For every storefront closing downtown, four are opening
For all of the talk about retail leasing challenges nationally, Washington, DC retail storefront activity in 2019 is countering the trend
June 04, 2019
- For all of the talk about retail leasing challenges nationally, Washington, DC retail storefront activity in 2019 is countering the trend. Of retail storefront openings and closings that have been announced and tracked by JLL in Washington, DC as of mid-May 2019, openings have outpaced closings nearly 4:1. In comparison, closings outpaced openings in 2018 with 1.3 closings per every opening.
- Not surprisingly, the industry driving net openings in the District is dining, which accounted for 71% of announced openings so far in 2019. Within the dining world, restaurateurs are narrowing their focus by cuisine or offering experiences such as games at barcades or views at rooftop locations. Also not surprisingly, restaurants and bars accounted for the highest percentage of closings at 80%. Nonetheless in 2019, for every dining storefront closing in the city, three are opening. The trend was similar in 2018 with restaurants accounting for 82% of openings and 76% of closings.
- From a location perspective, 2019’s retail leasing activity has followed eastward population movement: two-thirds of announced retail openings in 2019 have been located east of 16th Street. The highest density of openings have been concentrated in the Market District, which accounted for 10% of the city’s openings, in particular with the upcoming arrival of the new Union Market food hall, La Cosecha. Other eastern neighborhoods that have driven storefront net openings included Mount Vernon Triangle, Columbia Heights, Ballpark, and Shaw, with each micromarket accounting for 4-6% of net storefront openings.
- In contrast to eastern storefront growth, net storefront openings in traditional, western, slower population growth neighborhoods such as Georgetown and Dupont Circle have slowed. Retail openings in these two neighborhoods accounted for only 13% of all announced openings so far this year, and the largest turnover was in Dupont Circle where restaurants accounted for 7% of all openings and 16% of all closings.
- As the image above illustrates, leasing will continue to follow population growth eastward into the SE, SW and NE quadrants. In addition to Union Market, which will be a leader in net openings over the next few years, Ballpark openings will outpace closings at a rate of close to 5:1. Finally, expect East of the River, particularly at Congress Heights, to see some of the most dramatic uptick in new activity over the next 48 months.
Source: JLL Research