As the cranes continue to climb on the tail end of an election cycle, high-end developers combat economic and political uncertainty with the appeal of amenities and service.
Westlight, a Foggy Bottom condominium building by EastBanc, saw nearly a dozen people camped out overnight when its first contracts were released this November.
We sat down for this issue’s real estate roundtable to discuss how the rental market fares during the political turnover. What we discovered instead—over fifteen courses on the rooftop of Rose’s Luxury—was a much broader conversation about the flat-living (i.e., rentals and condos) market, and what the latest developer to enter DC, Related Companies, is bringing to it.
Editor’s note: Related’s first DC venture, One Hill South in Navy Yard, opens in February. Urban Pace is a new construction sales and marketing firm recently acquired by Long & Foster.
How does the election affect the real estate market? Matt Dewey: The word I’ve heard a lot is “uncertainty.” We say we’re in the seventh or eighth inning right now [of an economic cycle], and I think there’s just some uncertainty. Elsa Huxley: The market tends to slow down pre-election as buyers and sellers wait to see what effect a new administration, or new administration appointments/congressional staff changes, may have on inventory. Brent Jackson: It’s a common myth that there is a huge change over with a new administration. Mandy Mills: Most politicians go from public sector to private and vice versa.
Still, there is notable movement, and an uptick in rentals. What are these new DC residents looking for in terms of amenities, lease terms, and location? Dewey: Proximity to work is very important, so location is key. The areas of most interest are along 16th Street and 14th NW due to access to the White House, as well as SE Capitol Hill. The buyers typically look for larger unit sizes because they’re relocating from somewhere where space is less of a premium.
A pool, lush lawn, pet run, outdoor kitchens, and a dramatic view help to set apart the rooftop of One Hill South in DC’s luxury apartments market.
Jackson: Close proximity to the US Capitol, because they typically have long, grueling hours. Capitol Hill, Navy Yard, and Penn Quarter are popular. A gym is important for early-morning or late-night workouts. Pools are popular for weekend relaxing. Bike storage and doggie stations are popular, too. Huxley: We get a lot of turnover on the Hill because it’s a residential neighborhood with urban amenities, so it’s in demand for people who hate the idea of commuting and love city living and having a close-knit community.
In the high-end rental market, Matt mentioned an “amenities arms race.” Where do we go from here? Dewey: Apartment amenities used to just be a front desk, roof deck, and fitness center. Now every rental building is trying to distinguish itself. Pools are basically mandatory, expansive lounge rooms, golf simulators, workout classes, community events, free beer, pet amenities. All of these are commonplace now in rentals. Jackson: Developers need to look forward to the next trend and that could be more white-glove service. Andrew Dance: The townhouse market is only going to get more competitive. There’s going to be an inflection point. [At Related,] we’re delivering services to meet needs and we’re creating awareness, that “these are the needs you have.” People don’t even know these services can be delivered. People will look at flat living with heavily amenitized environments and services, and pay a premium for that… In general, the buildings that have the most energy about them—whether for rent or for sale—have retail. Mills: And I think you have to think about the glamour factor of that retail.
The Hepburn, with its rooftop shuffleboard court and unparalleled views.
Let’s talk more about the service component. Dewey: Services are often something that’s advertised but not delivered on. For example, the front desk is advertised as a concierge, but all they really do is accept packages. The next wave is going to be service-oriented—like a concierge that makes dinner reservations or walks your dog. [It] basically increases the convenience in your life. Jackson: Everyone likes to be pampered to a certain degree. It’s nice to know if you go away for a week your place and packages are taken care of. Should you have guests come in, that they are treated with white-glove service, too. It starts the minute a person opens the front door and should last the entire time on the property. Chris Schmidt: We will have a doorman building, which is rare in this city. We’ll put your packages into your apartment, we’ll put your dry cleaning into your closet, we’ll put your refrigerated items into your refrigerator. Dance: We’ll arrange for the movers, the cable, the electric. We’re trying to address every one of your needs in a thoughtful manner with a level of class and sophistication that makes you say, “Wow, this is what five-star service really feels like in a living environment!”