Retailers are recognizing D.C.'s formidable economic strength. “The Washington area is very solid,” says Stephen Fuller, professor of public policy at George Mason University in Fairfax, Va. “It tends to do much better than the nation in hard times.”
During the 12-month period ending in June, net new job growth for the Washington D.C. MSA was 85,500, an increase of 3.1%. “The Washington area has the highest employment growth rate of all the metropolitan areas,” Fuller says. Those 85,500 jobs account for 20% of all 435,000 new jobs created in the U.S. during that period.
The composition of the Washington economy is different than other economies, with the federal government representing nearly a third of the local economy. In 2000, the federal government spent $74.1 billion in the Washington D.C. metro area on items ranging from payroll to procurement of goods and services.
Because its spending is non-cyclical, the federal government has a stabilizing influence on the Washington D.C. economy. “It grows every year in spending,” Fuller notes. “This fuels the private sector.”
“It's an exciting time here in D.C. and we believe that this growth is going to continue,” says Guy Silverman, a principal with D.C.-based StreetSense. The retail-only firm was founded by three D.C. natives who boast a total of 40 years' experience in the real estate business. StreetSense represents a variety of retail tenants — from nationals to local mom-and-pops — as well as landlords.
In recent months, Washington D.C. has had the lowest unemployment of any MSA in the U.S. with a June rate of 2.8%. The District also ranks fourth for the highest median household income at $57,000 per household, according to ING Aetna/Arundel Street Consulting. “There are many people in high-income jobs and dual-income households,” Fuller says. “There is a lot of disposable income here.”
Another factor contributing to the vitality of D.C.'s downtown is a growing residential base. Currently, 820 apartment/condo units are underdowntown. An additional 2,900 units are about to break ground (See map of downtown on inside cover for exact locations: #15, 19, 23, 47, 48, 49).
“Our downtown office market remains strong and more people — particularly young professionals — are moving back into the city,” says Bradley of the Downtown DC BID. “These new workers and residents are a great market for savvy retailers.” The 2000 Census reveals 20,000 people have moved into D.C. since 1995.
Downtown retailers also draw from a formidable suburban residential base. Fairfax County, for example, is the wealthiest in the country with average household incomes of $90,000. Those suburban residents are now coming downtown to shop because of the unique experience and distinctive retailers found downtown. Overall the choices are exceptional, including restaurants; at least one new restaurant has opened every month, on average for the past 36 months. And once there, they are staying, lured by flagship stores such as Barnes & Noble, Borders Books, Planet Hollywood and ESPN Zone, all which have opened in downtown's East End during the past 18 months.