Tuesday, 9 December 2014

[WardFive] Fw: D.C.'s development economy detailed: the good, bad and ugly (Wash. Bus. Journal)

 
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Subject: D.C.'s development economy detailed: the good, bad and ugly (Wash. Bus. Journal)



D.C.'s development economy detailed: the good, bad and ugly

Dec 9, 2014, 1:57pm EST UPDATED: Dec 9, 2014, 2:21pm EST
 
Rebecca Cooper
The fledgling MOM's Organic Market located in Douglas Development Corp's Hecht Warehouse District was the 28th new grocery store to open since 2000.
Michael Neibauer
Staff Reporter- Washington Business Journal
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Despite a shaky overall economy and signs of weakness locally, the District is "well-positioned for renewed growth and expansion," according to CBRE, which partnered with the Washington D.C. Economic Partnership to produce the 2014/2015 Development Report, released Tuesday.
WDCEP describes its annual report as an unbiased "development consensus," with contributions from more than 100 developers, architects, contractors and economic development organizations. With that in mind, the 92-page document is a mix of good and bad signals for the District, and a bounty of useful data detailing everything from foreign investment to demographics and individual projects.
"This collection of data provides key insights and highlights of D.C.'s major projects and upcoming development plans in the city. We are proud to produce this information in support of the continued growth of the District's economy," Keith Sellars, the WDCEP president and CEO, said in a statement.
I've culled the report for highlights.
  • It is a good time to be in residential construction, as 2014 will see the most residential units deliver — 6,908 — since 2001, when WDCEP started tracking. Of the 11,937 units currently under construction, 1,425 will be condos.
  • It is less of a good time to be in office construction, as 2014 will see only 1 million square feet deliver, compared with a 13-year average of 3.86 million annually. Of the 1 million square feet coming online, only 570,000 is private sector space.
  • The fledgling MOM's Organic Market located in Douglas Development Corp's Hecht Warehouse District was the 28th new grocery store to open since 2000.
  • D.C. has gained 80,000 new residents over the past decade, rising from 567,800 in 2004 to 646,500 in 2013. At the same time, the number of residents ages 25-44 has risen from 186,600 to 235,800. The percentage of residents of that age group has climbed to 36.5 percent, a 4 percent jump in a decade.
  • More than 50 percent of all foreign investment over the last five years took place in the last two years. Through the third quarter of 2014, eight properties totaling 3 million square feet have been acquired this year with $1.6 billion worth of foreign capital. The partnership anticipates continued stability as Europe shows signs of weakness and "instability plagues areas of the Middle East and Asia."
  • German and Canadian capital have financed the acquisition of nine buildings since 2009, Israeli capital six buildings, Japanese five buildings, British four buildings and Norwegian three. Kuwaiti and South Korean capital is responsible for two acquisitions each.
  • Between 2001 and the third quarter of 2014, 501 residential projects totaling more than 53 million square feet were completed in the District. There were 286 retail projects, 236 office projects, 166 hospitality projects and 159 educational projects.
  • Currently under construction are 87 residential projects, 62 retail, 22 hospitality, 21 education and 17 office. The projects underway total nearly 22.5 million square feet, and have an estimated value of $9.2 million.
  • The top retail project currently under construction is the Bozzuto Group's Cathedral Commons on Wisconsin Avenue in Cleveland Park, followed by Douglas' Hecht Warehouse District, Fort Totten Square (Wal-Mart), The Shops and Dakota Crossing (Lowe's), 800 New Jersey Ave. SE (Whole Foods), the Apollo on H Street NE (Whole Foods), Art Place at Fort Totten, The Wharf and Skyland Town Center (Wal-Mart, if it ever signs a lease).
  • The most active developer in D.C. since 2010 is, of course, the JBG Cos., with 24 projects either completed, under construction or in the pipeline. JBG is followed by WC Smith, Jair Lynch Development Partners, Douglas Development Corp. and Forest City Washington.
  • Another least shocking statistic: Shalom Baranes Associates was the most active architect since 2010, with 43 projects. Baranes was followed by Bonstra Haresign Architects, Eric Colbert & Associates PC, Hickok Cole Architects, WDG Architecture and Torti Gallas & Partners.
  • And for the third statistic that will surprise no one: Clark Construction Group LLC was the busiest general contractor over the past half decade, with 42 projects. Clark was followed by Hamel Builders, Forrester Construction Co., Grunley Construction and WCS Construction LLC.
  • The average size of a one-bedroom apartment has fallen from 850 square feet to between 725 and 750 square feet. And that doesn't take into account micro-units, which are typically less than 400 square feet. "Renters have become more interested in assessing the total monthly rent, rather than the quoted rent per sq. ft.," the report states.
  • There are currently 1,238 residential units under construction along H Street NE, and 623 more in the pipeline.
Michael Neibauer covers economic development, chambers of commerce, transportation and politics.



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