Summer 2014 Retail Update

Economic Development

Background

After six weeks of walking the streets of DowntownDC with bottles of water and clipboards in tow, the DowntownDC BID Economic Development team has completed the summer 2014 annual BID retail survey.

Interns Steven Reilly and Ronella Williams, under the guidance of BID Economic Development staff, recorded cataloged every first floor, basement retailer and every available retail space within the 138-block Downtown BID area.

Findings

Survey results indicate that as of July 2014, there were approximately 3.7 million square feet (SF) of total potential retail space in the DowntownDC BID. Of that total potential retail space,  78 percent or 2.9 million SF was occupied or announced to be occupied by a retail tenant. An additional 13 percent (460,000 SF) of potential retail space was utilized in a non-retail capacity.

Retail vacancy in the BID was 8 percent (308,000 SF) and about 1 percent (31,000 SF) of new retail was currently under construction. Given DowntownDC’s reasonable retail vacancy rate, the new restaurant openings and retail openings announced by Hines at CityCenterDC and by Douglas Development adjacent to F Street, the state of DowntownDC retail is strong and its future is bright.

Food and beverage retailers constituted the highest percentage of retail SF in the BID with 49 percent or 1.38 million SF. Between 2012-2014, DowntownDC will add 141,000 additional square feet of high-end restaurant space (which includes both white table cloth restaurants and upscale casual restaurants). The increase in high-end restaurant space follows a long-term trend in the BID of growth in destination restaurants. For the period between 2012–2014, the BID will average twelve openings per year and six closings per year for a net opening of six restaurants per year. Since 2000, the BID has averaged 12 destination restaurant openings per year and seven destination restaurant closings a year for an average annual net increase of five destination restaurants.

The square footage of service retailers in DowntownDC has remained about the same since 2011, totaling approximately 450,000 SF of services for Downtown’s residents and employees. Service businesses in the BID survey included banks, fitness centers, hair and nail salons, doctors, printing and mail services, shoe repair establishments, dry cleaners, travel agencies, car rental agencies and more.

Shopper’s Goods retailers continued to increase in DowntownDC, totaling nearly 1 million SF in July 2014. In July 2014, DowntownDC had 980,000 SF of Shopper’s Goods retail, a 26 percent increase since July 2012. The increase is primarily due to new and announced destination clothing and retail stores along F Street and approximately 145,000 SF of new retail at CityCenterDC. (Douglas Development has led the retail charge on F Street and Hines is responsible for the new retailers coming to CityCenterDC.)

The largest closure in the Shoppers Goods category in 2014 was the 5,000 SF Guess clothing store. The largest (announced) openings are a 19,000 SFWalgreens pharmacy (which will take the place of the vacant Guess storefront as well as an additional 14,000 SF at 1155 F Street NW), a 14,400 SF Gap clothing store on 11th Street NW between F and G Streets, and a 7,000 SF American Eagle Outfitters clothing store at 1001 F Street NW.

The Department store sector grew between July 2012 and July 2014 due to the opening of two new department stores: T.J. Maxx (601 13th Street NW) opened in July 2012 and Marshall’s (529 14th Street NW) opened in October 2013, adding to this sector’s existing SF at Macy’s department store (1201 G Street NW).

Existing vacant ground floor space is scattered throughout Downtown and is not concentrated in any one sub-market.

The exclusive information obtained through the BID’s annual retail survey is utilized for the assessment of the state of Downtown retail and is presented in the BID’s annual State of Downtown report. The data, which has been collected by the BID since the early 2000s, is shared each year with local developers, local brokers and other interested parties.

Source: DowntownDC BID

DowntownDC Business Improvement District
1250 H Street, NW
Suite 1000
Washington, D.C. 20005
p. 202-638-3232
f. 202-661-7599
www.downtowndc.org

For more information on our research,  contact:
Alexandria Murnan
Economic Research Analyst
202-626-1131
alexandria@downtowndc.org

About the BID: The DowntownDC Business Improvement District is a private non-profit organization that provides capital improvements, resources and research to help diversify the economy and enhance the Downtown experience for all. This special district, where property owners have agreed to tax themselves to fund services, encompasses a 138-block area of approximately 520 properties from Massachusetts Avenue on the north to Constitution Avenue on the south, and from Louisiana Avenue on the east to 16th Street on the west. 

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Summer 2014 Retail Update

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