“I think the first half of 2013 looks a lot like the second half of 2012,” said Greg Meyer, senior vice president at Brookfield Office Properties, a major owner of commercial real estate in the region. Government stagnation means so many other real estate decison-makers will keep their fingers on the “pause” button before inking new deals. When tenants do start making choices, Meyer said, they will have the opportunity to be picky. The buildings with the best design, in the best location, with the best amenities will have a greater advantage than ever.
“I think that it’s going to be a year of winners and losers,” he said.
What will be the other dominant story lines of commercial real estate this year in Washington? We chose 10, told here through the stories of some of the properties we will be watching most closely.
The fate of the $950 million development on the site of the District’s former convention center is large enough that it could shift the market for offices, housing and retail downtown.
The project’s ability to attract office tenants has cemented the notion that employers are willing to relocate for more efficient, modern office space. CityCenter has 90 percent of its 515,000 square feet committed, according to lead developer Hines. Others then followed suit, with Boston Properties landing Arnold & Porter for its planned building on Massachusetts Avenue NW and Akridge and Mitsui Fudosan America drawing Pillsbury Winthrop Shaw Pittman to its rehab project at 1200 17th St. NW.
If newly built offices remain popular with law firms and other tenants in 2013, another set of projects — downtown, in Mount Vernon Square, NoMa and maybe even Capitol Riverfront — could find similar success.
Outside of Tysons Corner and White Flint, the mixed-use Edens project in Merrifield might be the region’s most ambitious remake of an auto-oriented area into a walkable, transit-oriented urban neighborhood. There have been hiccups — such as the public spat with chef Jeff Black that led him to cancel his massive Oyster House restaurant — but Edens has blazed a path others are likely to follow.
Where will the next urban in-fill projects come? Developers of the Southwest Waterfront are in search of major equity partners that could make that project a reality in short order. And there are big plans for Potomac Yard, along Route 1 in Northern Virginia, and at PenPlace, the Vornado project near Pentagon City. Plans to remake malls in Springfield, White Flint and other areas are likely to advance as well.