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Against tide of micro-units, developer plots hundreds of apartments for families

As millennials poured into Washington and its close-in suburbs during recent years, real estate developers — seeing trends toward smaller units in urban locations — began building tens of thousands of units catering to them.

Sleek towers of tiny, pricey units with granite counters inside and rooftop pools outside began going up on H Street, in NoMa, Clarendon and the Potomac Yard area of Alexandria.  The “Manhattanization of D.C.” had begun, and every company seemed to have the same playbook.

Now a developer in Silver Spring is trying something different.

The Blairs complex, in Silver Spring. (Courtesy Tower Cos.)

Before the terms “mixed-use” or “transit-oriented development” came into vogue, the Blairs, built in the late 1950s and 1960s, combined more than 1,300 apartments with a Giant grocery store and restaurants within walking distance of a Red Line Metro station, which opened in 1978.

But now the project, located just over the line from the District between Eastern Avenue, Colesville Road, East-West Highway and Blair Mill Road, looks out of date. Early last year executives from the Tower Cos. began plotting a redevelopment that would add a central park, new retail and thousands of new apartments.

What they haven’t done, however, is pitch micro-units or buildings full of studios, “junior one-bedrooms” or micro-units, some as small as 330 square feet, as many of their competitors are doing.

Of the first 504 units Tower plans to build, only about half will be studios or one-bedroom units. Many of those will be 50 percent larger than competitors’ units, said Sri Velamati, vice president of development at Tower

The other half will have two bedrooms, two bedrooms plus a den or possibly something that has nearly gone the way of the dodo bird in Washington commercial real estate: three bedrooms. This at a time when major local apartment developers such as Kettler are building 85 percent of units in some buildings as studios and one-bedrooms, with smaller square footage than ever before.

“Everybody uses the ‘M’ word– everyone’s going after the millennials,” Velamati said. “What we’ve said is that’s great, but that’s probably not the direction for us.”

Although Tower will likely have to charge less per square foot than companies building smaller units, Velamati gave a couple of reasons for the strategy.

A rendering of the Blairs after redevelopment. (Courtesy Tower Cos.)

While other companies sell their buildings as soon as they are leased, Tower, a family-owned firm based in Rockville, doesn’t plan to sell the Blairs. It has also found success retaining residents for many years, some of them changing units as they got married, had children, became empty nesters and retired.

He also thinks there is a booming market for couples who are having children but who cannot afford to buy a home with good schools in the District or close-in suburbs. “You have a huge demographic that says let me get out of here, and tries to find some small starter home or rent a home, and they can’t,” he said.

Building the same mix of units at the same time as dozens of other companies also just didn’t seem to make sense. “If 40 people are all doing it, it doesn’t necessarily mean that it’s right. It might just mean that 40 people are doing something that is pretty stupid,” he said.

Tower presented its plans for its first two buildings, which will replace some the complex’s older, low-rise apartments, on June 10, and to this point the company has been getting a warm reception from county officials. Although the first phase does not require new zoning, it will require county approval.

“I fervently hope that those units will vary in size,” said County Council member Cherri Branson. “All the new development is great but I think in order to ensure some long-term stability you have to plan for families too. And I think the way to plan for families is to make sure that some of the units are different sizes.”

Sri Velamati of the Tower Cos. (Evy Mages/For The Washington Post)

Due to the county’s inclusionary zoning rules, at least 12.5 percent of the apartments at the redeveloped Blairs will be offered at below market rate rents. Green areas, rather than split into tiny pockets good for sitting and talking but little else, have been re-assembled into a larger central park, better for, say, throwing a baseball or football.

Gwen Wright, the county’s planning director called it “one of the most exciting development projects that we have being planned in Montgomery County.” She said when she toured some of the existing buildings on a recent afternoon she couldn’t believe how many children she saw.

“Literally every floor that we went to had a family with a child coming home from school,” she said. “There were three or four families that each had their eight- or nine-year-old kid. I was really struck by that. I think we do traditionally think about apartments and rentals as not being something that families focus on, but I really do think that’s beginning to change.”

A rendering of the first new buildings. (Courtesy Tower Cos.)

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.



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Jonathan O'Connell · June 18, 2014

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