2013 State of Downtown Report Shows Economy Buoyed by Mixed-Use

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Record hotel sales, the emerging growth of retail, record cultural and event attendance, numerous new destination restaurants and an overall increase in mixed-use development marks the 2013 State of Downtown Report released April 25 by the DowntownDC BID.

“The amount of redevelopment combined with retail openings is astounding,” said Frank Carchedi, CoStar Executive Vice President, who served as a panelist at the BID’s 2014 State of Downtown Forum at the Newseum (555 Pennsylvania Avenue NW) where the report was released and analyzed. “That is nothing short of amazing.”

(View the report online here at http://www.downtowndc.org/state)

Fellow panelists Pepco Region President Donna Cooper, Washington Post Columnist Mike DeBonis and 1776 Co-Founder Donna Harris agreed, stating that the report, regarded as the definitive analysis of Downtown’s economy, showed a wealth of positive news for Downtown in multiple sectors. 

“Downtown had a great year, a fabulous year,” DeBonis said, later adding that Downtown continues to act as “the economic engine that makes so much in the city possible.”

Downtown in the mid-1990s was a single-sector economy focused almost exclusively on the office industry. But today, DowntownDC has a wealth of new high-end retail at CityCenterDC to add to growing retail along F and G Streets, housing is growing, cultural and entertainment venues are booming, hotels are flourishing and strong transportation networks are supporting a thriving Downtown economy. All of these mixed-use investments are paying off for Downtown as it heads into the future. 

According to the 2013 State of Downtown Report, Downtown hotels experienced a record year in 2013 with regard to both operating performance and room revenues. Cultural and entertainment venues attracted a record 9.7 million visitors in 2013. Hines’ CityCenterDC set records for new residential units, apartment average rents and condominium average sale prices. Office buildings’ average sales prices also reached record levels despite an increase in office vacancy rates. Higher education, a design showroom and cultural uses were all added to the BID in 2013. 

The short-term outlook for Downtown shows several significant development projects already on tap for 2014 including the Trump International Hotel at the Old Post Office Pavilion, the Capitol Crossing project over I-395, and a 400,000 square foot (SF) office building at 600 Massachusetts Avenue NW.

When asked how the panel views DowntownDC five years into the future, Cooper pointed back to the State of Downtown Report. “This report gives us that window,” Cooper said. 

Concerns still exist for Downtown’s economy, including office market stagnancy, the retrenchment of the federal government, and office densification. Additionally, employment has not grown significantly.

But Friday’s panel, moderated by DowntownDC BID Executive Director Richard H. Bradley which followed a presentation and overview from BID Chairman Michael McCarthy, agreed that today’s investments in economic drivers outside of traditional commercial office markets is fueling a bright future for Downtown.

“It’s stunning what D.C. has accomplished,” Harris said. “No other city can say they are growing. We are poised for an incredible future.”