are moving elsewhere. The shift has caused malls across the country to close, leaving some of them vacant and boarded up. The Washington area’s wealthy demographics mean that when malls here fall out of favor, their owners plot massive overhauls, sometimes converting them into town square projects. Upcoming examples are in White Flint, Springfield, Ballston, Alexandria and Landover.
Transportation as economic development.
Local jurisdictions are pushing a bevy of transportation projects sometimes aimed not as much at alleviating traffic as trying to create buzz and development. Montgomery and Prince George’s counties are betting on the Purple Line light rail to revive areas between Bethesda and New Carrollton. D.C. and Arlington are trying to launch streetcar lines. Alexandria may add a Metro station at Potomac Yard. If the projects are as popular as their backers suggest, more will likely follow.
Grocery store and movie theater wars.
It wasn’t so long ago that you had to go to a mall or shopping center to see a movie or do your grocery shopping. Now theater operators and grocers are signing up for spots in mixed-use developments in the District, Bethesda, White Flint and Alexandria as fast as spaces become available. Once there were too few in many locations; soon there may be too many.
It will take years to build a new headquarters for the FBI and redevelop the site where the J. Edgar Hoover Building is today, but the General Services Administration plans to set much of the trajectory in motion. The GSA already has received site proposals. It expects to make a short list of locations in March, and simultaneously begin the process for selecting a development partner. Expect much political jockeying in the interim.
The Alexandria Waterfront
Old Town Alexandria isn’t known for making dynamic changes. But with a new waterfront plan, a reelected mayor in William D. Euille and the sale of two industrial warehouses along the Potomac River there, means new hotels, housing, shopping and maybe even museums are on their way to Old Town.
D.C. United stadium.
D.C.’s Major League Soccer team has been trying to get out of RFK Stadium for years, and this is the closest it’s gotten. Mayor Vincent C. Gray’s administration has a plan to pay half the cost of a stadium on Buzzard Point, and a city administrator, Allen Lew, has the résumé to get it done. Gray, a sports fan, has also said he would like to help Washington Wizards owner Ted Leonsis build a new basketball facility. But will Gray be reelected?
Completion of two massive downtown projects.
CityCenterDC and the Marriott Marquis both took nearly a decade of work and hundreds of millions of dollars to pull off, and now this year they will be completed. Will the projects live up to expectations? CityCenterDC’s office space was quickly leased, and there are good signs for its apartments and condominiums, but developer Hines has been secretive about its massive retail lineup. The Marriott Marquis has long been touted as a panacea for the convention center’s performance, but can it deliver on the promise?
GSA continues push for savings.
Dan M. Tangherlini pulled off high-profile deals to lease the Old Post Office to Donald Trump’s company and sell a Georgetown heating plant to a developer working with the Four Seasons. Meanwhile, Tangherlini’s behind-the-scenes work of forcing agencies to take smaller, less expensive and often less convenient space continues to have a dramatic impact on real estate in Washington. Still, there are some major consolidations that are up in the air, among them whether the Department of Homeland Security will ever move to St. Elizabeths Hospital and whether the Nuclear Regulatory Commission will remain in White Flint.