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Retail density is emerging beyond traditional epicenters

•While brick-and-mortar retail around the country continues to struggle, consumer retail spending in Metro DC remains high, with more than $69 billion in sales in 2017. And now, more than ever, convenience and geographic location are impacting consumer behavior. New retail hubs are emerging across the region and are no longer limited to the traditional epicenters like Georgetown, Tysons, and Chevy Chase. Retail is dispersing throughout the region, driven by urban migration to the eastern half of the city and suburban urbanization and densification. This has fueled organic growth from personal service-based retailers to service those new markets and existing retailers migrating to these new population hubs. 

•Washington DC ranks first among the major regional jurisdictions in retailer count per thousand people, with 7.57 retailers per 1,000 residents. While the CBD continues to have the largest concentration of retailers, the surge in residential and office development in emerging NE, SW and SE neighborhoods has delivered a fresh supply of retail with it. Among the most notable projects, the Wharf along the Southwest waterfront has and will deliver several hundred thousand s.f. of retail across the first and second phases of the project.

•In Northern Virginia, Alexandria comprises the highest count at 7.07 retailers per thousand residents, but a shift is underway. King Street, Alexandria’s retail hub with its high density of restaurants, bars, apparel and other stores, is facing increased competition from destination projects such as National Harbor in Maryland. As a result, since 2015, Alexandria’s retail vacancy has risen from 5% to 10%.

•Meanwhile, Ballston is emerging as an emerging mixed-use and thus retail hub, with 584,107 s.f. of retail space delivering between the remainder of 2018 and 2020. Among the projects, Forest City’s Ballston Quarter – the redeveloped Ballston Common Mall – will include an 18-restaurant food hall, a 25,000-s.f. Punch Bowl Social, a live-action entertainment venue, a culinary school, and an indoor play and learning space for young families. Across the street, Jamestown’s Ballston Exchange, the former U.S. National Science Foundation HQ, has already signed on several fast-casual options, including Shake Shack, We The Pizza, Philz Coffee, and CAVA. Meanwhile, one block away, Shooshan and Brandywine Realty Trust’s 4040 Wilson, which delivers in 2020, will include Arlington’s first VIDA Fitness.

•Across the river, Maryland is undergoing a similar shift. The traditional retail hubs of Bethesda and Silver Spring still comprise the highest density of retailers, but transit-oriented developments such as Pike & Rose are creating retailer concentrations farther north on the Red Line. The mixed-use project, which opened in 2014, has grown to more than 40 retail tenants, with 10 retailers opening in 2018 alone, largely consisting of restaurants, plus a spa.

•Retailers follow both demographics and supply and an increasing amount of mixed-use development in the pipeline will continue to push density to new corridors and thus both disperse and create new retail centers ahead.

•The Silver Line markets, JBG Smith elevating Crystal City retail to grade and Loudoun County will yield the greatest growth in Northern Virginia over the next five years.

•In DC, emerging NE, SW and SE quadrants will see retail storefront open rates double in the next
five years.

•The future Purple Line in Maryland will drive increased mixed-use development, with residential to start, driving retailers to explore and open throughout the eastern half of Montgomery County and into Prince George’s County. 

Source: JLL Research, NVTC

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