When Nationals Park opened in 2008, District officials said it would bring new life to a long-neglected stretch of the city.
Then the recession hit. The cranes went away. Foreclosure notices were filed. A gaping hole in the earth was abandoned right outside the park.
Now much of the promise has arrived. More apartments are going up in the neighborhood around Nationals Park than perhaps anywhere else in the Washington area. Every few weeks, a new restaurant arrives. Harris Teeter opened last fall and Whole Foods is on the way.
But one group has lagged behind: large employers, the companies that would fill the many office buildings developers have planned for the area.
The vacancy rate for offices is about 12 percent, reflecting a regionwide slowdown. And although 1,600 apartments, 71,000 square feet of retail space and three hotels are under construction, no one is building any office space.
Why have companies been so slow to move in?
“I personally think it’s improving,” Robert W. Ward, executive vice president of Skanska Commercial Development, said of the market. He said the recession left a lot of projects hanging but that more companies seemed interested in taking a chance on the neighborhood now.
“It took some time for those early buildings to get leased up,” he said. “But the vacancy rate is really not that high if you dig into it. If you’re a tenant of 100,000 square feet, there aren’t a lot of options for you.”
Skanska is planning an office building at 99 M Street SE.
An earlier argument against the neighborhood — that there wasn’t much to do there — has been undermined by the fact that people don’t just come for ballgames anymore.
When there is a weekend festival or concert at Yards Park, part of a half-mile of Anacostia River waterfront, you can bet it will be packed. Visitors took nearly 300,000 trips to the neighborhood last year for things other than Nationals games, according to the Capitol Riverfront Business Improvement District.
But given the office vacancies, some of the area’s biggest developers have hit upon a creative solution to filling their buildings: placing their own employees in them.
The movement began in 2004, when William C. Smith & Co. completed its first office building in the neighborhood, at 1100 New Jersey Ave. William C. Smith’s headquarters landed there four years before the first pitch was thrown at Nationals Park.
More than a year ago, Forest City Washington, the local offices of the Cleveland-based real estate empire Forest City Enterprises, moved its offices into 301 Water St. SE, a building wrapped in glass overlooking the park and the river.
The developers of the Wharf, the $2 billion project on the Southwest waterfront, tried to get firms that included The Washington Post Co. to relocate there. The Post decided to remain downtown, but both developers — PN Hoffman and Madison Marquette — have moved to Water Street permanently.
“With the residential, retail and restaurant activity on the Wharf, along with the central location and transportation options, both companies have long-term plans to stay,” said Julie Chase, a spokeswoman for the project.
Most of the development companies do not have more than 50 to 100 employees, so it’s not as if they can fill their own buildings. Often the relocations are borne instead out of convenience and marketing. William C. Smith and Forest City are building massive mixed-use projects nearby. Working next door makes for a short trip to get progress updates or to show properties to investors or potential tenants. It also gives developers an extra level of credibility when they pitch the neighborhood to other companies.
A cluster of government contractors has settled in around the Navy Yard, and last week developer Monument Realty announced that it had landed a deal to build the headquarters of the National Association of Broadcasters at South Capitol and M streets.
“We have been involved in the redevelopment of this area for more than 10 years and having NAB commit to One M Street confirms that this neighborhood has arrived,” Monument principal Michael Darby said in a news release.
The president of the broadcasters group, Gordon Smith, said he was “delighted to have found a home in a vibrant section of Washington so close to the Capitol.”
Two other employers, CBS Radio and National Labor Relations Board, have agreed to move as well. They will occupy a building, 1015 Half Street SE, that was vacant for more than three years after it was completed in 2011.
Akridge, the D.C. development firm based downtown, designed and planned an office project for Half Street Southeast across the street from Nationals Park, where the Fairgrounds outdoor party spot operates. Akridge marketed the project by asking: “Do You Work on the Cutting Edge?”
But after years of trying to lease the office project and finding no takers, Akridge and its investors decided to move on, selling a majority of the site in February to a competitor, the JBG Cos.