Developer Stephen Cumbie says that in 2012 he inked a deal with Archstone, one of the country’s largest apartment builders, to build a colossal 700-unit Tysons apartment project beside the Clyde’s restaurant at the intersection of Leesburg Pike and Chain Bridge Road.
When the deal came undone last year, due to Archstone’s sale to two other companies, Cumbie was in for a rude awakening. So many apartments had been built in the Washington area in the meantime, he said, that “clearly the bloom was off the rose in terms of the apartment market” in the eyes of Wall Street investors needed to make projects go.
“All of that money to Washington just closed down. People put a big red ‘X’ over it because of the oversupply,” he said in an interview.
Tysons isn’t the only local community where developers are wary of building too many apartments, but it may have the most at stake.
High-rise living beside the new Metro stations is a core concept of the planned Tysons of the future. Fairfax County officials and developers have talked about creating a more urban Tysons for years as an answer to the area’s brutal traffic congestion.
The first buildings will be complete this spring, around the same time Silver Line trains are finally supposed to begin running. One 350-foot tower, called Vita, is being marketed in advance as offering “unprecedented convenience and walkability with a direct connection to the new Silver Line Metro station.” Features include stainless steel appliances, wood floors, and a 30th floor rooftop terrace with a swimming pool, sun deck, cabanas and an outdoor kitchen.
No one knows yet how many people will show up to rent the units and how much they will be willing to pay.
Cumbie’s firm NV Commercial, where he is president, owns a small shopping center that includes a mattress store, adult video store and other older shops. It may not be much to look at, but it is on the doorstep of the Greensboro Metro station, making it one of the most attractive development sites in Tysons. The 700 Archstone apartments would have been built there in two towers, part of a massive complex that could ultimately include office buildings, a grocery store and a hotel around a central plaza.
Cumbie is in the market for another partner but isn’t sure when a deal will materialize. Other Tysons developers shared his uncertainty when asked about the size of the area’s residential market at a Tuesday conference hosted by the Bisnow media company.
“I don’t think anybody knows the answer to the question, personally,” said Bill Hard, executive vice president of LCOR, a developer with major land holdings in Tysons.
Hard pointed out that housing in Tysons is currently well below the housing-to-office ratio that exists in, say, the Rosslyn-Ballston corridor in Arlington. Hard questioned whether people who didn’t need to be in Tysons would be willing to move there once the Silver Line opened.
“I think at the end of the day we’ve got to count on built-in demand among the people who now work in Tysons as kind of the base of that market,” he said.
Jay Klug, a principal at developer JBG Cos., said he thought people initially would probably only be willing to live in Tysons if it was cheaper than Reston or Arlington.
“For the near-term I think we need to compete on price,” he said.
“What gives me hope on the residential side. . .is if you look at the millennial generation it’s huge,” he said. “It’s really bigger than the baby boomers. People don’t realize that, but it is. What's holding it back has been the economy, because you’ve got people living three and four together, you’ve got people living at home. There will be a tremendous growth in households as soon as the jobs are available for those people, and that’s happening. It’s happening slowly but it’s beginning to pick up steam.”
He acknowledged that there are likely to be some bumps in the road.
“There are going to be a lot of apartments built in this county over the next 10, 15 years,” he said. “Are we overbuilding supply in this market temporarily? Perhaps.”
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