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Real Estate Bisnow
   
December 14, 2012  
 
 

Crushing It Downtown


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The trendiest retail is migrating from the 'burbs to the District. Better start extending those E-ZPass express lanes from 495 in to the city (even though none of us have figured out how to use them yet).

 
Gil Neuman and Scott Spector at The Ritz-Carlton on Dec. 13, 2012

That seemed to be the message yesterday as panelists at Bisnow's 3rd Annual DC Retail Real Estate Summit said shoppers and investors are looking almost exclusively more and more downtown. 250 joined us at The Ritz-Carlton, DC, where Greysteel managing director Gil Neuman (with Kodiak Properties’ Scott Spector) says investor interest in metro-area retail has shifted from the powerful demographics of the 'burbs to the urban infill opportunities of the District. Just like some of the best Christmas presents come in small packages, some investors even prefer to buy a 5k to 10k SF urban property over a behemoth suburban mall, Gil says.

 
Reznick (CohnDebut) MDCRE
Valdis Ronis and Jessica Bruner at The Ritz-Carlton on Dec. 13, 2012

OK, so once you've got a man and his wallet wandering H Street, how do you keep him there? Edens Mid-Atlantic leasing head Jessica Bruner (here with Perkowitz+Ruth Architects' Valdis Ronis) says the answer is design. Highly competitive urban markets like DC force owners and retailers to develop creative layouts to encourage people to hang out with others once they're in, she says. And keeping it close to home goes a long way. Edens focused on local retailers like Taylor Gourmet, for customer service, at its new Mosaic project in Merrifield.

 
Porcelanosa MDCRE
Dave Dochter and Jim Farrell at The Ritz-Carlton on Dec. 13, 2012

Cushman & Wakefield’s Dave Dochter (with Rappaport Cos’ Jim Farrell) says downtown rents have skyrocketed in some areas. 7th Street rates are up from just $35 to $40/SF triple net a decade ago to as much as $200/SF.

 
Kane (OfficeShred2) MDCRE
Philippe Lanier at The Ritz-Carlton on Dec. 13, 2012

EastBanc’s Philippe Lanier knows about high rents; almost all of his company’s portfolio is in Georgetown, DC’s most expensive neighborhood for retailers. But Philippe concedes that in 2013, CityCenter could rival Georgetown as a premier District shopping destination.

 
Bisnow (PropManage)
Janis Schiff and Richard Lake at The Ritz-Carlton on Dec. 13, 2012
Roadside Development's Richard Lake (with Holland & Knight's Janis Schiff) says fear of the fiscal cliff has affected retail sales: Employers are cutting back and households have had second thoughts about holiday spending. Gil cited discount king Dollar General's stagnant sales growth as a possible indicator of consumer concern but says a retail crash isn't likely. As long as interest rates stay low, he says, investors will remain active.
 
Julian Josephs and Tom Papadopoulos at The Ritz-Carlton on Dec. 13, 2012
We seem to have interrupted an insider deal between local investor/Georgetown prof Julian Josephs and Papadopoulos Properties' Tom Papadopoulos. Tom's firm is leasing the retail portion of The Portals at Maryland and 12th, two blocks from the Mall. Tom also just bought an apartment in Athens, the first sign that the US financial woes just aren't stressful enough for some people.
 
Clare Walsh, Jon Schulman, Adam Greenberg, and Sean Harcourt on Dec. 13, 2012
We also snapped Edens' Clare Walsh and Jon Schulman, DLC Management's Adam Greenberg, and H&R Retail's Sean Harcourt. Sean's leasing the 80k SF of retail that'll deliver in by summer '13 at Bozzuto's mixed-use Monroe Street Market near Catholic U, while Clare beamed about her firm's revamped Union Market in NoMa, which delivered in September and showcases more than 40 local vendors and artisans. More summit coverage Monday!

Til Hazel to Speak
 
We're delighted to announce that legendary Tysons developer Til Hazel, who some say has changed the landscape of Washington more than any other living figure, will join us Friday, Jan 25, at the McLean Hilton for our Future of Tysons event and speak about what he sees as the challenges ahead. An iconic player in Washington commercial real estate for much of the last 50 years, Til teamed with both Ted Lerner and Milt Peterson to tee up Tysons to compete with DC in business power and importance. Best for our audience, Til is known for speaking his mind. So fasten your seat belt, and sign up!

Miracle on Connecticut Avenue
 
Ty Trent, Bill Grillo, and Larry Leon at Morton's Washington Square, on Dec. 11, 2012

We were on the patio at the DC Morton’s this week to watch the lighting of the renovated Connecticut Avenue median. Also on hand: Cassidy Turley’s Bill Grillo, flanked by ValleyCrest Landscape Maintenance’s Ty Trent and Larry Leon, whose firm installed the illuminated artwork and the median's floral designs.

 
Connecticut Avenue on Dec. 11, 2012

Local artist Alex Cooper designed the art installation, which involves programmable lights. His work fulfills a goal of the Golden Triangle BID to add more public art. Another achievement: works in the Farragut North and Farragut West Metro stations.


Yesterday in Beverly Hills

 
SLS Hotel, Beverly Hills, on Dec. 13, 2012
The five-star SLS Hotel ballroom was packed for our Southern California Hotel Investment Summit. We pretty much got the feeling that hotels may be replacing multifamily as the sector du jour.
 
Sam Nazarian, SLS Hotel, Beverly Hills, on Dec. 13, 2012
Hotel legend and cultural trailblazer Sam Nazarian transfixed the crowd talking about innovators updating their primary "lite" brands with multiple sensory experiences and luxury services. (We nodded our heads, taking it on faith he was still talking about commercial real estate.) Instead of a single high-profile bar "with a red rope" in the lobby of each of his hotels, he surrounds them with his own night clubs— for example, he owns 12 around the SLS. That way, he explained, as trends come and go, you don't have to re-do the lobby every couple of years.
 
Send your NFL Week 15 picks to chris.baird@bisnow.com.
 
 
 
HITT (75thA) DCRE
 
Zurich (WhitePaper) DCRE
 
Exec Space (Beta) DCRE
 
WS (Cambridge) DCRE
 
Porcelanosa (Showroom) DC
 
Cardinal (Cook2) DCRE
 
DC Central (Sips) DCRE
 
Arent Fox (REI) DCRE
 
Cleaners (Patch)
 
Bisnow (Survey) DCRE
 
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