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JD's State of the Hood, January 2009

Previous Addresses: 2008 | 2007


Ladies and gentlemen, in January 2009, the State of Near Southeast is....
Not noticeably worse than much of the rest of the economy?
With the twin spectres of recession and the seizing up of lending by banks, real estate development across the city and the country became a radically different proposition in the second half of 2008. The cycle of the past few years--borrow some easy money, dig a hole in the ground, build a building, and watch the money start to pour in--is for now not how the biz is working anymore. While developers are still wanting to move forward on some projects, securing construction loans is now a considerably more delicate dance, and businesses and residents are more hesitant to sign leases or sales contracts.
All in all, it is not a recipe for much change on the horizon in 2009.
But considering the blistering pace of the reconstruction of Near Southeast in 2007 and 2008, perhaps it's not so bad for there to be a little time for folks (such as developers, city officials, and exhausted bloggers) to catch their breath, retrench, and let the neighborhood grow into what's already been delivered before adding a whole lot more.
Let's take a look at what's happened in the past 12 months, and then look ahead at the next 12, and beyond. (And, if you want something a little more official and detailed--but a lot less fun!--here's the Capitol Riverfront BID's 2008 Annual Report.) You can also check out my Development Since 1999, By the Numbers chart for square footage and unit totals, broken out by year.

2008: Projects Delivered | Projects Started | Blogging 2008
2009: Overview | Expected Deliveries | Getting Started | Other Possibilities

Summary | Development Since 1999, By the Numbers

Projects Delivered in 2008

It already seems so long ago that Near Southeast was rounding third toward the opening of Nationals Park, and the first three months of 2008 were an avalanche of "Will It Be Ready?" stories on the construction, the streetscape upgrades, the traffic and parking plans, Metro's readiness, and more. Disasters were predicted, catastrophes were envisioned--and never happened. On March 30, 41,000 fans descended on the neighborhood, Ryan Zimmerman hit a walk-off homer to win the game, and everything seemed to work relatively well. (Except for the massive lines at the Ben's Chili Bowl windows.) Within weeks, it was like the ballpark had been there all along, and gamedays passed mostly without incident, though the average crowd of about 30,000 per game--well under the sold-out capacity--might have been part of the reason that traffic, parking, and Metro worst-case scenarios failed to materialize.

70 and 100 I Street
These siblings known officially as the Axiom and the Jefferson brought nearly 700 new rental units to Near Southeast when they began move-ins in late summer 2008. But residents weren't quite flocking in--by December, both buildings were each under 20 percent leased.

Onyx on First
Faison and Canyon-Johnson opened this 260-unit building in Fall 2008, after having switched it from condos to apartments earlier in the year. By December, eight percent of the units were leased.


100 M Street
Hard to believe this was the only office building to be completed in 2008, but Opus East leased 30 percent of its 240,000 square feet early on, with more tenants rumored to be signed. A SunTrust Bank was signed for one of the retail spaces, but we shall see if that comes to pass.


Projects Started in 2008

Capitol Quarter -- Buildings that bear a striking resemblance to townhouses have at last begun to sprout on the site of the old Capper/Carrollsburg public housing complex, with many of the first-phase units scheduled to be delivered in 2009. But this long-awaited mixed-income development took a bit of a hit when foundation problems forced the demolition of the initial construction in fall 2008 and a restart at the end of the year. The DC Housing Authority will also be working in 2009 to fund the second phase of the townhouse project, along with the planned mixed-income apartment buildings along Canal Park.

Foundry Lofts
The distinctive brown-and-white exterior of Building 160 at Third and Tingey will be kept as the building is renovated into a 170-unit apartment building with ground-floor retail space and two new floors added on top. It's expected to be ready in 2010.


1015 Half Street
Opus East began construction on this 440,000-sq-ft office building in spring, for an expected late 2009 or early 2010 delivery. (Though fans of the old Nation nightclub still wistfully remember what this spot used to be.)

Blogging 2008

As for JDLand's output in 2008, the numbers pretty much tell the story of the year when split into two sets:

  • In the first six months of the year (during the run-up, opening, and immediate aftermath of the ballpark), I posted 377 blog entries--totaling about 87,000 words--and 2,400 before-and-after photos, plus an additional 700 images from various events or building interiors. The site grabbed 938,000 page views, mainly from baseball fans wanting to know every iota of news about the ballpark and its new home.

  • Output lessened considerably in the second half of the year, thanks not only to waning interest in ballpark news and the cliff-diving economy, but also as I attempted to reestablish a personal life outside of blogging for the first time in about two years (which included getting smacked with heavy doses of "real" work at my job, thanks to the never-ending election and change of administrations). I posted "only" 197 blog entries totalling about 43,000 words, along with about 1,400 photos of various types. This was all reflected in my collapsing traffic numbers of just under 300,000 page views. (Hello? Is this thing on? Hello? Hello?)
  • But all the heavy lifting in late 2007 and the early part of 2008 was enough to garner a fair amount of press for this little site, and in September won the Citizen Media Award as part of the Knight-Batten Awards for Innovations in Journalism.


    On the Horizon in 2009

    I've been joking for a few months now that 2009 will be the year I put up a Gone Fishin' sign at JDLand, telling everyone to come back in 2010 to see if anything's happened. It probably won't be that dire, and it's possible that the economy could pick up in the latter half of 2009 and some stalled projects could decide to get moving, but at this point it's looking like the next 12 months will be pretty quiet for big starts. In the meantime, residents and baseball fans will be watching closely for smaller hints of progress, like restaurants and additional retail other than banks.

    2010 is looking pretty good, with the opening of the first phases at The Yards and perhaps the start of Akridge's 700,000-sq-ft mixed use project on Half Street just north of the ballpark. And maybe the opening of Canal Park {chuckle}.

    But that's skipping ahead a bit. Let's look at this year.

    Planned Deliveries in 2009


    55 M Street -- Monument Realty's 275,000-sq-ft office building on top of the Navy Yard Metro station is getting its finishing touches now, and is expected to be open by spring. However, no tenants have been announced, and ballpark visitors exiting the subway may be less interested in the building above them than the large hole in the ground just to its south, where Monument Half Street's hotel and residential shows no sign of getting underway, leaving fans with potentially another season of no sit-down food offerings along the walk to the Center Field Gate.


    Diamond Teague Park
    The city has announced that the first phase of this 39,000-square-foot public plaza at the foot of First Street will be ready by spring, complete with new piers to allow the docking of water taxis bringing baseball fans.


    909 New Jersey Avenue
    JPI's third entry in its "Capitol Yards" offerings along I Street is a 238-unit rental building on the block formerly home to the Nexus Gold Club and about a half-mile from the US Capitol. First units are expected to open in spring; no announcements have been made so far about any tenants in the ground-floor retail space.


    Velocity Condos
    The Cohen Companies and ADC Builders expect to deliver this 200-unit condo building that also includes 4,000-sq-ft of retail space in late 2009. But plans to start a twin just to the north are rumored to be on hold, and as of December, only 25 percent of the units in this first building had been sold.

    Getting Started in 2009


    {Crickets Chirping}

    Okay, it's not really that bad. But, as of this writing in January, the projects with announced 2009 start dates are pretty small in number, and are mostly at The Yards:

    Boilermaker's Shop
    This 1919 industrial building at the corner of Third and Tingey will receive a loft-like second floor as part of its renovation into a 47,000-sq-ft retail space. It's expected to open in 2010.


    The Park at The Yards
    A $42 million public-private partnership was struck late in 2008 to finance the construction of this 5.5-acre waterfront space that is at the forefront of plans to transform the banks of the Anacostia River. The first phase is expected to open in 2010.

    11th Street Bridges Reconstruction -- The city appears poised to begin late in 2009 a five-year project to reconstruct and reconfigure the Anacostia River crossing at 11th Street, with eight lanes of freeway traffic and four "local" lanes connecting old town Anacostia to Near Southeast (with designs engineered to allow for light rail, when the time comes). Flyovers to and from RFK should be demolished early in the year.

    Any Other Possibilities?

    First, there's the perennial:

    Canal Park -- One of the oldest "new" projects in Near Southeast continues to be stalled, frustrating residents who still see school buses where they had long since hoped to see green space. With the city having handed off control of the project to the Canal Park Development Association, and with rumors of a redesign, it's possible that the park will see some movement in 2009, but is currently not projected to be completed until late 2010.

    Elsewhere, there's plenty of projects still on the boards in Near Southeast, and it's not completely out of the realm that some of them could get underway in 2009--but as of this writing in January, no announcements have been made.
    Office projects such as Donohoe's 1111 New Jersey and William C. Smith's 250 M Street were close to getting started before the credit crunch hit, and in January DRI/Transwestern's Plaza on K began marketing 300,000 to 450,000 square feet of office and retail space along First Street between I and K. Darkhorses such as Ruben's SC1100, Cohen's First and M/Square 701, and Lerner's 1000 South Capitol could suddenly see movement if a big tenant comes knocking. The much smaller project at 801 Virginia (converted from residential to office late in 2008) could also see shovels in the ground in 2009.
    On the residential side, the highest-profile residential project waiting to get underway is just north of the ballpark on Half Street, where Monument Realty dug the hole for its planned 200-room hotel and 340-unit residential building back in 2007 but saw its financial backing collapse with Lehman Brothers, and by late 2008 was trucking some dirt back into the hole to shore up the excavated walls. Elsewhere, JPI had seemed close to starting work on its fourth "Capitol Yards" apartment building, at 23 I Street, as did Camden Development with its 1345 South Capitol project, which could put both of these buildings at the forefront of moving forward if the economy perks up.
    The redevelopment at Capper/Carrollsburg will be focused mainly on the continuing construction of the first phase of Capitol Quarter townhouses, but the DC Housing Authority will also be spending much of 2009 working to lock down funding for not only CQ's second phase but also the four apartment buildings planned for the blocks alongside Canal Park. No shovels in the ground in any of those spots before 2010, though.
    Retail projects along M Street--the old Carn Barn ("the Blue Castle") at 770 M Street and the rehab of a historic building at 900 M--could bring some vitality to the less-than-overwhelming retail offerings of lower 8th Street and all of Near Southeast, but no announcements have been made.
    Other larger developments may see zoning and permitting moves through 2009, but would seem unlikely to put shovels in the ground before 2010, such as the 1.1-million-square-foot Florida Rock/RiverFront mixed-use project on the banks of the Anacostia and William C. Smith's similar-sized project at 800 New Jersey (which needs the old trash transfer station to its south demolished so that the street grid can be redrawn). And further projects at the Yards such as the rehab of the Gun Assembly Building into the Factory 202 condo building and the construction of new office and residential buildings along Fourth Street are also in the not-before-2010 column.
    And then there's developments completely up in the air, such as the old Star/Post plant at 225 Virginia, which the city is trying mightily to unload as it continues to pay $500,000 a month in rent to sublet the empty building.
    Akridge's 700,000-square-foot Half Street project appears to be on the boards for 2010, which makes it possible 2009 will see the demolition of the old WMATA Southeastern Bus Garage currently on the site. And the company also seems to be getting close to acquiring all of Square 740 (bounded by New Jersey, K, L, and First), the last block completely unspoken for in the western portion of the neighborhood.
    There could also be a shuffling of the decks, with the odds favoring the possibility of property sales as developers look to cut losses and/or pick up new potential locations at fire-sale prices, if anyone can get the banks to loan them any money. In other words, all forecasts and expectations seen here are subject to rampant revision as the year goes on.

    In Summary

    If longtime commercial real estate professionals are having a hard time forecasting the state of their business as 2009 progresses, then neighborhood bloggers with no experience at all shouldn't be looked to for wisdom or take-it-to-the-bank predictions. But while Near Southeast has so far escaped the worst outcomes already apparent in the current economy (such as unfinished buildings left to languish or developers shutting down condo developments and hanging on to purchasers' deposits), the expectations of the neighborhood being built-out to resemble a mid-sized American city's downtown will be shifted a few years down the road, on a timeline closer to what was originally expected for this 100-block area before a certain baseball stadium rewrote the script and started a gold rush.

    To see the latest on these projects and others in the months and years to come,
    visit my Project Directory for quick info on what's coming and what's here.
    Also, for figures on what's been built and started in Near Southeast since 1999,
    see Development Since 1999, By the Numbers.

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