Amazon's Arlington Campus Is Drawing Developers To A Nearby, Underbuilt Metro Station
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With preparations beginning for the Amazon HQ2 campus at National Landing and the associated Virginia Tech campus at Potomac Yard, development activity is ramping up in neighborhoods around nearby Metro stations.
One stop south of the future Potomac Yard station, Alexandria's Braddock Road station has several development sites at various stages, from apartment buildings preparing to break ground to Metro-adjacent properties in need of developer partners. Developers, brokers and city officials expect the two major campuses coming within a 10-minute Metro ride of Braddock Road will be a spark to move forward projects that have been planned for several years.
"The plan for Braddock Road was adopted in 2008 and the market kind of collapsed. For the last 10 years, the community has been waiting to realize this new density and development in the neighborhood," Alexandria Economic Development Partnership CEO Stephanie Landrum said. "All of a sudden, the market has recovered and we have these two new catalysts that are going to create demand for these projects."
Amazon in November announced it would bring 25,000 jobs and occupy at least 4M SF of office space in a second headquarters at National Landing, comprising parts of Arlington's Crystal City and Pentagon City neighborhood. Along with that announcement, Virginia Tech unveiled plans for a $1B innovation campus 1 mile south in Potomac Yard. The new Metro station at Potomac Yard is expected to open by 2022, and just one stop south of that, developers at Braddock Road hope to benefit from the major new economic anchors.
Less than a half-mile north of the Braddock Road station, Avanti Holdings Group is planning a 115-unit apartment building with 17K SF of retail. The developer received approval for the project in September, and it plans to break ground this summer, Avanti principal Teddy Kim said.
The project at 1200 North Henry St. sits at the northern edge of Old Town Alexandria, a historic waterfront community with a host of restaurants and other amenities. Kim expects the quality of life in Old Town and close proximity to National Landing will attract Amazon employees to live in Avanti's new apartments.
"We think that with all of the excitement, people will choose our area to live in because there are so many walking amenities, you're on the grid system and have the Metro right next to it, and people making the move are interested in an established market," Kim said. "I think we'll have some advantage over the redevelopment happening in National Landing."
The Pentagon City and Crystal City neighborhoods have existing housing and new multifamily projects planned with developers expecting to achieve rent increases from Amazon coming, but Kim thinks those benefits could spill over to Braddock Road.
"I think we will see more demand for units, and that, of course, will drive up prices," Kim said.
Next to Avanti's site, the future phases of the Braddock Gateway development are expected to move forward soon. The 270-unit first phase of the project was delivered in 2017 by Trammell Crow. Phase 2 is planned to include 258 units, 8K SF of retail and a 28K SF park, and Phase 3 calls for 370 apartments with 3,700 SF of retail.
Jaguar Development received approval in June 2017 for the second phase, but it sold the Phase 2 and 3 parcels to Carmel Partners four months later. Carmel received approval in December for Phase 3 of the project. The developer declined to comment on the timeline for the next phases.
Landrum expects both Avanti's and Carmel's projects will receive apartment demand from the Virginia Tech and Amazon campuses. She said AEDP conducted a study that projected roughly 5% of Amazon's 25,000 employees would live in Alexandria, adding at least 1,000 new households to the city's housing demand. She said the new projects include components that could be attractive to Amazon employees, such as dog parks.
"Amazon absolutely has a huge dog culture, so as we continue to build communities that are not only attractive to urban-minded residents, we are also building communities friendly to pets and kids," Landrum said.
The owners of three additional development sites within a half-mile of the Braddock Road Metro station will likely seek development partners in the coming years, creating opportunities for new players looking to get in on the action.
Directly adjacent to the Metro station, WMATA owns a 2.1-acre site, currently a parking lot, that it has envisioned for development. The transit agency in 2016 conducted a development analysis that found the site could support a 200-unit condo building and a 100- to- 200-room hotel, plus retail.
WMATA has not released a request for proposals for the site, and it declined to comment on plans to issue a solicitation. But the agency has reached deals to build on several other Metro-adjacent development sites in the region, and Landrum expects this one could move forward soon.
Three blocks east of the Braddock Road station, a Post Office property has also been envisioned for development. The low-rise building and adjacent surface parking lots at 1100 Wythe St. is owned by the U.S. Postal Service.
USPS has not put the site on the market or solicited development proposals, but Landrum said a plan conducted several years ago found the site could support 174K SF of development, including multifamily, office or retail components, and a 1-acre urban park. She said AEDP plans to engage in discussions with USPS this year about the prospects for developing the site.
"Given all of the other activity and these new catalysts, now is the time," Landrum said.
One block east of the Braddock Road station, in between the WMATA and USPS sites, a 3.5-acre public housing community has also been eyed for redevelopment. The Andrew Adkins community consists of 90 affordable apartments, constructed in 1969.
The Alexandria Redevelopment and Housing Authority had been working with Clark Realty on a plan to redevelop the property into a 476-unit project, including replacements for the public housing units. ARHA in August scrapped the plans and terminated its partnership with Clark, saying the project was no longer financially feasible.
ARHA CEO Keith Pettigrew tells Bisnow the agency is conducting an assessment of its entire portfolio to determine which properties make the most sense to redevelop in the short term. Once the assessment is complete, Pettigrew would develop a strategy with ARHA's board regarding its next steps, including potentially reviving the Andrew Adkins project.
"We're excited about Amazon, but that means all of [ARHA]'s properties are valuable now," Pettigrew said. "We're well aware that the Metro station is a hot area. It is our most expensive piece of property, so we want to make sure whatever we do is the best thing for the agency and residents."
In addition to spurring new residential developments, Amazon moving nearby could also improve the office market around Braddock Road.
The four-building Braddock Metro Center complex sold in late 2017 from WashREIT to Kawa Capital Management for $79M. Three of the buildings are near full occupancy, but the one at 1310 Braddock Place is in need of a tenant after the National Industries of the Blind moved to Potomac Yard.
Kawa retained Cushman & Wakefield to sell that vacant 41K SF building, though it intends to hold the rest of the property. Cushman & Wakefield associate Kaleigh Jones, who is working with Kawa to sell the building, said activity has increased at the property following Amazon's announcement.
"There are a lot of groups that are really hoping to have the opportunity to purchase this asset," Jones said.
Landrum also said AEDP saw an increase in activity in Alexandria office space following the Amazon announcement and has a large number of tours lined up in the coming weeks.
"As part of the Amazon announcement, we're making investments in transportation and connectivity that benefit not only Amazon but any other company," Landrum said. "That's part of what we're talking about to new tenants who are looking at Braddock."