How about some Northern Virginia buzz? I sat down this week with a top developer, a top contractor, and a top broker from that part of the region. They shall remain anonymous, but said:
The 4-mile extension of Loudoun County Parkway connecting the Greenway to Route 7, just finished in June, will have a huge impact that most people don’t recognize. It’s going to get traffic offRoute 28 and promote commercial development in Loudoun. Development companies such as Boston Properties, Lerner, Meridian, Capital Associates, MRP Realty, and Peterson are all sitting on land which they have new incentive to develop.
People are beginning to see that Route 28 will eventually (10+ years) become the new Beltway in the “middle” of the region; once all of the flyover interchanges are in place, you’ll be able to get from Route 7 to I-66 in only 15 minutes. This will drive huge development between the Route 28 corridor and Leesburg—stopping at Route 15 only because the landed gentry there won’t stand for it.
But companies will need more than infrastructure to locate. Their employees want a “sense of place,” ie, residential and retail before offices. Arlington understands this: look at all the residential at National Gateway at Potomac Yard that Meridian is building. The retail will deliver with the office space. Peterson has had been successful with mixed-use at Fairfax Corner. Loudounshould always remember Reston Town Center, which was ahead of its times in the late 80’s by pairing offices along with retail.
One of biggest issues for developers is now parking. Structuredparking costs have doubled in the past five years to about $15k per space, which can mean a $3 differential in rent between a project with structured parking vs. a less developed area withsurface parking. Mixed-use developers are urging sharedparking, such as between movie theatres and offices since they don’t tend to need spaces at the same time. So far, most localities won’t allow the shared concept. Doesn’t make sense.
Alarmingly, overall construction costs are finally catching up to the value of the finished product. That will take away incentives and inhibit deals getting done.
The commercial real estate community is so concerned about concerned about the damage traffic congestion is doing to development, they’re willing to increase their own taxes on commercial and industrial real estate…if that money is earmarked for transportation improvements in NoVa.
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