National Landing's Retailers Are Counting On Strong Foot Traffic. Can Amazon Deliver?
As Amazon prepares to unveil the first new buildings of its HQ2 campus this summer — a pair of towers totaling 2.1M SF of office space — the tech giant and its development partner are adding a huge roster of retailers and restaurants to the area. The key question for the neighborhood now becomes: Will there be a big enough boost in foot traffic to support those businesses?
This critical period for National Landing, a neighborhood centered around the e-commerce behemoth, and the factors that need to be in place for its success were the topics of discussion at an April 18 Bisnow event at the Hyatt Regency Crystal City.
“Our focus has been to remake main street, Crystal Drive, to introduce new placemaking retail that draws people in,” said Brian Cotter, executive vice president of commercial leasing for JBG Smith, the developer partnering with Amazon on HQ2 and building its own mixed-use projects nearby.
“By the end of 2023, we’ll have introduced 35 new retailers to the street," he said. "By the end of 2024, that number will be 55 new retailers introduced to the National Landing neighborhood.”
Last week, Amazon announced it filled out the last of its 67K SF of ground-floor retail space at the new Metropolitan Park buildings with four more vendors: Taqueria Xochi, Toby’s Homemade Ice Cream, Mae’s Market and MoCA Arlington.
But for those businesses to succeed, the area needs to keep increasing its daily foot traffic. The panelists expect Amazon itself will help bring that momentum.
The company has already hired around 8,000 employees in Arlington, and it remains committed to hiring 25,000 total by the time both phases of HQ2 are complete. While the first phase is slated to deliver this summer, Amazon announced last month that Phase 2, featuring three office buildings and a silver helix structure, would be delayed indefinitely.
Amazon's employees will soon be mandated to be in the office more than half the time. In February, the company announced a three-day-a-week return-to-work policy, beginning in May.
“It's very fortuitous that they're moving into their new location, what, 40 days after, 45 days after the company has put the mandate out there that they need to be in the office three days a week,” said Gary Cook, senior vice president of leasing for Lincoln Property Co., which is leasing the Crystal & Clark mixed-use office complex down the road from Amazon.
“Hearing that directly from them, that is going to be the rule, not the exception," he said.
Cotter said daily office occupancy at National Landing is already “markedly higher than other places throughout metropolitan D.C.”
“I think our last publicly disclosed numbers were that peak day occupancy in our 6.3M SF was 71% of pre-Covid, which is drastically higher than anywhere else that we operate,” he said.
By comparison, office occupancy in the D.C. metro was at 44% of pre-pandemic levels last week, according to Kastle Systems.
Cotter said that is in large part thanks to the defense industry’s presence in the Northern Virginia region. The defense contractors located in the area around the Pentagon often do work that requires using sensitive compartmented information facilities.
“You can't do SCIF work for the Department of Defense from your couch,” he said.
The return to the office for Amazon and the surrounding National Landing community will be crucial for the retail that relies on foot traffic.
Sahil Rahman, co-founder of Rasa Indian Grill, felt the pain of remote work on his business when he first opened in Metropolitan Park, the fourth location for his fast-casual eatery.
“When we opened about a year, year and a half ago, it was not great. It was extremely slow,” Rahman said. “Because a lot of these government workers, a lot of the remote office workers are just not coming into the office.”
He said he is seeing a slow uptick, but it isn't back to where it once was.
“This used to be a five-day-a-week, like 50,000-office-worker absolute madhouse,” he said. “It's not there again today in this moment. But we are starting to see that Tuesday, Wednesday, Thursday pop. People are starting to come back.”
Peruvian Brothers co-founder and CEO Giuseppe Lanzone, whose popular food truck brand opened a permanent Crystal City location in April 2020, said he is hopeful that three days a week will make way for five.
“Right now, it's only going to be three days a week,” Lanzone said. “But you don't want to be missing out on the other two days of work. Otherwise, you're not going to keep going up on the corporate level.”
He has also seen a drastic change in the area’s vibrancy, a change he hopes will continue to fuel his empanada business.
“This used to be a calm, tranquil place that if you want to go party, you have to go across the bridge into D.C.,” he said. “Now I drive around here and I can barely recognize the place.
“It's unbelievable what the development is happening. We're very excited to be part of it, and I very much look forward to adding to this momentum.”
With that avalanche of development, though, comes growing pains in the navigability of the region.
“Some of that pain we're experiencing is that there is a lot of construction,” Rahman said. “Some of the sidewalks are blocked, things of that nature.”
“The walkability of this area needs probably the biggest push to get interconnectivity in all the properties and make people feel very comfortable to walk from one property to another,” he said. “How do you make this a thriving community? The walkability and making sure everyone feels comfortable, safe from vehicles, the mixing and matching of bikes, cars and people is an interesting mix.”
Tracy Sayegh Gabriel, president and executive director of the National Landing BID, said one project that will address that concern is the BID’s plan to turn Route 1 into “a truly urban, safe, green boulevard.”
“That will break down the major psychological barrier," she said.
In terms of transportation to the area, Metro access is at least nailed down. The Met Park buildings sit a short walk from the Crystal City and Pentagon City stations.
Lanzone said that is a huge boon for securing talent.
“A lot of people that we hire are people that take public transportation all the time,” Lanzone said. “You can open in a place like Great Falls, for example — it's a beautiful, beautiful town, but it doesn't have Metro, so it's hard to get talented people to go there.”
With that in place, Lanzone is excited to participate in the placemaking of the region. He brought alpacas to Union Market’s La Cosecha, where he has his first brick-and-mortar empanada shop.
And he said he is waiting for the moment he can bring the furry friends to “the sidewalks of the Metro Park.”