Will Reston Say Bye-Bye to Shopping Centers?
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One of Reston's beautiful South Lakes, Lake Thoreau, is obscured by the South Lakes Village Center strip mall that sits on one of its banks. Fortunately, 101-year-old Reston founder Robert E. Simon has a suggestion to replace several such malls with European plazas.
Bob, who spoke at our Future of Reston & Herndon event yesterday morning at Reston Metro Center (with nearly 400 attendees), says hiding lake views is like throwing away money. While he originally envisioned European plazas, Reston is now full of examples like South Lakes (Hunters Woods Village Center is another). He’s working with county officials and says he's “determined” to develop a plan over the next 15 years to create plazas. At 101, Bob says the secret to longevity is an evening martini made with gin, not vodka.
Bob pointed out other Reston gems like its 50 miles of trails, public art and Reston Town Center—which has a model plaza, no vacancy and higher lease rates than Tysons. And it has the residents and office workers that retailers want, says JBG principal Greg Trimmer. He says retailers can’t get to Reston fast enough and his team is having to be picky. The conundrum is choosing local chains, which often need extra TIs, or national chains that have more money and aren’t in the region yet.
Reston’s office market proves that mixed-use is the new paradigm, says Cushman & Wakefield executive director Matt Bundy. Getting in a car and driving an hour to get a bite to eat hurts productivity, so mixed-use is a requirement no matter what generation you represent, he says. Office vacancy across NoVa is tough at 15.8%, and Matt says to keep an eye on Herndon where big blocks of space will come on line soon.
On the residential side, Reston is light on Millennials and that trend was taken into account when Renaissance Centro built The Harrison, a 360-unit apartment building in Reston Town Center. CEO Sonny Small says the building, originally planned as condos, is 50% leased and has a mix of ages. The amenities are focused on community, where residents can come down to the lobby for coffee and visit with other residents and walk across the street for dinner. The units are also larger, which goes against trends, but Sonny says people are likely coming from garden apartments and want bigger space and amenities.
But are Reston and Herndon enough to draw more Millennials? Coretrust Capital Partners principal Randy Scott says they’ll still gravitate to the urban core, but what they’ll do as they get older remains to be seen. Regardless, properties along the Silver Line will outperform, which is why the LA-based company acquired Reston Metro Center I and II last year. Proximity to Reston Town Center and views from the Toll Road will also make the properties successful, he says.
The future Silver Line through Reston and Herndon is drawing companies that never would have looked at the submarket, says Tishman Speyer managing director Tony Womack. He’s seen interest from two Ballston-based tenants and US Fish and Wildlife looked in the Reston-Herndon area before going with Falls Church. That would have never happened two years ago, he says. Plus some buildings are getting 10% more in rents than they were 12 months ago.
Our panelists agreed that the Silver Line isn’t going to create a dramatic change and will be used as a commuter line, not necessarily a means to get to lunch. But Akridge VP David Toney sees some positive, since Reston already has the walkable street grid that other submarkets like Tysons don’t have. Plus the micro market created around Reston Town Center offers a mix of primary uses and creates demand for more retail.
Bechtel is a $37B engineering and construction company that relocated its global HQs from Frederick, MD, to Reston Town Center. It's moved 800 employees and 700 more are on the way. Principal VP Charlene Wheeless says Frederick no longer represented the company's future and chose Reston for its strong workforce and amenities. The international company also liked the proximity to Dulles Airport. (Betcha didn’t know Bisnow’s Mike Ponticelli doubles as a speaker podium.)
Fairfax County still has 20M SF of vacant office space, says Economic Development Authority president Jerry Gordon. The good news is that the number of businesses and employees is growing and unemployment is under 4%. The county is still relying on its strong sectors: IT, aerospace and telecom. Several government contractors call the county home, and despite sequestration, the federal government remains the largest buyer of goods. Several foreign-owned companies have also laid down roots in Fairfax, along with a high number of women- and minority-owned businesses. Jerry would like to fill the vacant offices with cybersecurity and translational medicine firms, two sectors that have a growing presence in the county.