8 Types Of Retailers Looking To Open In The D.C. Area
The D.C. region has not been immune from the nationwide spate of retail closings, from suburban department stores to downtown restaurants, but several types of retailers are looking to grow their presence in the market.
Retailers, developers and local officials, speaking Monday at the International Council for Shopping Centers Mid-Atlantic Conference in National Harbor, discussed the growth plans for a series of retailers from coffee shops to fast-casual restaurants to fitness studios.
Coffee And Breakfast Concepts
First Watch, a breakfast restaurant with over 365 locations nationwide, is looking to open around 50 new U.S. locations this year, including six to eight in the D.C. area, First Watch Director of Real Estate Jason Mallette said.
The concept currently has locations in Fairfax, Chantilly, Gaithersburg, Rockville, Bowie and Laurel, and Mallette said it continues to look in the Maryland and Virginia areas. He said the breakfast segment of the food and beverage industry has grown by a significant amount over the last decade.
"The growth of breakfast has really opened up a huge pool for us to slide through," Mallette said.
The District also has a growing breakfast retail scene and has welcomed a host of new coffee shops. Brands such as La Colombe, Blue Bottle Coffee, Compass Coffee and others have grown their D.C. footprints in recent years.
"I'm amazed in Downtown D.C. how many coffee shops continue to open," Washington D.C. Economic Partnership CEO Keith Sellars said. "It speaks volumes to the buying power of people who are working downtown who will pay $4 or $5 for a cup of coffee two or three times a day."
The explosion of fast-casual concepts has continued across the D.C. region for several years, with quick-service retailers offering cuisines from Mexican to Indian to Mediterranean, and the sector's growth does not appear to be slowing down.
Mezeh Medditeranean Grill launched seven years ago in the Annapolis Mall food court before opening its first stand-alone location in Crystal City in 2015. The concept now has 20 locations, 18 of them in Maryland and Virginia. Mezeh co-creator Steve Walker said the concept is planning to open 12 additional locations by the end of this year and it continues to look for more growth opportunities.
Walker said Mezeh looks for spaces of around 2,400 SF with a 500 SF patio, in areas with highly educated, high-income residents.
"We would definitely like to be in an area with businesses and offices, as well as retail and grocery stores," Walker said. "We attract people who are looking for healthy options, and we also have a large variety of vegetarian and vegan options, which is becoming more demand-driven."
Another growing retail sector that shows no signs of slowing down is fitness. From high-end brands like Equinox to more affordable options such as Planet Fitness, new gyms continue to open across the region.
Michele Dodd, who leads the real estate efforts for a Planet Fitness franchisee group with 80 locations, said her group plans to open 12 to 15 more this year, including four in Northern Virginia. She said the brand typically leases locations between 18K SF and 22K SF. One of the benefits of bringing a fitness concept into a shopping center, Dodd said, is the steady stream of customers it brings.
"Planet Fitness brings a lot of traffic into centers, but it doesn't bring traffic in at one time, so it doesn't create a traffic issue," Dodd said. "People work out all during the day, during the morning, lunch evening and weekends, so our traffic is pretty steady."
In addition to full-service gyms, a host of specialty fitness studios have opened across the region. Edens Managing Director Jessica Bruner said developers can benefit from bringing in a series of smaller fitness retailers, such as Solidcore, Zengo Cycle, SoulCycle, Orangetheory Fitness and others.
"A fitness row is frankly a really great option because those deals are a lot easier to manage than some of the larger gyms," Bruner said. "It's really about what size fits that project."
European Grocery Stores
German discount grocer Lidl established its U.S. headquarters in Arlington in 2015, and the company announced last year it plans to open a 29K SF new location at Skyland Town Center in Ward 7. Aldi, another German discount grocer, has more than a dozen locations in the region. Sellars said he has seen continued growth from European grocery stores, especially in underserved neighborhoods.
"We've had a lot of success in talking to European retailers," Sellars said. "They understand urban environments and are more open to going into emerging neighborhoods than American establishments [are]."
Lerch, Early & Brewer principal Stacy Plotkin Silber, a land-use attorney who engages with the community on developments, says D.C. residents have given Lidl a warm welcome.
"Lidl has had a lot of growth in this area and done really innovative job of going into different markets, being adaptive to requirements and really being extremely well-received by the community," she said.
Child Care And Children's Clothing
Concepts that cater to kids, from early education to day care to children's clothing stores, have been growing in the region and continue to be in high demand, Sellers said.
"One of the things we request as far as services in the District has been day care centers," Sellers said. "The city has grown, and with the growth of newborn residents, there's a need for child care."
Eastbanc principal Philippe Lanier said the trend of urbanization, with more people raising families in the city rather than the suburbs, is increasing the demand for retailers that sell children's clothing and accessories, plus child care concepts.
"D.C. was historically a city where people worked and lived outside it, but that is changing rapidly," Lanier said. "Children's clothing, day care, play groups I think would all be a big hit in D.C."
New bank branches have continued to open on street corners throughout the city, with JPMorgan Chase in 2018 announcing plans to expand rapidly in the D.C. area with up to 70 branches. Lanier said he has been surprised with how many banks have opened recently.
"It's interesting how many banks are coming back," Lanier said. "You would think that business model is dead, but they are somehow with technology evolving and still attracting customers and expanding branches."
In addition to urban street corners, banks are also expanding with pad sites in the suburbs, Plotkin Silber said.
"From a retailer perspective, those that are very active are those that are doing pad site developments, taking older shopping centers and trying to put in a pad," she said. "The banks are still very active in doing that."
Dog Haus has more than 50 beer gardens around the country, including locations in Bethesda and Gaithersburg, and it is looking to open three or four more locations in the D.C. region in the next 18 months, Dog Haus franchisee Faizan Khan said. He said the locations tend to be about 2,400 SF.
"We try to keep things fresh," Khan said. "We're very celebrity-oriented. Food Network chefs do all of our recipes, and Bar Rescue does the cocktail component ... Our marketing is very hip, it's nationwide with a hyperlocal application."
Eat-In Movie Theaters
New movie theater concepts that serve food and drink have expanded across the D.C. area, such as Alamo Drafthouse, Landmark Theatres and iPic Theaters. Studio Movie Grill signed on last year at Mill Creek Residential's mixed-use project in Falls Church. The theater is slated to open in 2021 as its first in the D.C. region.
Studio Movie Grill founder Joseph Harberg said his company created the dine-in theater experience 27 years ago, and it now has 34 locations and is continuing to grow. Harberg said Studio Movie Grill plans to open six new locations this year, and about eight to 10 per year in the future. He said it is is interested in adding more D.C.-area locations. Its theaters tend to be about 40K SF, he said.
"We think we're very accretive to a shopping center, whether a neighborhood center or a mall," Harberg said. "We bring in a lot of traffic in, we bring 700,000 to 1 million people a year to our theaters."