In Turbulent Times, Developers View Prince George's County As A Potential Safe Haven
Despite the relative stability the federal government provides to the D.C. economy, developers have begun preparing for a slowdown in construction as interest rates rise and the economy potentially enters a recession.
But while new projects are becoming harder to finance, some developers have begun to see emerging areas like Prince George's County as the smart place to bet on future growth. The county is well-positioned because of its available land and emerging economic engines, plus it is set to benefit from a record level of new infrastructure investment, developers say.
"If you are a developer, business owner, entrepreneur, etc., and you are looking for what is your 20-to-30-year pipeline of next deals, then Prince George's is the place to look," Prince George’s Deputy Chief Administrative Officer of Economic Development Angie Rodgers said at Bisnow’s Future of Prince George’s County event on Oct. 17 at The College Park Marriott Hotel & Conference Center. "We are inviting people to come and play the long game with us."
The county has significant wind in its sails via public infrastructure funding this year alone. In April, the state approved a record $2.5B in aid to the county, including $400M in bonds for development and $20M for infrastructure improvements along Metro's Blue Line corridor. There has also been federal investment, including a $20.5M RAISE Grant from the Department of Transportation and the siting of facilities for the Bureau of Labor Statistics and Bureau of Engraving and Printing within county lines.
The potential relocation of the FBI headquarters to the county could also spur a surge of investment. Two of the three finalists are located in Prince George's County, and the state has already agreed to at least $200M in infrastructure funding for a headquarters site should the agency, in coordination with the General Services Administration, pick Greenbelt or Landover.
"Just objectively, this is the best site for the FBI," County Executive Angela Alsobrooks said. "We're anticipating that this decision will be done by year’s end."
Even without the FBI, developers are bullish about the county's commitment to transit-oriented development, viewed as a safer bet in difficult economic times.
That includes a former Metro-owned property near the newly renamed Downtown Largo Metro station. Banneker Ventures purchased the lot at 9400 Lottsford Road last year from WMATA for $3M, property records show.
The developer is now planning a multiphase mixed-use development with roughly 800 units and 70K SF of retail, Banneker Ventures Development Director Carri Cowan said at the event. The project doesn't appear to have been previously reported.
Banneker's project is in an area that has received plenty of public investment and attention in recent years.
Last summer, the 620K SF University of Maryland Capital Region Medical Center opened with $400M in public investment. The county has also proposed moving 800 employees, including its planning department, to an office campus near the Downtown Largo Metro, a process that is still pending county approval. Previously, it opened the Wayne K. Curry Administration Building in 2018 as part of its plan to create a downtown center anchored by county services in Largo, near the center of the county.
“We’re right across the street from the county administration building, so we’ll wave hi to Angie and Angela as much as we can,” Cowan said. “We’re really excited about creating a mixed-use, dense space and really transforming what is today a more rural feel, a suburban office park feel, to Downtown Largo.”
Cowan said rent growth in the area also appears to be trending in the right direction, up 9% since March 2020 and 11% year-over-year in Largo. Moreover, she said that “bright spots” continued to shine in Prince George’s County, despite the economic murkiness, and credits the county’s proactiveness in chasing public dollars as a big reason why.
“From a data standpoint, from a deal-penciling standpoint, there's still a compelling story to be told,” Cowan said. “Finding partners in the county in terms of helping us access resources — state-level, federal-level — to make things work is the approach that we’re taking.”
Urban Atlantic has continued to advance its 2.5M SF New Carrollton mixed-use development this year, most recently with the groundbreaking of the all-affordable, 291-unit The Margaux in June. That project, backed by Amazon, WMATA and EagleBank, follows the development of offices for Kaiser Permanente and WMATA, as well as the delivery of the 282-unit Stella apartment project last year.
Those projects stand to benefit from the RAISE Grant, which will fund a new multimodal station and train plaza connecting Amtrak, MARC and Metro trains to the incoming Purple Line light rail system.
"It's kind of incredible ... that investment in infrastructure," Urban Atlantic Managing Director Caroline Kenney said. "Let's make hay with that for the next couple of years, and as we start to come out of whatever's to come here in these next six months, we'll be really well-positioned and be glad that Prince George's is the place where we chose to invest."
Meanwhile, the Purple Line is expected to open 11 stations in Prince George's County in 2026, including its eastern terminus at New Carrollton, and developers have already been drawn to sites nearby.
Perseus TDC partner Nihar Shah said he is looking at several Purple Line-adjacent sites for his firm’s next move. He praised tax credits the county has provided to support development but said Perseus narrowly managed to secure financing for its Residences at The Six project before interest rates shot up.
“It has been chaotic — interest rates are sky-high right now,” Shah said. “It was more luck than skill that we closed on the Hyattsville job in May and we locked in the interest rates we did with our lender.”
Still, Shah said he is optimistic about future development in the county, and he’s open to any opportunity he can get along a transit corridor.
Other economic engines in the county are lining up around transit. The Purple Line includes five stations on or near the University of Maryland campus, between which students, faculty and staff can ride for free. Brandywine Realty has bet big on the university’s expanding research park, branded as Discovery District, with its Discovery Point project.
The more than $300M project just outside of the university's main entrance is slated to feature multifamily, retail and 550K SF of office space at full build-out, despite the softening office market regionwide.
John Norjen, a senior vice president and managing director at Brandywine, said he is confident in the project's office component. He cited the Purple Line and the proximity to 41,000 undergraduates as built-in differentiators for the project in a county that sees new Class-A office space less often than neighboring jurisdictions.
"Companies are basing their location decisions more and more on access to talent," Norjen said. "There's no better place, probably in the region, than right across the street from where thousands of science and technology grads are graduating each year."
The demographics may also be in Prince George’s County’s favor, especially if it can keep its recent graduates and continue to attract younger workers, Bozzuto Development manager Nick Umosella said.
Umosella said he likes the fundamentals in the county and said it is important to keep permits and preparation moving forward for new development during a downturn so that debt and equity providers will be eager to finance those projects once the market stabilizes.
“If you have the courage to find good deals now and forge ahead and get them shovel-ready … [those] projects are going to be the first ones they build,” Umosella said. “You really have to have the courage to keep those deals going when it’s kind of murky on the forefront, and I think it’s super important because those are the projects that are going to make a difference here in Prince George's County.”