Unsure how strong demand will be, developers along Washington, D.C.'s 14th Street corridor are locked in a race to be first out of the ground and capture early sales. Excavation has started in recent months on more than a half dozen major projects that will produce roughly 700 units in a neighborhood that was one of the hottest during the 2000s.
Many of the projects are being done by the same developers and architects who put the Capital's historic arts district on the map during the last decade, earning more than $600 a square foot for condos in mid-2007. Several new, bigger players have entered the fray as well, including an apartment REIT, drawn by strong demographics in a former industrial neighborhood that now boasts of some of the best restaurants, clubs, and theaters in D.C.
In many cases, developers plan to hedge their bets by bringing smaller units to market with lower price points than in previous projects. But for the time being, no one is publicly releasing pricing information. Instead, market participants appear locked in a game of chicken, waiting to see who will release prices first.
Bill Bonstra of Bonstra Haresign Architects, which designed several signature buildings along 14th, pulls out the plans for The Aston, a new project at 14th and R Street. As cranes dig up old brick rubble, Bonstra explains that the project, which is now on its third owner, has undergone several revisions to produce smaller, more affordable units. Prices will now start in the $300s for the building's 31 condo units.
The building will have a mix of apartment sizes, with some going for more than $1 million. Bonstra designed a larger duplex unit at the rear with a walk-out terrace. A top-floor penthouse facing 14th Street will have a full-width balcony under a projecting roof. Developed by Habte Sequar, the project also includes 18 parking spaces and 3,000 square feet of ground-floor retail. Development plans had been delayed for lack of financing.
Across the street, PN Hoffman, which was one of the first developers in the neighborhood, has started work adapting a former Verizon switching station into 34 loft condos. Hoffman, which purchased the five-story, 33,000 square-foot building for $4.67 million, according to an article in the Washington Business Journal linked to PN Hoffman's website.
The renovated loft units, which may be ready for market first, will feature 12- and 16-foot ceilings with an average size of 600 square feet. Designed by Eric Colbert & Associates PC, which has done several of the signature projects along the corridor, the project includes some ground-floor retail. (PN Hoffman won a grand award in our Builder's Choice design competition for its 2007 project, The Warehouses at Union Row, which you can see by clicking here.)
One of the biggest holes in the ground, spanning nearly the entire block of 14th Street from Swann to S Street, will one day house District Condos. The developer, JBG, hopes to deliver 125 condos next year above 18,000 square feet of ground-floor retail through the renovation of an historic building and the construction of a new seven-story structure.
Like many of the new condos done along 14th street during the last 12 years, District Condos will feature elaborate amenities aimed at a luxury market. It will include private terraces, a fitness center, and a resident lounge. The rooftop terrace will offer outdoor living rooms, an outdoor kitchen and bar, a fire pit, a water feature, and a sundeck.
D.C. developers are betting on a rebound in what was one of the most fertile districts for condo development during the mid-2000s. The region, close to the city's business districts, not only attracts the usual urban demographic, it also appeals to D.C.'s transient population of political appointees and international embassy personnel. Developers and residents report that neighborhood resale values have held up pretty well through the downturn.
Construction re-started this year after a window for bank financing apparently opened. The banks' willingness to lend was no doubt influenced by a leveling off in downtown D.C. condo prices, brought on by a surfeit of new supply. Sales prices are actually up 1.8% year over year through June, according to Delta Associates, Inc., which estimates that downtown D.C. has only a half-year supply of condominiums at current absorption levels.
One of the biggest downtown developments underway is 14W, or Jefferson 14, a sprawling, 300,000 square foot project on the corner of 14th and W Street. A joint venture between Perseus Realty and the Jefferson Apartment Group, the project features 231 rental apartments, a new 44,000-square-foot YMCA facility, and more than 10,000 square feet of ground-floor retail space. The first apartments will deliver next summer.
The project is one of the first to comply with the District's recent inclusionary zoning requirements, which provide a density bonus for developing affordable units. 14W includes 212 market-rate homes and 19 apartments "permanently designated" as community housing for residents earning up to 60% of the area's median income.
Many new projects along the corridor must work around historic district requirements. In the case of 14W, the developers intend to keep some historic townhome facades along 14th street and use them to house shops and restaurants that will connect to the rest of the project.
The biggest pit in the ground, though, may belong to UDR, the apartment REIT, which is developing a 255-unit apartment, mixed-use project called 2400 14th Street NW, on the site of the former Nehemiah Shopping Center. UDR, the third owner of this property in recent years, will be building nearly 20,000 square feet of retail space as part of the project.
Several other projects may break ground before the year is over. Georgetown Strategic Capital is planning a project called Utopia that will run south along 14th Street below U Street. Several historic buildings will remain but other buildings containing fast-food restaurants and shops will be demolished to make way for 220 rental apartments and 20,000 square feet of retail.
Douglas Development, a big player in the District's commercial building scene, plans to build a six-story, 30-unit apartment project at the corner of Florida Avenue and 14th Street. Permitting is reportedly underway and construction may begin by October on the site of a former auto sales shop.
Boyce Thompson is the editorial director of Builder.