Despite pandemic-related uncertainty, a surge of new retailers and restaurateurs are exploring options across Washington, DC, according to Dochter & Alexander Retail Advisors‘ fall 2021 retail market report.
Contrary to popular belief, vacancy rates in suburban DMV markets aren’t universally terrible. In fact, they vary widely, from a staggering high of 39.6% in Chevy Chase, Maryland, to a low of just 2.9% in Bethesda Row, Maryland, according to the report, with the district showing a lot of activity.
For the 16 main streets in the district’s submarket tracked in Dochter & Alexander’s Fall Market Report, the overall vacancy rate was 16.26%.
In DC, the report identified 186 recently signed leases where the new tenant is still preparing to open up shop. For example, She loves Me is on hold at NoMa and recently opened in Barrack’s Row. union kitchen is set to open at Capitol Riverfront and recently debuted at NoMa. united bank recently opened at Capitol Riverfront and in the CBD. To tend to recently opened new locations in Eastern Market, 14th Street and Capitol Riverfront.
“It’s been a wild ride” David Dochterdirector of Dochter & Alexander, says Commercial Observer. “It wasn’t as bad as some had predicted, and in some cases it was just as bad. If you had attractive Class A properties, there was demand and they were absorbed and in some cases, they were even competitive.”
While creative transaction structures remain, he noted, rents are returning to pre-pandemic levels, especially along desirable 14th Street and Georgetown retail corridors.
Restaurants account for half of all tenants seeking space among retail tenants actively seeking space in DC, Dochter said, while the number of grocery store tenants in the space has tripled compared to the pre-COVID-19 period.
For example, We Pizza is preparing a location in Georgetown and recently opened a location on 14th Street. And Amazon fees opened stores in Franconia, on14th Street and Chevy Chase, with more stores to come.
“Still largely working from home, DC’s highest-earning residents shop and dine in person, boosting retail performance in residential-intensive submarkets, particularly along the 14th Street and Columbia Heights”, Emilie Anderer, director of research and market strategy at Dochter & Alexander, told CO. “Capitol Riverfront and NoMa/Union Market are also bustling; the somewhat elevated vacancy rates in these submarkets do not reflect widespread store closings, but rather a flurry of newly delivered retail space that has yet to be leased.
The report also noted that new retail models and uses are emerging to take up space once occupied by traditional stores and restaurants, with medical tenants leading the way. A medical, GW Medical and All treatments are all currently looking for a new space in DC and are considering those options.
Keith Loria can be reached at Kloria@commecialobserver.com.
