Bob Buchanan is ready to bet on the Loudoun County housing market again.
In 2007, Buchanan’s mixed-use Arcola Center project was going to be the next big thing in a thriving Loudoun County. On 400 acres immediately west of Dulles International Airport, in southeast Loudoun, his Buchanan Partners planned 2 million square feet of commercial space, more than 1,000 homes and 800,000 square feet of retail around a new “main street” that would feature a Target, Lowe’s, Staples and Dick’s Sporting Goods.
Buchanan agreed to help finance a restoration of a stone building that once housed slave quarters as part of the project and the county approved his plans in early December 2007.
Then came the bust.
Like a lot of developers, when the housing bubble burst and the financial crisis hit, Buchanan said he hustled to pay off debt and begin what projects he could. “You take a deep breath, you take a look at all the things you have commitments to, financial commitments, and make sure those are in order and then try to move ahead on what you can,” he said.
Arcola was not on the list. Pegged for the area northwest of the intersection of Loudoun County Parkway and Route 50, he put the project on the shelf. But unlike other owners who lost major land deals to foreclosure or through bankruptcy, Buchanan held on and says he is finally ready to break ground on some of the townhomes this month. He brought in Reston-based NVR Inc., which builds homes through its Ryan Homes and NVHomes banners, as a partner.
According to sales data, home prices in Loudoun are still sliding. The median sales price for single family homes in 2005 was $611,638, when 10,606 homes sold. By 2010 the median sales figure was $390,000 with only 5,008 sales. Through July of this year, the median price was still ticking downward, to $378,917, though prices have shown some improvement in the Zip code where Arcola is located.
But Buchanan, one of the founding members of the regional business organization the 2030 Group, sees growth coming for the Washington area and says he wants to be ahead of it.
“There are a couple of phenomenons we have going for us,” he said. “If our economy is to double in the next 20 years as it has in the last 20, that’s a heck of a lot of jobs and we will need a lot of people to fill them.”
He also said retirees were much more likely to remain in the area rather then relocate to Florida or Arizona, leading to slower turnover of existing homes. “A place like Arcola, that’s adjacent to a Dulles Airport, that has Reston Town Center, that has rail coming out, that’s a good suburban location from a housing perspective,” he said.
Buchanan isn’t alone in jumping back into development of new Loudoun subdivisions; a new partnership led by Japanese homebuilder Sekisui House Ltd. revived the One Loudoun development from foreclosure earlier this year.
Retailers apparently aren’t as eager. “They are stepping back and really taking a closer count of rooftops,” Buchanan said. The Shops at Arcola is now slated for a subsequent phase.