2019 Year-End Reflection from the Brokers
At the beginning of 2019, we asked some of our brokers what they believed 2019 has in store for them. Now, we’re looking back and seeing how this past year has turned out. Did 2019 meet our expectations? Did it throw us any curveballs? What have we learned?
Michael Kang: “More opportunities for international grocers to enter the D.C. market.”
“The international markets are struggling since there are too many players out there. The main customer demographic is not increasing rapidly enough, so we have not seen many new stores from international grocers.”
Alex Shiel: “I think the key word of 2019 is going to be, “partnerships.” Landlords and restauranteurs entering in deals that truly are a partnership, where the landlords investment is greater than or equal to the restauranteurs.”
“This was absolutely true. ABC Pony is a great example of a developer understanding that in order to lease the apartments above, they needed something enticing down below. It’s an uber competitive market to be building out first-generation restaurant spaces. It can take $1.5-2 million to build out something new and restauranteurs can’t take on that risk. Developers are investing in their deals, putting more money in than the restaurant, then using that deal to entice others to lease in the building. It works out for everyone in the end, whether you’re an office space or living spaces above, having a great restaurant below is always a plus. On the other hand, the number of second-generation restaurant spaces coming online in this city is making the developers lives even more difficult, so it’s about investing in their retail and leveraging those great deals to make other great deals.”
Thomas Bolen III: “A focus on metro-oriented retail. How successful is it going to be is questionable, but I think there will be a push.”
“Without a doubt, this is happening and will continue to happen in the upcoming years. There is still a focus on transient-oriented mix-use developments. This is apparent in areas such as New Carrollton, Largo Town Center, and even the upcoming Silver Line stop at Reston Town Center. Another great example is Wegmans coming to Alexandria, VA . Historically, this brand was built around the suburbs and was not focused on metro accessible, high density destinations. The upcoming Alexandria and even Northwest, DC Wegmans proves that this trend will continue.”
While two out of three of these predictions were accurate, we have learned a lot from the past year. International markets are not expanding as quickly as we anticipated, developers and restauranteurs are making deals to benefit each other, and transit-oriented mix-use developments are on the rise. Overall, it’s been an incredible year with plenty of amazing deals and developments. We can’t wait to see what 2020 has in store for the commercial real estate world!