Washington D.C. is experiencing a retail renaissance. It is currently rated one of the strongestmarkets in the country. This is evidenced by the ongoing investment underway, especially retail. There is a renewed interest in D.C. occurring in downtown and in neighborhoods across the city. The District of Columbia government, property owners and developers have made tremendous strides in their joint effort to transform D.C. into a 24-hour city. “The opportunities are limitless to bring in anchors and different types of co-tenants and co-users to make this one of the great downtown environments in our country,” says Jon Eisen, director of projects at Street-Works of Alexandria, Va. “The momentum is building and people will soon start to see the rewards of their hard work.”
Retail is a central component in Mayor Anthony Williams' effort to revitalize D.C.'s neighborhoods and communities. “Retail adds vitality to neighborhoods, creates jobs and increases the District's tax base,” says Rich Bradley, executive director of Washington D.C.'s largest business improvement district, the Downtown DC BID. The city has been very pro-active in marketing D.C. as a desirable location to retailers. Mayor Williams himself has participated, working with the private sector to reach out to the retail industry, including attending events such as the annualCouncil of Shopping Centers convention in Las Vegas.
“Currently, D.C. has only 9 sq. ft. of retail per resident compared to 23 sq. ft. for suburban Maryland and 27 sq. ft. for Northern Virginia,” notes Richard Lake, managing principal of Madison Retail. “The national average is 16 sq. ft. per resident. Clearly D.C. is under-retailed and the industry is keenly aware of this opportunity.” Madison Retail Group, headquartered in Washington D.C., is the largest retailfirm in the city. Its ten principals represent national and regional tenants, owners and developers.
“There is a lot of opportunity in Washington and it is a very exciting marketplace right now,” says Bill Miller, vice president of retail services at TransWestern in Washington D.C. “The excitement and success is built on a very solid foundation.” That downtown foundation consists of a strong economy, a tight office market and a growing residential base coupled with plenty of historical, cultural and entertainment attractions. There is no single dominant corporation or industry in D.C. — its employment base is possibly the most diverse and well-heeled in the U.S. Hospitals, The Washington Post and the nine local universities top the list of the largest employers.
The city is home to more than 570,000 residents, 646,000 daytime workers and another 55,000 daily visitors. Its office market spans more than 100 million sq. ft. and is now the third-largest office market in the U.S.
Washington D.C. enjoys the healthiest commercial office market in the country. The vacancy rate as of August was 3.6%, the national low, and there are at least three large users seeking space that will result in new. Despite a slight easing in office demand in 2001, 70% of the 4.5 million sq. ft. of office space slated for delivery in 2001 is already pre-leased. In addition, apartment vacancy rates in neighborhoods bordering downtown D.C. are at 1%. Rents are up at least 10% in all neighborhoods adjacent to downtown.