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Washington, D.C. continues to grow and thrive but in a very different manner than it did in the past. While the national debt surpassed $16 trillion, the local economy has benefited from the government spending — which has resulted in the metro area having the lowest unemployment rate in the country. Additionally, D.C. continues to reap the benefits of having seven out of the top 10 wealthiest counties in the United States located within the metropolitan trade area. Furthermore, Generations X and Y are changing the real estate landscape by rejecting the baby boomer suburban ideology and opting to migrate to the city for non-committal rental housing, public transit, and a closer proximity to work and shopping.
As many retailers will attest, if you are not growing, you are dying. The District has always been a vital market for retailer expansion. Today, with a floundering American economy and fewer opportunities for growth in the middle of the country, Washington has become a focal point for retailer expansion. For example, YO! Sushi, the British conveyor belt sushi concept, elected to open its first North American unit at D.C.’s Union Station. In addition, Walmart spent significant time and money creating unique store layouts and attaining local support through political as well as grassroots efforts in order to secure its first six stores in the District. Two Walmart stores are under construction: one at 77 H St. NW, and another at Georgia Avenue and Missouri Avenue NW. Four other stores will be located at Good Hope Road and Alabama Avenue SE; Fort Totten Square, South Dakota Avenue and Riggs Rd. NE; East Capitol Street and 58th Street SE; and New York Avenue and Bladensburg Rd. NE.
The flight to the city has not only changed where consumers shop, but how they shop. Sophisticated retailers, such as Whole Foods Market, have adjusted prototypical footprints and product offerings in order to appeal to the educated customer. This new assortment, often promoted through social media, has allowed Whole Foods to become an everyday shopping destination for many urban dwellers.
Local municipalities are also acutely aware of these growing trends and continue to proactively participate in the process. Through comprehensive rezoning efforts in submarkets such as Tysons Corner, Va., and Rockville, Md., many properties have been up-zoned affording land owners the opportunity to provide more density on their property. Rhode Island Row, a mixed-use project consisting of 70,000 square feet of retail and 274 residential units located atop the Rhode Island Avenue-Brentwood Metro stop, is a prime example of one of D.C.’s new transit-oriented development projects. Developed by A&R Companies and Urban Atlantic, this project was only made possible through a public-private partnership and tax increment financing.
In today’s world, time is the most important commodity and people want convenience. With the D.C. area ranking number one for traffic congestion in the United States, the trend of people flocking to places where they can work, live, and play will continue to dominate the real estate landscape. As such, retailers, local governments, and developers will continue evolving to satisfy consumer demand in the urban markets.
— Geoffrey Mackler is a principal with H&R Retail, the largest retail-only brokerage firm in the Washington, D.C./Baltimore metropolitan area.