Alexandria's Skyline Is In For Some Big Changes
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Drivers taking the Beltway east over the Woodrow Wilson bridge into Maryland are now welcomed by the sight of the sleek MGM National Harbor resort and casino, but those heading in the other direction will soon have a futuristic-looking building of their own to look upon.
The 34-story Alexandria residential tower JM Zell has planned, rendered above from different angles, will define this section of the NoVa skyline, CEO Jeff Zell says. Jeff will be a speaker at Bisnow's State of Arlington and Alexandria event next week.
The building, a JV with Hines, is Phase 1 of Carlyle Plaza Two, JM Zell's planned four-building development along I-495 at the southern tip of the Eisenhower East neighborhood. It has been going through the design review process since the city council approved the project in 2012.
"The city wanted something so when you come across the bridge, that this building will kind of be the beacon and the trophy landmark building of Alexandria," Jeff says.
Alexandria is not known for its tall buildings, but Zell's 355-foot tower is just one of several high-rises coming to the Eisenhower Avenue corridor. A few blocks west, Paradigm Development delivered its 25-story, 505-unit Parc Meridian apartment tower this summer. About a mile farther west on Eisenhower Avenue, Rushmark Properties will break ground early next year on two residential buildings that will reach 14 and 23 stories and total 540 residential units.
That many rental units coming to the neighborhood at once could be cause for concern. The Eisenhower corridor has an absorption rate of roughly 16 units per month, Jeff says. Parc Meridian seems to be outpacing that average, though, leasing 160 of its units from April through September, according to Delta's latest multifamily report.
"You’ve got to be careful, because too much density it could be too much, absorption has not been there," Jeff says. "There’s an element of caution we're all looking at."
Jeff plans to break ground on the Carlyle Plaza Two's first residential building by the end of 2017, giving it an expected delivery of late 2019. He hopes this time period will allow Paradigm and Rushmark's projects to fill enough units so there will be more demand by the time his finishes. Building the apartment tower will cost roughly $150M, and Jeff says he is close to getting a commitment from two lead investors to finance the project.
After the delivery of the residential building, Jeff has no set timetable for starting construction on the development's three other high-rise buildings, planned for one more residential and two office.
The developer has already gotten approval for one of the office components on the site, the two-building 765 John Carlyle St, rendered above, totaling 368k SF. Jeff says the site is ready to break ground but he is waiting to get at least 70k SF or 80k SF pre-leased before starting construction, which he plans to do one building at a time.
"One thing people have to realize about Eisenhower is it has always been a slow-go corridor," Jeff says. "In Tysons, you could see two or three go up at once, but you’ll never get more than one building at a time here. Once one is up and done, we'll go from there."
Because of the uncertain office market, Jeff is in discussions with a potential partner to change one of the planned office components into a hotel/condo building. But he is still in wait-and-see mode, and the fate of the development's future phases will largely hinge on the success of the first apartment building.
Federal government employees make up a big chunk of the area's multifamily tenant base. The corridor is anchored by the US Patent and Trademark Office's campus across Eisenhower Avenue from JM Zell's site. Another driver of multifamily demand will be the National Science Foundation's 660k SF HQ, a two-building development at 2415 Eisenhower Ave, right next to the Metro, that could deliver by year-end.
Alexandria Economic Development Partnership president Stephanie Landrum says the addition of NSF will create the demand for high-end apartments that Paradigm, Rushmark and Zell are hoping for.
"One of the great things about the NSF is a number of employees are temporary, they stay for two years or so," Stephanie says. "What Ballston has seen with NSF being there is a lot of professionals live in apartments close to the HQ."
Directly adjacent to Zell's site, Perseus Realty has its eye on a mixed-use development of its own. In April, the firm bought the above 13.5-acre site, which is filled with one and two story buildings occupied by a gym, multiple restaurants, flex office and a parking garage.
The existing tenants will allow Perseus to keep bringing in revenue while it plans a potential development for the site. The developer is considering a mix of office, residential, retail and hotel.
"We believe our site has a lot of long-term potential," a spokesperson for Perseus CEO Bob Cohen tells Bisnow. "We're trying to figure out the best way forward to start on a large, mixed-use project."
Stephanie says the city would likely welcome more mixed-use development on Perseus' site, signaling the possibility of even more high-rise towers on Eisenhower.
"I would expect the city is going to encourage that, because the small-area plan that gives the vision for this area really encourages these taller heights," Stephanie, pictured above with Brendan Owen, Val Hawkins and Chris Hartman, says. "These properties sit adjacent to the Beltway, so they have great visibility, the vision is definitely good for tall, 20-plus-story mixed-use buildings."
Jeff, Stephanie and Bob will discuss the Eisenhower Avenue corridor at Bisnow's State of Arlington and Alexandria event next Wednesday.