The Rise of Capitol Riverfront
The D.C. neighborhood has seen businesses flock to the area thanks to a live-work-play experience
Over the past decade, Capitol Riverfront has become one of Washington D.C.’s most active development hubs, and has experienced the largest boom in commercial real estate in its history.
“We often use the term ‘dynamic’ because of how quickly the neighborhood changed with all the new development,” said Mark Carroll, executive vice president of Skanska USA Commercial Development in Washington, D.C. “This market has gone through a cycle of ramping up, pausing and then ramping up again.”
Many believe the opening of Nationals Park in 2008 was the catalyst of the transformation, but in actuality, the groundwork for change began well before that.
“As far back as 2001, when the federal government announced that the DoT was moving its headquarters to the area, things were starting to change,” said Holli Beckman, vice president of marketing and leasing operations for WC Smith. “We began building the Federal Gateway at 1100 New Jersey Avenue SE, our present headquarters, in 2002. The Anacostia River front was chosen as the site of the stadium in 2004, and that certainly spurred other development and interest in the area, but the underlying activity that led to Capitol Riverfront as we know it today has been brewing for almost 20 years.”
Once moving to the area, WC Smith identified other opportunities to establish more roots in the community, including development of The Collective, with its residential and retail offerings like Whole Foods, and the creation of recreational, open-space facilities — Canal Park and the dog park that’s located at the northern end of the neighborhood.
According to Carroll, about three to five years ago, there was an inflow of residential products that brought in more retail which, in turn, created more of a sense of place.
“Before the Capitol Riverfront was an emerging market, now it is undoubtedly a developed and thriving market,” he said. “From an office perspective, the Capitol Riverfront used to support the Navy Yard and U.S. DoT, and it was driven by government contractors who needed to be near the Navy Yard for work. We’re now attracting a different kind of user that is more diverse. We are seeing people come in from the CBD and the East End. It’s now less of a contractor service market and more of an office and neighborhood environment.”
That can be attributed to the live-work-play feel thanks to all the parks, access to the water, retail and the ballpark, all contributing to the Capitol Riverfront’s diverse ecosystem of office and residential.
Kevin L. Howard, executive vice president at CBRE, characterizes the Capitol Riverfront as an office and commercial hotbed for development, spurred by the commitment to build Nationals Stadium.
“Office leasing at that time was primarily driven by government contractors working with NavSea and the DoT,” he said. “Since then, we have seen a shift away from such NavSea/DoT focused government contracting and toward more association/professional services types of tenants.”
From that perspective, the commitment of the National Association of Broadcasters to relocate from the CBD to One M, Monument Reality’s new 10-story, 118,000-square-foot mixed-use building was a real-game changer. The organization committed to this new office development in 2015 and will be moving in later this year.
“The fact that such a large, well-known association planted a flag in the submarket, signaled to other tenants that this was an area to be taken seriously,” Howard said.
Earlier this year, Brookfield Properties announced that Chemonics signed a lease for 300,000 square feet and will serve as the anchor tenant for what will be a collection of up to five new office buildings in the second phase of The Yards development.
This phase is projected to boost the size of The Yards to 48 acres, including 1.8 million square feet of office space, 400,000 square feet of retail and dining and 3,400 residential units. The full project is expected to be completed by 2030, with Chemonics expected to move into a new 11-story Class A building at 1275 New Jersey Avenue SE in 2021.
Skanska was responsible for the reconstruction of the 11th Street Bridge and adjacent interchanges, infrastructure that helped spur new development such as 99M, a recently-constructed 220,000-square-foot LEED Platinum Class A office building in the Capitol Riverfront neighborhood, located right at the corner of 1st and M Streets between two metro stations.
“That didn’t happen by accident. It was part of a coordinated effort in which Skanska, Grosvenor and McCaffrey master-planned the whole block to create a sense of place in the neighborhood,” Carroll said. “As a result, 99M became the anchor for the neighborhood.”
Not many commercial areas offer the mix of residential and office that provides the neighborly feel of Capitol Riverfront.
“Capitol Riverfront combines the best of both commercial and residential worlds,” Beckman said. “The high level of building activity here can sometimes hide the fact that Capitol Riverfront is a neighborhood, or collection of communities.”
Convenience and flexibility, both in a workspace and its amenities, are the primary features modern tenants look for when selecting a building to move into and those are things attracting businesses to the area.
For example, 99M specifically offers tenants the chance to fully customize their workplace and includes a 4,750-square-foot rooftop terrace; a 4,300-square-foot fitness facility; and a secure bicycle storage room complete with a fix-it station.
“From a neighborhood standpoint, Capitol Riverfront’s high commutability, coupled with the dynamic live-work-play environment, provides employers and their employees with everything they could possibly need in one place, both inside and outside their building,” Carroll said. “Businesses have the advantage of being surrounded by popular restaurants, retail and multiple public green spaces, including The Yards Park and Canal Park.”
Capitol Riverfront also offer tremendous access to Capitol Hill and Ronald Reagan Washington National Airport.
“An additional factor that has contributed to the area’s growth is the metro’s Green Line,” Howard said. “The majority of the millennial population in D.C. now prefers to live in neighborhoods located along the Green Line (Shaw, U Street, Mount Vernon Square), benefitting retailers and businesses located along this transit route.”
Howard recalls what a huge deal it was when Gordon Biersch opened back in 2010, bringing sit-down restaurant to service the office population and those who wanted to grab a beer on a game night.
“In the ensuing nine years, the retail and amenity landscape has changed at light speed,” he said. “Now we have several of the Washingtonian Top 100 restaurants in the neighborhood, a bountiful selection of fantastic fast-casual options, and lifestyle offerings like sailing classes on the Anacostia River, outdoor films and farmers markets.”
On top of that, the Capitol Riverfront is equally known for great experience-driven venues like Nationals Park, Audi Field, beer gardens and the District’s first winery. All of this adds up to a great culture that companies can provide to their employees.
“Businesses want to be where other creative, inspiring companies are,” Carroll said. “As the Capitol Riverfront continues to attract new and different companies to the area, that innovative environment will only build and further perpetuate the cycle that is attracting new people and companies to the area.”
The Capitol Riverfront provides easy commuting access, great office product and a lifestyle environment businesses believe will improve both workplace productivity and the quality of life for their employees.