Downtown Washington, D.C., is confronting many of the same pandemic-generated challenges as other urban markets across the United States. This includes above-average and record high commercial vacancy (office and retail), as well as lower-than-average daytime foot traffic, in part due to an increase in hybrid work. Yet there is a case to be made that now is a unique moment for leasing office (and retail) space in the District’s central business district (CBD). The loss of foot traffic has hit downtown retail particularly hard, especially fast-casual dining. Coffee shops and sandwich places that depend on office workers have closed at a higher rate than other food-related retail. But the pedestrians are coming back. Kastle Systems’ data from the DowntownDC Business Improvement District (BID) shows an increase since Labor Day in the number of workers at their desks, with approximately 42 percent of the pre-pandemic number of employees in-office on a weekly basis, compared with around 33 percent last spring. This is expected to rise as more employers establish return-to-office policies. Despite 2022’s turbulent economy over the first six months, D.C.’s office leasing activity was up 16 percent compared with the first half of 2021, according to Cushman & Wakefield. The …
District of Columbia
WASHINGTON, D.C. — The U.S. economy added 263,000 jobs in November, and the unemployment rate remained unchanged at 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS). The employment gains beat Dow Jones economists’ expectations of 200,000 new jobs, reports CNBC. Meanwhile, average hourly wages jumped 0.6 percent for the month, according to the BLS, double the estimate of economists. Furthermore, the 5.1 percent annual growth in wages exceeded the expectation of 4.6 percent. CNBC also reports that the better-than-expected wage growth may put even greater pressure on the Federal Reserve to continue its path of rate hikes, which Fed officials have been signaling as likely ahead of the December Federal Open Markets Committee (FOMC) meeting. Many media outlets report that economists are expecting the central bank to boost the federal funds rate by 50 basis points before the end of the year, raising the target range to between 4.25 and 4.5 percent. However, some other media sources indicate that strong wage growth is another sign of inflation and could push the Fed to boost the rate by 75 basis points. Big gains in leisure and hospitality In November, the employment sector with the biggest surge was leisure and …
Oxford Signs Law Firm to 40,914 SF Lease Renewal, Expansion at 1101 New York Avenue in D.C.
by John Nelson
WASHINGTON, D.C. — Oxford Properties Group has signed Allen & Overy LLP to a long-term lease renewal and expansion at 1101 New York Ave. in Washington, D.C. The law firm will continue to occupy the 11th floor and expand into a portion of the tower’s 10th floor. The tenant plans to begin renovations to its space in early 2023. Tom Fulcher, Julie Rayfield and Adam Brecher of Savills represented Allen & Overy in the lease negotiations. Matt Pacinelli, Kyle Luby and John Klinke of Stream Realty Partners represented Oxford Properties.
Northmarq Brokers $7.6M Sale of Retail Condominium in Downtown D.C. Leased to TD Bank
by John Nelson
WASHINGTON, D.C. — Northmarq has brokered the sale of a 4,403-square-foot retail condo on the ground floor of the Metropole Condominiums located at 1515 15th St. NW in downtown Washington, D.C. Built in 2008 in the city’s Logan Circle neighborhood, the property was fully leased at the time of sale to TD Bank. Isaiah Harf of Northmarq represented the seller, a private investor based in Maryland, in the transaction. The California-based, 1031 exchange buyer acquired the asset for approximately $7.6 million.
WASHINGTON, D.C. — Total U.S. nonfarm payroll employment rose by 261,000 in October, and the unemployment rate ticked back up 20 basis points to 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS). Monthly job growth has averaged 407,000 year-to-date in 2022, compared with 562,000 per month in 2021. The October performance beat the Dow Jones estimate of 205,000 but the economists expected the unemployment rate to remain at 3.5 percent, according to CNBC. Healthcare led all employment sectors in adding October jobs with 53,000, which is slightly ahead of its average monthly gain thus far this year (47,000). Professional and businesses services added 43,000 jobs in October and manufacturing grew by 32,000. Leisure and hospitality added 35,000 jobs, which is far below the sector’s average monthly job gain over the first nine months of the year (78,000). Additionally, the BLS revised the employment gains for August down by 23,000, from 315,000 to 292,000. The September figure was revised upward by 52,000, from 263,000 to 315,000.
Sun Belt Markets Dominate Top 10 ‘Markets to Watch’ in 2023, According to Emerging Trends Report
by John Nelson
WASHINGTON, D.C. — A variety of Sun Belt markets once again lead the “top markets to watch” in 2023 for overall real estate prospects, with Nashville ranking No. 1 for the second consecutive year in the annual Emerging Trends report issued by the Urban Land Institute (ULI) and PwC US. Using proprietary data and insights from more than 2,000 real estate industry experts across 80 tracked markets in the United States and Canada, Emerging Trends pegged the Music City as a “supernova” market due to its evolution from an 18-hour city to a “24-hour metropolis.” In the past couple years, Nashville has attracted Amazon and Oracle to build new office campuses, and two weeks ago the NFL’s Tennessee Titans and the Metropolitan Government of Nashville and Davidson County agreed to terms for a new $2.1 billion football stadium in the East Bank district that could attract events such as the Super Bowl and College Football Playoff. The private investment is in response to the Nashville MSA posting a 21 percent population growth rate in the past decade, according to the latest U.S. Census data. The Emerging Trends report noted that the pandemic has reinforced these migration trends as workers from …
WASHINGTON, D.C. — Redbrick LMD has received a $142.5 million construction loan for the development of The Douglass, a 750-unit residential project in Washington, D.C.’s Bridge District. Brian Gould of Chatham Financial arranged the loan through Citizens Bank on behalf of Redbrick. The Douglass will feature 40,000 square feet of retail space, and about 80 of the apartments will be reserved as affordable housing. The Douglass will be the first building constructed in the Bridge District, which comprises eight acres. Upon completion, the 2.5 million-square-foot project will be developed as a mixed-use neighborhood with a focus on sustainability and wellness. The Douglass is designed to target net zero carbon from operations and to meet or exceed International Future Living Institute (IFLI) and LEED Platinum standards.
Mitsui Fudosan America Reaches Deal With Industrious for 40,653 SF Space at Homer Building in D.C.
by John Nelson
WASHINGTON, D.C. — Mitsui Fudosan America (MFA) has signed a partnership agreement with Industrious, a flexible workplace company, for the use of 40,653 square feet of space at The Homer Building, an office building located at 601 13th St. NW in Washington, D.C. Located on the 12th floor, the space will feature private offices and a total of over 500 seats. The Industrious space at The Homer is scheduled to open in early 2023. Located atop Metro Center Station in D.C.’s East End neighborhood, The Homer Building features a rooftop deck, modernized elevator mechanicals and cabs, a four-level parking garage, full-service fitness center and a Panera Bread and coffee shop on the ground level.
WASHINGTON, D.C. — Standard Real Estate Investments LP, a minority-owned national real estate investment and development firm with offices in Washington, D.C., and Los Angeles, has purchased the Senator Square and East River Park shopping centers in northeast Washington D.C. The centers span 13 acres and are entitled and programmed for a $650 million mixed-use redevelopment that will bring 1,500 residential units, including approximately 300 affordable housing units, and 120,000 square feet of retail space to D.C.’s Northeast Heights district. National Housing Trust is developing 110 of the project’s 300 affordable housing units in a standalone building. The Black Economic Development Fund, which is managed by affiliates of the Local Initiatives Support Corp., and Forbright Bank provided construction financing for the development. The site is located within walking distance of the Minnesota Avenue Metro Station and near a build-to-suit office project that Trammell Crow Co. is developing for the District of Columbia’s Department of General Services. The construction timeline for the development was not disclosed.
WASHINGTON, D.C. — Foulger-Pratt has broken ground on Paxton, an affordable housing development located at the intersection of Benning Road and 16th Street in northeast Washington, D.C.’s Kingman Park district. The $101 million project will feature eight studio, 87 one-bedroom, 16 two-bedroom and 37 three-bedroom rental apartments upon completion, which is set for April 2024. A majority (133 units) will be reserved for households earning at or below 50 percent of the area median income (AMI). The remaining will be reserved for households earning at or below 30 percent of AMI and are designated as “permanent supportive housing.” All residents will have access to services through Hope Multiplied, a locally based nonprofit providing community development, health-and-wellness and socio-economic programs. Residents in the permanent supportive housing units will receive support services through Community of Hope, a local organization working to end family homelessness and improve health. Financing partners for Paxton include the District of Columbia Housing Finance Agency, which issued $46.9 million in tax exempt bonds and underwrote $42 million in D.C. and federal Low Income Housing Tax Credit (LIHTC) equity, in addition to a $29 million Housing Production Trust Fund loan from the D.C. Department of Housing and Community Development. …