New Life in the Dulles Corridor
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The road from Tysons to Loudoun once was the heart of the DC region’s tech community. But with tech startups migrating to DC and closer-in suburbs, and the government sector shrinking, it may be taking on a whole new identity.
Gurus tell us the Silver Line is poised to draw a wider mix of companies and bring back some of the tech. EDGE Commercial Real Estate regional manager Scott Rabin says not only are mixed-used TOD projects sprouting around new and future stations, but the whole Corridor has become more competitive for existing buildings. Many landlords are renovating common areas, beefing up amenities (like food trucks), and modernizing vacant spaces with fewer offices and more collaboration spaces. Office vacancy rates range from the low teens to low 20s depending on the asset class, but repositioned properties, new buildings, and those with good amenities and close to public transportation are outperforming others.
Another trend: Scott says tenants are casting a far wider net when looking for new space. As the Silver Line beckons, they're considering new areas, though still focused on price, road access, and proximity to workers and customers. Scott says he’s also seen companies consolidating but upgrading to boost the quality of space. The Corridor’s 2015 outlook is improving as space vacated by government contractors is backfilled by firms relocating within the region, but the submarket still needs more business growth drivers for more absorption, Scott says.
Herndon has put so much weight behind the Silver Line, it rezoned 38 acres around the future Herndon station to transform the 4.2 square mile town into a walkable urban community. Herndon mayor Lisa Merkel wants riders intrigued enough to get off and explore the town when the second phase of the Silver Line is completed in 2019. Once home to dairy farms, the town has worked on rezoning with nine owners of land around Metro toward cohesive redevelopment.
Lisa says Herndon is looking at ways to connect its downtown to the station, which is a little over a mile away. A rezoning was recently approved for 15 townhomes and five condos with 5k SF of retail, and 17 single-family homes are under construction in downtown. The town’s master plan is being shopped out to developers to get the downtown revitalized before the station opens its doors, says Lisa. Herndon already has 5.7M SF of office, 1.4M SF of retail, 1.2M SF of industrial and nine hotels with 1,227 rooms.
The ultimate goal, Lisa says, is for Herndon residents to need only one car. The town has invested in lighting on the W&OD bike trail that cuts through downtown and what Lisa thinks of as another Herndon main street. New businesses like upscale bike shop Green Lizard Cycling, new restaurants like Europa, and welcoming tables in the Town Hall Square have created an environment where people hang out. The town is also attracting big crowds with events like Friday Night Live, a free outdoor concert that draws 3,000 people and the Herndon Festival that draws over 80,000. She knows Reston Town Center is where people shop, but she’d like Herndon to be the place where they come for activities.
But with all the silvery hopes and dreams of Metro comes concern. Walsh, Colucci, Lubeley & Walsh attorney Andrew Painter wonders how housing, retail and office in Loudoun and Fairfax will fit into the Silver Line picture long-term. Andrew says Metro will offer opportunities for both counties to compete with closer-in jurisdictions. But it will take more than rail to turn commercial corridors into dynamic economic development engines. NoVa's office market may struggle to bounce back with federal contractors diversifying away from government work. Plus, mixed-use development is becoming the new standard for office and retail, and most of Loudoun and Fairfax have traditional, single use.
Andrew says both counties should focus on attracting new residents since housing has driven demand for retail and local-serving office uses in recent decades. They also need to figure out their brand identities and consumer marketing programs to address the needs of seniors and attract the creative class, which has traditionally flocked downtown hot spots like 1776, seen here.