How Associations Find Their Place Continued
Public transportation and access to DC are top amenities attracting associations to Crystal City, says Vornado EVP Jim Creedon, who also spoke on our association panel yesterday. The American Diabetes Association is moving to Crystal City and others like PBS have come the last few years because of its proximity to Capitol Hill. (Members of Congress often have to run back quickly to the Capitol for votes.) Restaurants and after-work activities have also helped with recruitment and retention.
CBRE EVP Manny Fitzgerald helped ADA find its new space and even showed it how CBRE has moved to a free address layout in the real estate firm's Baltimore office. Employees are assigned a desk each morning as they show up. The strategy has allowed several organizations to cut back on square footage. While it wasn’t the right fit for ADA, Manny said it gave them some good ideas.
ADA’s Doug Meyer (the same guy in the Georgetown Hospital TV ad on beating prostate cancer) says the decision to move requires involvement from everyone. ADA, which started talking about moving four years before its lease was up, formed seven committees to help with things like work-life balance and design. It picked Crystal City and now the “furniture committee” is at work. Mike from YFU says it took nine months of intense business planning. The nonprofit is using its new space to generate revenue through sub-tenants and allowing nonprofits to use the space for fundraisers and seminars. Even a professional yoga studio comes in 10 times per year to hold classes.
New space needs new funds. Cardinal Bank SVP and market exec Penny Bladich says loan rates are low right now, but they're influenced by the environment at the time and the strength of the organization; a bank will look at how long it's been around and its revenue sources. The pricing of the loan will also be impacted by the bank’s relationship with the organization, including deposits and cash management.
JLL research director Scott Homa discussed the regional economy. The area added 52,000 jobs in the last year, up significantly from the usual 35,000, and half of them were in tech. Associations, nonprofits and federal jobs also increased. Legal jobs are still down, but profits per law firm partner are up about 6%, says Scott. The region’s office market is also pivoting from a trend in efficiency and rightsizing to mobility and urbanization. Associations are moving from the ‘burbs to DC to be closer to Metro and to attract more Millennials, who prefer public transit. (DC is the second fastest growing jurisdiction nationally, after North Dakota, without any net increase in auto registrations.) Scott says 92% of leasing in Q1 was in buildings within a half mile of existing or planned Metro stations.
Stay tuned tomorrow for our coverage of the law firm panel in Legal Bisnow.