With the new Washington Convention Center just opened at Mount Vernon Square, and million of square feet of office, retail, and residential facilities under construction in the city, the District is going through a time of immense physical transformation. Robert O. Carr is responsible for more than his share of that transformation.
Carr is president of CarrAmerica Urban Developments LLC, a Washington-focused subsidiary of national real estate investment trust CarrAmerica Realty Corp. By some measures, CarrAmerica is the most active developer in the District today. CarrAmerica Urban Developments is building Terrell Place, a mixed-use facility in the former Hecht's building across from the MCI Center, and a new headquarters for the International Monetary Fund at 1900 Pennsylvania Avenue NW. It is the developer for the planned Newseum complex at 6th Street and Pennsylvania Avenue, and with Douglas Development plans a large office building on the site of the historic Atlantic Building at 950 F Street NW.
Late last week, he discussed development trends in Washington.
Q Everyone talks about the impact the new convention center will have for the tourism industry. What does it mean for the commercial real estate industry?
A I think commercial real estate gets an indirect impact. I think it's really going to make business activity in the city pick up, which will increase the revenue base and the number of people on the street. And certainly the commercial building industry is going to benefit from the city being a more healthy place, a more active place economically. But does the convention center expand the borders of where commercial builders can develop?
It's one of many dynamics that are going to push development further to the east and perhaps further to the north as well. The traditional downtown as we know it is getting close to being built out. We're already linking up the [central business district] with Union Station.
The opening of the new convention center leaves available the site of the old center for redevelopment. As officials move forward to develop that site, what would you like to see happen with it?
My emphasis would be on cultural, retail, office and housing uses. I think the city is largely on the right track there. But a lot of the benefits will depend on the quality of the execution, and they're just beginning to enter that phase of the work. It does have tremendous potential.
We've seen tremendous change in downtown Washington in the past decade, including MCI Center and a remarkable amount of new construction. What pieces are still missing from the puzzle?
I would say the two areas that would really help fill out the picture of downtown are an emphasis on the retail strength of the F Street [NW] corridor, and cultural development that would draw people north of the Mall. A lot of things have been accomplished. Never in my career in the city have we seen so many things happening at one time. All these things are helping galvanize interest in downtown.
You keep stressing the importance of cultural, retail, and other kinds of developments. What benefits do those sorts of facilities provide to the office business, in which you specialize?
People like working in a dynamic 24-hour neighborhood that has good mass transit access and vitality on the street. D.C. is fortunate to have all these different qualities in place and improving. Those are the things that drive continuing growth in office rents and property values.
The District has long had a reputation for not having very effective economic development apparatus. How is the Williams administration's economic development team doing, as well as quasi-private groups like the National Capital Revitalization Corp.?
I think the sophistication and intelligence of the administration's ability to engage the development community and do thoughtful planning to target different parts of the city for growth has come a long way. This team deserves high marks. They've been thoughtful in projects they've decided to support, including unilateral support for the Newseum, the Spy Museum and things like that. I think NCRC is really an unknown in terms of how effective they'll be. They don't have much of a profile today in successfully getting development to go forward.
There are about 3 million square feet of office space under construction in the District in a time when job growth is essentially flat. Are we heading toward a glut of downtown office space?
Certainly we would all like for the economy to be stronger and creating more jobs. But we're still seeing a willingness to plan and make future commitments in some of the big tenant communities. Law firms in particular are still making space commitments. We still see signs of health. Given how difficult it is to find new sites, and build new product, I don't think you'll see an oversupply that will have much significant impact. The whole world is sharing information quickly about vacancy and underwriting. And the financing community is a continuing disciplinary force. It's just not the same situation as it was in the late '80s.
Neil Irwin writes about commercial real estate and economic development every week in Washington Business. His e-mail address is firstname.lastname@example.org.