'We're Halfway Through An Enormous Cycle': The Wharf Sparks Southwest D.C. Development Boom

As The Wharf continues to draw new residents to Southwest and construction proceeds on its second phase, developers have moved forward with new projects that are adding apartments, retail, museums and other amenities throughout the Southwest neighborhood.

“The Wharf certainly woke up the waterfront,” Southwest Business Improvement District Executive Director Steve Moore said. “I think that reset how everybody thinks about Southwest, there’s no question about it. It might have changed the way investors looked here, and it certainly changed the way people think about where they choose to live.” 

The first phase of The Wharf opened in October 2017 with three hotels, two office buildings, two apartment buildings, two condo buildings, a 6,000-person concert venue and a host of restaurants and retailers. The Hoffman-Madison Waterfront team then broke ground in March on Phase 2, set to include 1.3M SF of additional mixed-use development.

Hoffman & Associates CEO Mark Dorigan, who will speak March 11 at Bisnow's Southwest D.C. Surge event, said Phase 2 is scheduled to deliver in 2022. He said it will build upon the momentum created by Phase 1, which he said has already welcomed over 10 million visitors. 

“We set out to reconnect the city to its water and we accomplished that, creating a vibrant waterfront neighborhood that has attracted residents and visitors alike,” Dorigan said in a statement emailed to Bisnow. “The Wharf serves as a great example of what can be achieved when you build with the community, and other developers are taking note.”

While it has been the area's largest development and drawn the most attention, The Wharf is just one of several new projects moving forward in Southwest. 

Southwest D.C. had 798K SF of office space under construction and another 1.4M SF in the pipeline as of Q4, according to Delta Associates data prepared for the Southwest Business Improvement District. Four residential projects totaling 989 units have delivered recently in Southwest, another 1,537 units are under construction and at least 3,000 more are in the pipeline.

The neighborhood also has three hotels totaling 538 rooms under construction and 300K SF of planned cultural amenities including the new Southwest Library, the Eisenhower Memorial and the art museum at the Randall School redevelopment. Southwest in recent years has welcomed new anchors such as Audi Field, where D.C. United plays its home games, and the new International Spy Museum, in addition to a host of new apartments and retail. 

“What’s occurring here is extraordinary,” Moore said. “The next 36 months here have as much development as we saw in the last few years. We’re halfway through an enormous cycle.”

Telesis Corp. President Marilyn Melkonian, whose firm is partnering on the redevelopment of the Randall School at 65 I St. SW, said she sees The Wharf as a catalyst for other development in the neighborhood.  

“I think it has attracted other developers to other sites in the neighborhood, which have been developed,” Melkonian said. “The success of The Wharf, because of the scale of The Wharf, is very inspirational to other developers trying their own developments on other sites that were available.”

The Randall School redevelopment, a partnership with Lowe, will turn two of the three historic school buildings into a museum with art from the Rubell family collection. The third school building is planned for arts-related space, Melkonian said. 

Next to the school buildings, the team is planning a 12-story apartment building with 498 units, 98 of them set aside as affordable. Work has already begun on the renovation of the school buildings, and Melkonian said the team aims to move forward soon on the ground-up development. 

As the city pushes to build more housing to address the affordability crisis, Melkonian said it is important to utilize available land on former school sites and other infill properties. 

“All of the sites that no longer are doing what they were originally designed to do have the potential to be residential,” Melkonian said. “All these sites need to be looked at for mixed-use residential opportunities.”

Melkonian said Telesis Corp. submitted a bid to redevelop Greenleaf Gardens, a 10-acre, 493-unit public housing community near the M Street and Delaware Avenue intersection in Southwest D.C.

The D.C. Housing Authority issued a request for proposals in April seeking developers for the site, but it has yet to announce a selection. Melkonian said the team's proposal would replace all of the public housing units and add new market-rate housing in higher-density buildings than exist on the site today. City leaders are looking to pursue a “Build First” model that would prevent displacement by constructing the replacement housing before any buildings are demolished. 

“It's one of the oldest developments in the city,” Melkonian said of Greenleaf Gardens. “It was designed many years ago at a different scale and a different density than what the current circumstances would really call for, but the ability to add density does not mean the loss of affordable housing.”

The District is also working to foster the development of new affordable housing projects in Southwest. The D.C. Housing Finance Agency has issued $60M in bond financing that has helped create 782 units in Southwest, with its most recent projects including the affordable senior housing units at the 555 E St. SW  project and 78 affordable units at 1550 First St. SW. 

“Southwest is one of the most active redevelopment areas in the city due to the new Wharf, the opening of Audi Field and its proximity to the entire Capitol Riverfront region,” DCHFA interim Executive Director Christopher Donald said in a statement emailed to Bisnow. “The large commercial influences and the limited land raised affordability challenges that do not exist in all other parts of the District.”

As some developers and city agencies focus on creating affordable housing, other developers are finding opportunities to capture the demand for high-end residential properties in the area. 

Republic Properties Corp. in September delivered 1331 Maryland, a 373-unit apartment project with some of the highest rents in the city. The building's units range from $2K/month for its smallest units to $25K/month for a three-bedroom  apartment with a den that totals 3,400 SF, according to the building's website. 

The developer has already leased about one-third of the units, Republic Properties Vice President Holly Hull said. She said the level of finishes and amenities provided and the expansive views the 14-story building offers have enabled the company to achieve top-of-market rents.

“At the end of the day, we were striving to create a product that didn't exist before in this market, given the prominent location and the unbelievable views,” Hull said. “We were looking to create a landmark worthy of those views.”

Hull said she thinks The Wharf has helped spur demand for new residential developments in the neighborhood.

“The Wharf has been a tremendous asset to Southwest generally and to our project,” she said. “We get the best of both worlds because we are steps away but we’re not on top of it, and so our residents have that convenience and the amenity base.”