Multifamily supply surrounding Silver Line neighborhoods set to nearly double (again) by 2021
With the Silver Line’s second phase into Loudoun County opening in late 2020, multifamily development is set to continue to surge
July 17, 2019
- With the Silver Line’s second phase into Loudoun County opening in late 2020, multifamily development is set to continue to surge from Tysons to Ashburn, shaping evolving demographics along the region’s newest transit line. After doubling in size following the opening of the first phase, an additional 11,000+ multifamily units are expected to deliver along the Silver Line by the end of 2021, boosting supply within the neighborhoods along the Silver Line by 84% and comprising 31% of Northern Virginia’s overall multifamily pipeline. While Tysons will continue to have the greatest concentration of growth with 5,800 units are under construction or planned in the short-term, an additional 5,400 units are in the works from Herndon out to the Route 28 North market in Loudoun.
- Following the arrival of multifamily development, population surrounding the new phase of the Silver Line is expected to grow by 7%. Today, neighborhoods around the second phase of the Silver Line are comprised of a mix of young families with the average household size of 3.2 people and an average age of 34 years old. With an influx on multifamily units consisting largely of one to two bedroom units, these demographics are likely to shift with a decrease in household size and average age. Residents in the area largely work in government contracting and computer/IT fields and make in excess of $108,000 per year, which is expected to increase by 9% by 2024. Renters have already increased, from 48% of the population in 2010 to 55% in 2019 and renters are expected to remain over half of the population through the next five years. As of today, vehicles are the main way to get around town as residents have an average of two cars per household and residents have an average 26.2-minute commute to work. The commuting patterns should also change with the planned transportation and new developments to the area and decrease the number of cars per household.
- As multifamily supply delivers, expect a short-term rise in vacancy within these micro-markets. The additional Metro stations and new construction will drive pricing as rental rates across asset classes could see a dramatic boost. The introduction of Class A+ product around Metro will create a new ceiling for asking rental rates, estimated to be slightly over $3.00 p.s.f. in the second phase of the Silver Line by 2021. As new Class A+ product is introduced along the Silver Line, Class B and Class C properties in the surrounding area could also push their rents to new heights in response to continued demand within this market. Neighborhoods along the Silver Line comprised 5% of Northern Virginia’s multifamily supply in 2013 prior to Metro’s arrival, but today the corridor is driving close to a third of the development in the market as demographics and growth shifts within the region.
Source: JLL Research