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Can West End Survive?

Washington DC Office

DC's West End was once a hotspot for law firms, associations, and other major tenants. But it's facing some major and immediate vacancies. Does the area have what it takes to stay relevant?

JLL's Carroll Cavanagh (snapped this morning) has worked on several large recent deals in the West End and nearby Foggy Bottom and says that though the neighborhood has its naysayers, there are still major positives. Commuting patterns are stronger there than in other infill submarkets, he says, with Metro nearby and Rock Creek Parkway and Key Bridge. The proximity of the Georgetown waterfront, particularly the renovations former owner MRP Realty performed on the Washington Harbour property there "have been really well received." Another veteran broker tells us rental rates are also lower in the West End than points east downtown, and the abundance of hotels is another big plus. 

Nevertheless, the area has its work cut out when it comes to vacancy. Law firm Pillsbury will vacate almost 250k SF at 2300 N St (left, snapped yesterday) by the end of the year; and the Association of American Medical Colleges left 86k SF behind when it bolted for a new building in Mount Vernon Triangle this year. Both firms are leaving for modern, ultra-efficient spaces, and some observers wonder whether the West End's older building stock can compete with newer buildings and trendier neighborhoods with hipper amenities.

But that's not stopping hip retailers from opening up, like indoor cycling studio SoulCycle at 24th and M. (We snapped the grand opening party on Monday.) Having George Washington University nearby also creates a vibrancy that other neighborhoods can't match. Carroll says Boston Properties' large 2200 Pennsylvania Ave mixed-use project—next to Foggy Bottom Metro, with swank food options and a Whole Foods—has been "a shot in the arm." (Something GW Hospital probably also provides.) A flurry of activity at properties like the Watergate and investor demand for West End buildings like 2401 Penn and the AAMC buildings on N Street are keeping the neighborhood well-balanced, Carroll adds. He's keeping an eye on what happens with the Advisory Board Company and its large office requirement, currently located not far away from SoulCycle on M Street.