Southwest DC, an area once perceived as an uninteresting and inferior part of town, has become a thriving neighborhood and a revered destination for visitors. As a recent BisNow article notes, people are flocking to this section of our nation’s capital for its entertainment, its rising food scene and lodging, not to mention a remarkable waterfront experience and the allure of one of Major League Soccer’s hottest teams. And now that Southwest DC has a legitimate “it” factor, the commercial real estate market there has seen significant changes. When years ago there was nothing of importance in the area, it is now seeing a demand for — and the development of — high-end hotels and high-rent apartments. So what’s the cause of the turnaround? What has turned this forgotten location into a commercial real estate investor’s dream?
Southwest DC is No Longer Boring
Photo Courtesy of wharfdc.com
One of the first factors to start driving people to Southwest DC is The Wharf. With its first phase completed, this mile-long stretch of land has brought life to the eastern shore of the Potomac. It is packed with a variety of restaurants, retailers, businesses and residences, and it boasts incredible views and a vibrant culture. It gives residents a daily hangout space and visitors a reason to explore the area.
There’s also the recently opened Audi Field, another drivers of visitors to Southwest DC. With the MLS’s explosion of popularity comes the need for a modern stadium for its teams, and DC United is no exception to the rule. When Audi Field opened its doors on July 14, 2018, soccer fans from all over the DC Metro area began flocking to Southwest DC to cheer on their team in a modern stadium setting.
It should also be noted that one of the reasons for this uptick of interest in the area is the amount of land it had available to develop. In DC, there’s not too many places left where expansion is an easy proposition, which is why so many developers bought up land in the southwest. DC continues to grow, and the land available for development in Southwest DC made it a logical place for expansion.
A Need for Lodging and Housing
Of course, as any area begins to become popular with visitors and incoming residents, people are going to need places to lodge and live. And due to the types of businesses and amenities that were coming to the area, developers started planning and building high-end hotels and premium apartment buildings.
Near Audi Field, Donohoe Hospitality is developing the Cambria Hotel & Suites. While Donohoe previously put in both a Holiday Inn and a Residence Inn into Southwest DC, the Cambria represents an understanding of the direction the area is heading. While Southwest DC was once unable to charge rates on par with those in the northwest, the area can now not only compete with the northwest, it can even find opportunity to demand a premium.
Also in development is mixed-use buildings such as a hotel and apartment building being developed by CityPartners. This building will feature 252 hotels rooms for European hotel brand CitizenM, as well as 196 apartments. CityPartners understands that while The Wharf is one of the major drivers of visitors to the area, it’s Southwest DC’s growth as a whole that is making these new developments possible.
And as far as housing goes, developers and real estate investors are preparing for the influx of new residents with a wide range of high-rent apartment buildings. As the area becomes more popular with affluent visitors, it is quickly becoming seen as a place to live. That’s why developer Ruben Cos. is constructing their second apartment building in the area — a 300-unit project — as well as buying up other land for future development. Then there’s Republic Properties, which is building a 373-unit apartment building.
Southwest DC is Just Getting Started
It’s clear that this is just the beginning for Southwest DC. The Wharf is only finished with its first phase — there’s still more to come down the road. DC United is drawing more and more people to the area as well. And as more businesses find their way into the burgeoning area, the need for more housing and lodging will increase as well. This is why developers and real estate investors are becoming far less shy with Southwest DC than they used to be. There’s opportunity to be had, and the time is now for those who want to get in on the remaining assents.