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Walter Reed Hospital Redevelopment Lands Whole Foods As Grocery Anchor

A 66-acre development in Northwest D.C. has landed one of the most coveted grocers as an anchor tenant. 

An aerial rendering of the Parks at Walter Reed development

Whole Foods signed a 40K SF lease at the Parks at Walter Reed, a 3.1M SF redevelopment of the former Walter Reed Army Medical Center campus on Georgia Avenue, the development team announced Friday. 

The store will anchor the third phase of the development, a 323-unit apartment building branded as The Hartley. The building will be part of the development's town center portion fronting a central plaza. It is expected to break ground early next year and deliver in early 2022. 

"It will be catalytic for the development," D.C. Interim Deputy Mayor for Planning and Economic Development John Falcicchio told Bisnow Friday. "This will be the anchor in the town center and allow it to really take shape, that's why we're so excited Whole Foods has announced."

The development team of Urban Atlantic, Hines and Triden is building the Parks at Walter Reed project through a ground lease with the District, signed in 2016 after D.C. bought the property from the federal government. CBRE + Streetsense is managing the project's retail leasing, and the architects include Torti Gallas Urban, Hickok Cole and Oehme van Sweden. 

The project welcomed its first residents in October, with the opening of 77 units of affordable housing for formerly homeless D.C. veterans. The team broke ground earlier this year on the next residential phase, set to include 301 apartments, 89 condos and 18K SF of retail.

Children's National Health System broke ground in November 2018 on a pediatric research center on a 12-acre portion of the Walter Reed campus, expected to open next year. 

A rendering of the central plaza in the Parks at Walter Reed development, with the grocery store on the left

At full build-out, the project is planned to include over 2,100 residential units, 185K SF of office, 130K SF of retail, 200 hotel rooms, 116K SF of medical space, 30K SF of arts and cultural uses, two charter schools and 20 acres of open space. 

The opening of a Whole Foods has been shown to have significant effects on a neighborhood's real estate market, such as rising property values and increased rentals. Urban Atlantic Managing Director Vicki Davis said prospective residents have frequently asked about the grocery store.

"We have new homebuyers coming to the site as well as new residents and they're very anxious. It's their most often asked question: 'Who's coming as a grocery store?' Davis told Bisnow. "It will be such a complement to the development. It has the best parks, the best open spaces, the best frontage along Georgia Avenue, the best town center, and to have Whole Foods speaks to the overall quality of the development."

The nearest grocery store to the Walter Reed campus today is the Safeway at Georgia Avenue and Van Buren Street. The nearest Whole Foods to the development is over 2 miles away in Silver Spring. Falcicchio said he expects the new Whole Foods will keep more D.C. residents spending their grocery money in the District. 

"One benefit for the District is a lot of folks who live in upper Ward 4 go across the line out into the counties for grocery opportunities, so this allows us to capture some of that spending right here in the District," Falcicchio said. 

The store would be the seventh Whole Foods in the District, following a new Shaw location planned to open next year. The grocer most recently opened in the Capitol Riverfront neighborhood last year and on H Street NE in 2017.

Whole Foods is owned by Amazon, the tech giant that the District courted last year before losing out to Northern Virginia in the HQ2 competition. Former D.C. Deputy Mayor for Planning and Economic Development Brian Kenner now works for Amazon, tackling regional development issues.