Urgency For Grocery Store Downtown Grows As Residents Begin To Move In

Hundreds of new apartments have begun opening in former office buildings in D.C.’s central business district, the first signs of progress toward the mayor’s goal to add 15,000 residents downtown within the next few years. 

But across more than 180 square blocks in the center of the city, the mix of uses is still missing one key ingredient: a grocery store. 

“It’s totally lacking,” Willco President Gary Cohen, whose firm developed one of the first two conversion projects downtown, said of grocery options. “That's such a need.”

The first two major office-to-residential conversions downtown, the 163-unit Elle and 222-unit Balsa, opened last year, and at least 1,500 more units are moving forward with openings expected by 2028, according to a Bisnow analysis of data from the Washington DC Economic Partnership.

While there are some grocery stores on the edges of downtown — a Whole Foods in Foggy Bottom, a small Trader Joe's in the West End and a Safeway in Mount Vernon Triangle — there are none in the Downtown or Golden Triangle Business Improvement Districts, the BIDs confirmed.

The situation is a chicken-and-egg paradox: Grocery stores won’t open unless an area has a solid base of residents, but residents want to move to places that already have fresh food offerings. Right now, developers worry D.C.’s central business district doesn’t have enough of either.

Additionally, opening a grocery store anywhere, especially in a dense downtown area, is a particularly complex equation. Grocery stores need specific design requirements, including features like large loading docks and floor plates, and landlords that can offer discounted rents.

But there are new public and private efforts underway to take on the problem. As of last month, the city is offering a new tax incentive for full-service grocery stores to open downtown. 

“For more residents to live downtown, we will need more grocery options,” Mayor Muriel Bowser wrote in her letter proposing the tax incentive legislation. “However, grocery openings traditionally lag behind housing development —creating a food access gap and a disincentive for residents to locate downtown.”

Willco’s Elle is an 11-minute walk from the small West End Trader Joe's and a 10-minute walk from the Foggy Bottom Whole Foods. The building is 80% leased.

The developer designed the building with cold storage space because it imagined residents would be ordering online at higher rates than residents who are closer to a large grocery store, Cohen said. 

Willow Bridge’s Balsa at 1313 L St. NW is a 14-minute walk from the closest grocery store, a Whole Foods, and it also has cold storage. The building is just over halfway leased.

“Having quick places to be able to get in and get out your groceries is just crucial, because we need that,” Willow Bridge Vice President Michelle Eyo said. “Those are our essentials.”

Balsa and Elle are the first of a series of conversions planned to bring over 1,000 new units downtown over the next few years.

The map below shows completed and in-progress residential conversion projects in blue and large grocery stores in green. Click on the icons for more information.  

In June, Foulger Pratt is scheduled to deliver a 243-unit conversion at a former Department of Justice building at 1425 New York Ave. NW. Branded as The Accolade, it is roughly a 20-minute walk from its two closest grocery stores — the Logan Circle Whole Foods and the Mount Vernon Triangle Safeway. 

Foulger Pratt Senior Vice President of Development Jay Kelly said grocery proximity wasn’t a primary factor the company considered when deciding to do the conversion.

“It'll be very interesting to see whether we get pushback from renters that aren't proximate to a grocery store,” Kelly said, noting the building also has cold storage.

“When we started the Accolade, office-to-resi conversions were very early, and maybe we'll learn that we made a mistake in not thinking more about that,” he said.

Willow Bridge, which was previously Lincoln Property Co.’s residential arm and spun out on its own in 2023, broke ground on its second office-to-residential conversion downtown in November. The 264-unit project at 1125 15th St. NW is a 10-minute walk from the Foggy Bottom Whole Foods. It is expected to deliver in early 2027.

Cohen and Miller Walker Retail Real Estate principal Bill Miller both separately referred to the grocery situation downtown as a “chicken-and-egg” paradox.

“The chicken and egg comes in where you go, ‘I want to put the grocery store in first, and then the residential is going to come,’” Miller told Bisnow. 

“Grocery stores have such thin margins, even if you said, ‘Hey, you don't have to pay any rent, we'll build it for you,’ if they don't get enough traffic, they've got to have produce that goes bad, and they've got to pay the employees to keep the lights on, and you still could potentially be underwater,” he added.

Some public and private efforts have emerged to bring a grocery store downtown in the coming years before the vast majority of the residential planned for downtown comes online.

Last month, the D.C. Council passed a map amendment to the city’s supermarket tax incentive, adding downtown as a neighborhood where full-service grocery stores can qualify for a variety of tax benefits.

“I think it will be very important, particularly because we want to accommodate new residential buildings and more residents downtown,” Deputy Mayor for Planning and Economic Development Nina Albert told Bisnow. 

The incentive was previously available for grocery stores in other neighborhoods outside of downtown, said Chad Shuskey, chief operating officer of the Washington DC Economic Partnership.

“Some of them will take that incentive and basically, it becomes part of the deal, if that makes sense, so it’s already penciled into their numbers,” he said.

WDCEP is constantly marketing sites across the District to prospective grocery tenants, but Shuskey said it is now ramping up its efforts downtown. 

“Now there's a new focus of trying to get much more mixed-use, much more residents [downtown], and so let's make sure that we're talking to the right folks — grocery stores we’re talking about, but could be daycares, could be other things like that,” he said. 

D.C. Council Member Brooke Pinto is working to bring a full-scale grocery store to the Chinatown and Gallery Place neighborhood, a spokesperson for her office told Bisnow. That would be in addition to a planned Asian market from local chef Kevin Tien, which was reported in November to be coming to Chinatown but hasn't announced a specific location or opening date. 

“As we build more housing for residents to move Downtown, we must also invest in the amenities that a diverse and resilient community relies on including grocery stores, art, culture, and entertainment, and schools,” Pinto said in an emailed statement. 

The Golden Triangle BID, which has a 44-square-block district on the western side of the CBD, last month put out a request for proposals for a repositioning plan for the area that would identify opportunities for residential development and neighborhood-serving amenities in the BID. 

Among its tasks, the report would look at where it makes the most sense for grocery stores to be located, taking in factors like residential density and size availability, Golden Triangle BID Executive Director Leona Agouridis said. The deadline was Wednesday, and the BID anticipates a selection at the end of March.

Agouridis said now is the right time to take on the grocery issue, at the beginning of the residential renaissance planned for downtown. 

“The worst time to do that is when you really need to have it,” she said.

Plopping a large grocery store in the middle of an already dense downtown office district comes with challenges.

Most of the grocery stores that have opened in D.C. in recent years have been part of multibuilding mixed-use developments: the Lidl at Skyland Town Center in Southeast D.C., the Aldi at Northeast D.C.'s Art Place at Fort Totten and the Wegmans at City Ridge in upper Northwest.   

At these types of large-scale projects, operators know they will have a solid customer base, and landlords can give them the reduced rents and specific structural components they require.  

“There's so many things that go into making sure a space can work for a grocery store that the best way to satisfy that is to have the building designed with that particular use in mind,” said H&R Retail Principal Bradley Buslik, a broker who works with grocery tenants.

The new development would have to be large. Miller estimates it would have to be at least 500K SF so that the landlord could bring in enough rent to outweigh the concessions it needs to offer to a grocery store.

“For the infrastructure components to do it properly, there's probably a mix of it that has to be a large-scale development, a landlord that is the sponsor, effectively, and potentially some help from the District to get something bigger than the mid-size,” Miller said.

There aren’t very many open lots downtown. Most of the opportunities would likely be in conversion projects, but those are even more challenging.

It would have never worked in Foulger Pratt’s conversion, for example, Kelly said. 

“Grocery stores need a lot of space,” he said. “They need a lot of loading, and these buildings aren't necessarily designed to accommodate that.”

UPDATE, FEB. 18, 11 A.M. ET: This story has been updated with a statement from Deputy Mayor for Planning and Economic Development Nina Albert.