NoMa Is On The Verge Of A Big Condo Boom
NoMa has no shortage of rental units in the pipeline. As the neighborhood becomes more established, and more Millennials look to buy homes, developers are bullish on building condos.
FORTIS is about a month from delivering its 42-unit Pullman Place condo building at 911 Second St. NE, and it has already sold 50% of the units, president George Chopivsky said. The demographics of those buying at Pullman Place vary from Millennials to people starting families to empty nesters looking to downsize, Chopivsky said.
"One of the reasons we were drawn here was with the tremendous apartment supply, I figured there was an opportunity to build 42 for-sale condo units," Chopivsky said at Bisnow's Future of Northeast DC event Thursday. "There's a compelling argument to own versus renting in this submarket. If you've got a longer-term perspective, and can commit to living somewhere for several years, it makes sense to own versus rent."
A recent survey the NoMa Business Improvement District conducted found that 72% of current NoMa residents would be interested in buying a home in the neighborhood, BID president Robin-Eve Jasper said.
Neighborhood Development Co. CEO Adrian Washington said people looking to buy condos are especially drawn to emerging markets like NoMa where they can expect to see their property values rise.
"In terms of this market, there are a lot of people who want to buy," Washington said. "They see the value proposition. They feel like they’re getting in on the ground floor. It’s not just the homeownership proposition, but as an investment proposition."
MRP Realty's John Begert said that the District hasn't yet experienced the same type of large condo building development that it did during the previous cycle.
"You haven’t seen prices spike on the the exit side to allow for larger-scale developments to move," Begert said. "That’s probably a good thing overall, but that’s the reason, at 40 or 50 units, you can get more aggressive. It’s also more desirable to buy into a unit with that kind of scale versus one with 100 or 150 units."
J Street Cos. chairman Bruce Baschuk said he is currently going through the zoning process for a 64-unit condo building near the corner of L and Third streets NE.
"If you look at the product that’s currently in NoMa, the reason we’re bullish on condos is there’s not much for-sale housing other than townhomes that need renovations," Baschuk said. "If we can build something that’s brand-new, that people can come in, turn a key and go to work right away, that’s the goal."
One of the pioneers of NoMa development on the west side of the Metro tracks, Baschuk said the east side, where his condo site is located, is becoming more attractive and well-suited for condos.
"We like that Third Street corridor that transitions down from Union Market to H Street. It's a natural path," Baschuk said. "It's lower density and it's closer to the neighborhoods and parks."
The 3rd Street development pipeline was a hot topic at Thursday's event, which was held in the expansive fourth floor office space of Douglas Development's Uline Arena at 1140 Third St. NE.
"This was not the best side of the tracks at the time we bought it, but now it's the cool side of the tracks," Douglas Development principal Norman Jemal said. "Third Street is going to be a game-changer, it's really a conduit between H Street and Union Market."
Even StonebridgeCarras founding principal Doug Firstenberg, one of the most active developers on the west side of the tracks in NoMa, said he wishes he could have gotten in on the Third Street rush.
"Third Street, I think, is going to be the greatest street in the city," Firstenberg said. "I’m just pissed no one let me partner with them on it."
One of the developers who does have a big chunk of Third Street's pipeline is Foulger-Pratt, which is planning a two-building project at 301 N St. NE. The development will have 350 apartment units, a 175-room hotel and up to 35K SF of retail. Managing principal Bryant Foulger said he is planning to bring in a full-service restaurant, something the neighborhood desperately needs, plus neighborhood-serving retail like fitness centers, banks and dry cleaning.
"What we want to do is give the retailers the opportunity to express themselves through their storefronts," Foulger said, "and give them a lot of leeway, so that it starts to feel like a real, genuine street."
