Apartment Glut Along D.C.'s Waterfront Pushes Developers To Try New Concepts

Nowhere in the D.C. metro region has there been more new apartment deliveries this year than in a trio of neighborhoods along D.C.’s waterfront.

Navy Yard, Buzzard Point and the Bridge District have each welcomed developments with hundreds of new apartments, creating stiff competition between landlords. At least three buildings are offering up to four months of free rent. 

Beyond giving concessions, some developers of new apartment buildings in these heavily saturated neighborhoods are introducing new types of rental concepts to differentiate themselves in the market. 

In addition to the 1,000 new apartments they delivered this year at The Stacks in Buzzard Point, Akridge and National Real Estate Development opened a coliving concept in one of the buildings. The 106 furnished suites, most of which have three to six bedrooms and shared bathrooms, range from $1,225 to $2K per month for a bedroom. 

The developers had initially signed a deal with Common, but after the coliving company went bankrupt last year, they tapped Greystar to manage the suites. 

“It was a bit of a gamble because none exist this large in D.C.” Akridge Vice President of Development Kristin Connall told Bisnow while sitting in the lobby of the Colette building, which is part coliving.

She added that the concept seemed interesting to incorporate into the development, “with such a significant amount of product coming online at once, to help diversify the product offerings and not necessarily have as much traditional stuff that's competing against each other.”

The Navy Yard-Buzzard Point submarket had 1,281 apartments open last year and is projected to deliver 1,591 this year, according to Newmark. Plus, the Bridge District development delivered 757 units this year directly across the bridge from Navy Yard. 

“Right now, what's occurring is to fill up these spaces sooner and to get leases signed sooner, a lot of the owners are offering very nice concession packages, especially in Navy Yard and Southeast,” Carolyn Bates, Newmark mid-Atlantic research director, told Bisnow.

The Navy Yard submarket experienced the largest apartment unit growth of any submarket in the region in the first half, according to Cushman & Wakefield. 

In addition to The Stacks, Buzzard Point gained 501 new units when Toll Brothers delivered Vermeer late last year. 

Navy Yard added 467 units to its inventory this summer when Brookfield delivered its Urby building at The Yards. Across the Anacostia River, Redbrick LMD brought online its first three apartment towers at the Bridge District this winter, adding 757 more units to the supply.

With all the new product, the submarket’s 5.2% vacancy rate is tied with Northeast D.C. for the highest percentage of unfilled units in the District, according to C&W. 

This has led developers in the neighborhood to look for ways they can quickly fill the new buildings and compete with the other offerings around the corner.

The Stacks, Vermeer and the Bridge District are all offering up to four months of free rent, typically for renters that commit to more than one year, according to their websites. 

“Most people who come in are shopping the other product because — Navy Yard, Southwest — there's so much new product within the last decade, right?” Akridge’s Connall said. “So it's like, I can find something that's 3 years old, or I can sign something that's brand new, so for sure, we find people are shopping around.” 

Floating-rate loans create pressure for developers that need to lease up to cover their monthly debt payments. 

“As every month goes by, if your pace isn't hitting what you need it to be, then we're ensuring that we're adjusting those specials that we talked about to try to drive that pace,” Connall said. 

At the Bridge District, developer Redbrick introduced a short-term solution to tamp down the pressure of executing more than 750 traditional leases.

For its first two years, the developer has decided to operate one of its three towers as a short-term rental property. Redbrick brought on Barsala to operate the 145-unit Poplar House in March, shortly before the short-term rental company was acquired by Landing. 

“The idea was to bring down the number of units that we were having to lease in the first push in a delivery, and also to bring heads in beds, which will help the retail on the ground floor to have just more bodies there in the neighborhood, more active people walking around,” Redbrick Head of Development Sohael Chowfla said.

The average stay for the building is between two and three months, and rents range from $3,750 to $5,700 per month. The short-term housing is about 40% leased, according to Chowfla. The developer is hoping that some of the short-term rentals translate to traditional leases at the development.

“It helps with lease-up,” he said. “It helps to bring bodies to the neighborhood. It helps with operating costs for the project, because you're getting some revenue. And it brings some diversity of living type to the neighborhood.”

Developers also see these coliving and short-term rental concepts as catering to the kind of apartment demand that exists in the nation’s capital. 

“Obviously, any major city has some element of transient to it, but D.C. that much more so, just given our political cycles here and how much consultancy there is in D.C., how many folks are flying in to do political consulting, aero-defense consulting,” Connall said.

The push to fill up these new developments comes at a volatile time for the District, with the Trump administration slashing federal jobs and moving some agencies away from the region.  

D.C. has had the highest unemployment rate in the U.S. over the last three months, with its rate rising from 5.3% in January to 6% in July, according to the Bureau of Labor Statistics. Local officials project D.C. will lose 40,000 federal jobs by 2029.

Chowfla and Connall said they didn’t think the federal cuts were negatively affecting their lease-up, and they said they expect to see a boost from the Trump administration’s return-to-office push.

“They need to come into work, right?” Chowfla said. “And so you need to figure out where to come and live in the city again. And while you're trying to figure out what you want to do, you get a short-term rental.”