Professional Documents
Culture Documents
May 2017
TABLE OF Executive Summary | 01
Average DC Projects | 03
Development Patterns | 04
Conclusion | 09
Appendix | 10
EXECUTIVE SUMMARY
Real estate in Washington DC is constantly changing. Population growth
and increased construction activity continue to influence the cityscape,
often surprising the Districts own residents. Whether you are an investor
or informed citizen, real estate pipeline information is significant for many
reasons. In addition to influencing market economics and investment
opportunity, the citys pipeline of residential and commercial projects will
shape how we live, work, and socialize in our future city.
Using Recitys database of real estate development data and analytics,
our team has synthesized important findings in the Districts real estate
ABOUT RECITY
Recity is a real estate analytics company that provides data-
driven insights and metrics around real estate development and
investment activity in urban markets. We collect data about recently
completed, under construction, planned, and even unannounced
construction projects to empower real estate professionals and
their clients to make better informed decisions. With Recitys web
and mobile applications, customers can access reliable, real-time
insights anytime.
Recity collects over 70 data points from hundreds of sources
to create a comprehensive database that shows the state of
the market and upcoming pipeline. Collecting and maintaining
development data in a quickly changing market is challenging and
inefficient for an individual. Recitys technology-enabled research
team combs building permits, zoning documents, industry content,
and more to identify the most relevant and real-time information
for real estate professionals. The depth of the data we collect and
maintain allows us to show the impactful investments being made in
each city.
To see detailed information about Recitys data collection, research
process, and specific methodology for this report, please see the
methodology section in the appendix.
AVERAGE DC PROJECTS
In DC, both the average building size and overall project size are
increasing. We are able to calculate this and more from Recitys
comprehensive pipeline. For the ease of comparing data sets, we
split projects into two categories, completed and upcoming. All
projects completed by the end of the first quarter of 2017 are
considered completed and those still under construction or planned
are considered upcoming. Using these two categories allows us
to easily show the changes the market has seen over the last five
years.
Residential:
Comparing upcoming to completed residential buildings reveals
several interesting trends. Residential buildings are getting
larger, both in terms of square footage and unit count. There is
also a growing preference to construct apartments over condos,
contributing to an imbalance in the city of renting versus owning.
Nearly every aspect of residential buildings, besides the units
Commercial
Commercial office buildings are on the rise again, with almost double the
developments planned for the next five years than were completed in the
last five years. Commercial buildings are seeing many of the same trends
as residential. Office buildings in DC are getting larger, both in terms of
total square footage and parcel size, and renovating buildings is becoming
much more popular. Commercial buildings have adopted the mixed
use mantra as much as residential buildings. All of these factors come
together to change the shape of commercial buildings we see in the city.
Commercial buildings are increasing in size. The average upcoming
commercial building is over 75,000 square feet larger than completed
buildings. However, the average building has remained the same height
at eight stories. This means floor plates and lot sizes have grown
correspondingly by just over 8,000 square feet and 25,000 square feet,
respectively. New construction is only accounting for a small increase in
these sizes, with renovations responsible for the large increases.
The average upcoming Commercial building renovations are becoming significantly larger.
Whereas upcoming new construction commercial buildings are around
commercial renovation 50,000 square feet larger than completed buildings, the average upcoming
commercial renovation contains nearly 100,000 more square feet than
contains nearly
completed buildings. Large renovations and additions, such as Alexander
100,000 more square Court in the West End, are contributing to the increase in the average size
of renovations.
feet than completed
Commercial buildings have also increased their mix of uses. Retail
buildings.
was already a popular inclusion in the case of commercial buildings,
but hotel and entertainment inclusion is increasing, albeit slightly, as
well. We are tracking a three percent increase in the inclusion of hotels
in office buildings, as well as an eight percent increase in inclusion of
entertainment establishments. Entertainment includes businesses like
theaters, bowling alleys, and nightclubs. These mixed-use trends bode
well for creating successful urban neighborhoods.
DEVELOPMENT PATTERNS
The prevalence
of mixed-use
buildings, waterfront
Compiling complete development data presents us with a unique
perspective to see the real estate trends in Washington, DC. The
prevalence of mixed-use neighborhoods, waterfront development,
megaprojects, and transit-oriented development stand out as
important trends to follow.
development,
Mixed-Use Neighborhoods
megaprojects, and
The rise of mixed-use developments has transformed the real estate
transit-oriented
development formula. Whether they are being favored because of their
development stand out. ability to better weather financial crises or because they offer more
amenities to tenants, it is clear that mixed-use developments are here to
stay. Out of all of the Upcoming projects in Washington, DC, 64% have a
mix of uses, with 12% having a mix of office and residential.
Washington, DCs Real Estate Pipeline | 05
STATUS: Completed Cathedral Commons is not only successful because of the location,
but also the mix of uses provided within the development itself.
COMPLETION DATE: May 2015 The renters in the apartments provide patrons for the retail
SUBMARKET: Cathedral Heights establishments.The amount of retail the development is supporting
is significant compared to a slightly older grocery development a few
DEVELOPER: Bozzuto Group blocks away built without housing.
ARCHITECT: Maurice Walters
Waterfront Development
Washington, DC, has long turned away from its waterfront heritage.
Decades of freeway projects and urban renewal left some of the most
valuable real estate in the city underdeveloped. In recent years, concerted
efforts and reinvestment have transformed DCs waterfront into something
nearly unrecognizable. Public projects like the Clean Rivers Project have
Megaprojects
Projects in Washington, DC, seem to be getting bigger and bigger, so
much so that they can now be small neighborhoods in their own right. DC
projects are getting larger in building size and the amount of land they
encompass. Projects such as the Wharf and Capitol Crossing are so large
they have the power to affect average sizes across the city, even when
they are broken into their various construction phases.
Megaprojects are Recity is tracking more megaprojects than ever. There over twenty
projects greater than 1 million square feet that have been recently
over a fifth of all the completed or are planned to be constructed. Those twenty projects, if fully
development in DC. built out, will add over 38 million square feet of space. That is over a fifth
of all the development in DC. This small handful of projects add nearly
20,000 residential units and over 10 million square feet of office space.
Big investments and large assemblages are allowing developers to
radically transform the neighborhoods in which these megaprojects are
being built. The Southwest Waterfront is unrecognizable from what it
used to be just a few years ago. Downtown DC has a new shopping and
restaurant destination on what used to be parking lots. Megaprojects
allow for developers to tightly control their vision, many times producing
stunning results in terms of architecture and leasing strategy.
This trend shows no signs of stopping anytime soon. There are more
megaprojects planned for the near future than were recently completed.
If just the planned projects were built, that would add over 15,000
residential units and over 4 million square feet of commercial space.
The other half of the picture is just now coming into focus. Even though
the half mile around the NoMa - Gallaudet Metro Station has already
added over 3,000 residential units and nearly a million square feet of office
space, there are still over 10,000 residential units and over five million
square feet in our pipeline. This is an incredible amount of density that is
largely reliant on mass transit systems servicing the neighborhood.
TOD is not all about Metro either. Despite the DC Streetcar only being open
for a year, it is already possible to see the effects the investment in hard
infrastructure has had. Since the DC Streetcar opened in February 2016,
over 750 residential units and nearly 150,000 square feet of commercial
space have come online along its route. The future pipeline is even more
impressive. There are nearly 2,000 residential units and over 1.75 million
square feet of commercial space planned to be added along the streetcar
route in the next five years. The pipeline is focused on H Street NE, with
the majority of the projects happening there, but Benning Road NE will
see some development as well. With three Planned projects and one
Unannounced, there will be over 500 residential units and nearly 20,000
square feet of retail added to the Benning Road portion of the streetcar
route.
CONCLUSION
Washington, DCs skyline of tower cranes reveals just how much and
how quickly the Districts real estate market is changing. Recitys data
tracks the rate and nature of this change. Buildings, both residential
and commercial, are getting bigger. Apartments are being built at more
than ten times the rate of condos. The fabric of neighborhoods has been
altered as mixed-use increasingly dominates development trends, both
in buildings and in neighborhoods. The District is turning back to its
waterfront--neighborhoods along both the Potomac and the Anacostia
have transformed in recent years and will continue to do so. Much of the
DCs development is focused around mass transit corridors, emphasizing
transits importance in facilitating the citys increased density through
large-scale development.
The real estate landscape of DC has been changing at breakneck speeds in
recent years. According to our data, the rate of change is poised to speed
up even more in the near future. The pace at which new development
is coming online can be overwhelming, even for market experts. With
innovations in technology and Recitys deep understanding of how
development comes to life, a real-time picture of the evolving pipeline in
DC and other major markets is finally becoming more accessible.
Washington, DCs Real Estate Pipeline | 10
APPENDIX
Methodology
Below is a detailed outline of the data, timing, procedures, and considerations that apply to Recitys pipeline
database as well as research nuances for this particular paper. The figures reported in this paper are
representative of the following parameters:
Data & Timing
Project Type: Recity tracks new construction in all major project types, including multi-family, retail, office, hotel,
and entertainment. We also use public data to track where renovations and additions are taking place. We do not
currently track public service or educational use projects such as parks, libraries, or schools.
Project Status: Recitys pipeline database includes all real estate development projects that are in one of the
following status categories:
Recently Completed - real estate developments that have been completed in the last 5 years.
Under Construction - projects that have broken ground but have not yet been completed.
Planned - developments that are planned for some time in the future and have corresponding permits, zoning
cases and/or have been announced by the developer.
Unannounced - real estate or land that has been recently acquired and has a high likelihood to be developed
in the near future.
Timing: For the ease of comparing data sets, we split recently completed, under construction, and planned
projects into two categories, completed and upcoming. All projects completed by the end of Q1 2017 are
considered completed and those still under construction or planned are considered upcoming.
Project Size: Considering project size, Recity tracks all new residential developments with eight units or more and
new commercial developments at or over 20,000 square feet. For renovations, we track residential projects with
at least 20 units and commercial projects over 50,000 square feet. In some instances, we will include a project
below the minimum size if there is a meaningful change of use or substantial historic restoration that could be
considered new construction.
Research Procedures
Our research team carefully inspects a variety of sources to populate our technology. The majority of our data
comes from three areas:
Data from cities: including permit records, zoning cases and variance hearings.
Industry content: such as news outlets, developer websites and real estate blogs.
Property sales information: ranging from developer acquisitions to public auctions.
This information is proactively collected by our in-house research team. New projects are added to Recity daily
and any existing projects in the system are updated during a weekly maintenance sweep. We have proprietary
alerts to ensure project details and timing are adjusted for any development that might need to be updated.
Maintaining data quality and keeping the information updated is crucial for ensuring Recitys database is both
reliable and useful.
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