DC Exemplifies Noteworthy Upcoming Development Trends
DC’s suburbs are filling in with walkable transit-oriented developments that appeal to Millennials and empty nesters alike, prioritizing community-centric amenities over the square footage of living space. Likewise, The District’s historically low-income neighborhoods are experiencing urban renewal, driving and driven by the influx of affluent residents. The DC area’s rapid transformation makes it a place to watch for investors nationwide who are interested in capitalizing on the latest trends.
We caught up with Baker Tilly partner Katherine Wiernicki, whose years of closely collaborating with residential builders and CRE pros has given her insight into the most prominent new trends with serious staying power.
“The biggest shift is people wanting to be in close proximity and be able to take advantage of neighborhood amenities, ones that promote socialization,” Wiernicki said. “Developments that are garnering the most interest are TODs near metro[s] that facilitate transit. The people who want to be in more vibrant areas aren’t just Millennials, they’re also Baby Boomers, and projects like The Wharf strive to accommodate both.”
To make room for ample green space, bike rooms, co-working space and common areas that foster a healthy sense of community, the size of multifamily units is shrinking. This is enabled by tenants’ increasing reliance on the cloud for books, documents, movies and music, which reduces the need for shelf space and storage cabinets.
“It will be interesting to see how small people will go,” Wiernicki said. “People are more willing to stay in a micro-unit if it’s transitional or a Microtel for just a night or two, but the question is will they be comfortable with this arrangement long term.”
Although recent graduates accustomed to cramped dorms may willingly adapt, empty nesters who are used to spacious suburban homes may not adjust as easily. Innovative developers are repurposing underutilized space for in-demand features.
“One close-in apartment developer recently told me that in response to a high demand for storage and renters without cars, they were able to convert a third of the building’s garage space into storage units,” Wiernicki said.
Suburban development is distinguishing itself in two important ways, layout and customizability.
“As you move into the suburbs, there’s a need for three-bedroom rentals among families with children, which developers are seeing and meeting with new construction,” Wiernicki said. “Homebuyers want to come in and customize their home.”
This is in stark contrast to the urban renter, who will more willingly sacrifice customizability for the convenience of having everything preassembled and preconfigured prior to move-in.
“The investment of time spent customizing and the investment of dollars spent on the home are proportional,” Wiernicki said. “It’s a big difference between the two markets. Buyers who are going to spend a million want everything to perfectly represent their style and their choice.”
Wiernicki sees Tysons, long epitomizing the “edge city,” now transitioning to a large live/work/play environment, as a case study for developers.
“You have The Boro and other very visible projects planned near [the] metro here,” Wiernicki said. “The impact on the immediate community and implications for future development will both be immense.”
An integral component to Tysons’ transformation is the Silver Line, catalyzing the proliferation of TODs near stations.
“The county is working with developers to create a plan that allows for a much higher density, and officials are incentivizing the provision of green space and sustainable building,” Wiernicki said. “Tysons is a microcosm forecasting all the aforementioned trends.”
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