In the past two years, the retail industry has seen great ups and downs, and we are glad to finally see that the Washington D.C. downtown area is starting to make a comeback now that the workers are starting to return to their offices. Vacancy rates dropped to all-time lows due to the COVID-19 pandemic, but this is changing thanks to work-from-home policy changes and initiatives by the District to tempt people back.
Federal workers return
Calls to bring federal office workers back on a full-time basis are expected to help spur the return to downtown and all the benefits that will bring.
The return of federal workers on a part-time basis motivated private sector companies to start bringing their teams back to the office too, which is expected to have an ongoing beneficial impact.
Increasing foot traffic
The return of workers to the downtown area is good news for retailers and restaurants who are seeing increased business from foot traffic. Many of these businesses rely on office workers for their income and will be welcoming them back with much relief.
Another good sign is famed chef Peter Chang opening his first restaurant – Chang Chang, in the D.C area. The 200-seater restaurant is expected to attract a variety of visitors – locals and tourists and will have a positive spillover effect on other businesses in the vicinity when it opens in the fall.
Grant programs and tax abatement tools
Moves to bring more people back to the city center and increase occupancy rates have also been helped by several incentives.
In early May, District officials announced a $5.4m grant program to encourage small to midsize businesses to move to the city or expand their presence there. Grant funding of $50,000 has been made available for capital improvements, equipment, or expansion for retailers, $100,000 for similar expenses for manufacturers, $600,000 for projects that improve distressed or emerging neighborhoods, and $200,000 for technology advances for businesses in the District. The application deadline was May 27th, which means the funding, and consequent expansion and improvements should happen soon.
A tax abatement tool targeted at the Central Business District was announced at the same time by Deputy Mayor for Planning and Economic Development John Falcicchio. The ‘Housing in Downtown Act’ aims to offer abatements of some $2.5 million per year (at 3% annual increases) to build more housing. The District hopes to create 800 new units by converting office space into residential buildings.
Remember what you love about D.C.?
Reminding us all of what we love most about D.C. – an online initiative called Return to DC was launched by 11 Business Improvement Districts in mid-May.
Return to D.C. is reminding people what they loved about working in D.C. and has toolkits for returning workers and employers as well as social content created by locals and up to date information on events, specials, and other interesting things going on downtown. Events and conferences are happening more frequently thanks to the return of office workers, and local businesses are reaping the benefit.
Rappaport has retail spaces available should you wish to join the return to downtown – explore there here – available spaces in Washington D.C. We are also going to be hosting events for brokers interested in this area – contact us if you’d like to be considered.