commercial real estate

Morning Notes

By ARLnow.com

GMU Computing School Clears Hurdle — “George Mason University’s new School of Computing, the first of its kind in the commonwealth, has received the all-important thumbs up from Virginia education regulators… The computing school, as well as the new Institute for Digital Innovation, will eventually have a physical home in Arlington, in a 360,500-square-foot building on Mason’s Virginia Square campus.” [Washington Business Journal]

Marymount Women’s Golf in NCAA Tourney — “After winning the Centennial Conference and Atlantic East Conference championships earlier this season, the Marymount University women’s golf is officially headed to the NCAA Division III Championships after yesterday evening’s selection show. The championships are scheduled to take place May 11-14.” [Marymount University]

AIM Hosting ‘Couchella’ — “Arlington Independent Media (AIM) and WERA 96.7FM present Couchella, a two night, online concert on May 7th & 8th, from 8:00pm – 10:00pm, featuring a wide array of musical performances from the DC region and beyond. Hosted by DC’s own sideshow girl, Mab Just Mab, this two-night virtual concert will feature national acts along with some of the DMV’s most popular performers, playing from their living rooms and studios.” [Arlington Independent Media]

Ballston Company Supplying Green Power to Google — “Arlington, Virginia-based AES Corp. has signed an agreement to supply electricity to power Google’s data centers in Virginia with carbon-free energy. Financial terms of the 10-year supply contract weren’t disclosed, but AES said it will require about $600 million of investment and generate 1,200 jobs, both permanent and construction, in Virginia.” [WTOP]

Hotels Hurting in Arlington — “Hoteliers and moteliers in Arlington continue to be filling far fewer rooms than they were in the pre-pandemic period, and coupled with significant reductions in room rates, are receiving less than half the revenue per available room than they were a year before. Arlington’s hotel-occupancy rate of 31.6 percent for the first three months of the year was down from 52.3 percent for the January-February-March period of 2020.” [Sun Gazette]

Office Vacancy Rate Up This Year — “Countywide, the office-vacancy rate stood at 18.7 percent in the first quarter, according to data from CoStar as reported by Arlington Economic Development. That’s up from 16.6 percent a year before, but still down from a peak several years ago, when the countywide rate touched the 20-percent mark.” [Sun Gazette]

High Rise Plans Take Shape for Vacant Wendy’s Lot in Courthouse

By Jo DeVoe
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The old Wendy’s lot in Courthouse, demolished in 2016 for an office building that never came, could be the site of a new development.

For almost five years, the triangle lot at the corner of Wilson Blvd and N. Courthouse Road has sat vacant. Construction crews working on 2000 Clarendon, a condo project across the street, have used it as a staging area for the last two years.

But now a project is taking shape. Last week, Greystar Real Estate Partners filed a site plan application with Arlington County proposing a high-rise apartment building with ground-floor retail at 2026 Wilson Blvd.

The proposed building, which is 16 stories tall and has 231 units, 74 residential parking spaces and some bicycle parking, is expected to achieve LEED Gold certification. The developer is also proposing a public plaza where Wilson and Clarendon Blvd meet.

“Recognizing the property’s location, topography and prominence in Courthouse, the applicant proposes … to redevelop the property with a high-rise residential building with ground-floor retail and iconic architectural features,” said Nan Walsh and Andrew Painter, attorneys for the land use law firm Walsh, Colucci, Lubeley & Walsh, in a letter to the county.

The filing comes four months after the company purchased the lot for $19 million from Carr Properties, according to real estate company Jones Lang LaSalle. Back in 2015, Carr was approved to move forward with plans for a 12-story office building.

Greystar made its intentions known in October 2020, when it filed conceptual plans for 2026 Wilson Blvd.

“The building, which will serve as an iconic architectural feature for the Courthouse neighborhood, will retain many of the same architectural design elements of the previously approved office building, including its glass curtain wall design,” the attorneys’ letter said.

The plaza would surround a possible retail entrance at the tip of the Wendy’s site, facing N. Courthouse Road. The Rosslyn to Courthouse Urban Design Study recommends an “activity-based, pedestrian-oriented urban plaza” at that same location.

According to the Walsh Colucci team, the proposed public pedestrian plaza will be approximately 3,279 square feet with movable tables and chairs and space for temporary vendors.

The urban design study also recommends buildings do not exceed 10 stories — unless they accommodate affordable housing or community benefits. This proposal clocks in at 16 stories and 166 feet tall.

Greystar “is open to the provision of on-site affordable housing to further justify the increase in height,” Walsh and Painter said.

The applications offered no further specifics but Greystar’s legal representation said the company “will work with staff throughout the site plan process to develop an affordable housing plan.”

Greystar proposes, generally, to maintain the existing street, sidewalk and bicycle configuration that the County Board approved with Carr Properties’ office building.

There will be no retail parking as a part of the project but Greystar’s development across the street will provide “ample retail parking to support both projects,” the attorney said, referring to the Landmark Block development, which the County Board approved last month.

Images via Arlington County. Hat tip to @CarFreeHQ2.

Some Call for Lower Real Estate Tax Rate Amid Sunnier Revenue Projections

By Jo DeVoe
Arlington County government headquarters (staff photo by Jay Westcott)

Arlington County’s projected revenue appears sunnier than when County Manager Mark Schwartz first presented his proposed budget for the 2022 fiscal year in February. 

The county can attribute this warmer outlook to two sources: the nearly $2 trillion American Rescue Plan and strong business license tax receipts, Budget Director Richard Stephenson said during a public hearing on the tax rate last Thursday. While he did not specify the revenue from the business taxes, Stephenson said President Joe Biden’s relief bill will apportion $46 million to the county.  

Combined, the influx of cash could mean funding will be restored to libraries, community centers, Arlington Independent Media and the Virginia Cooperative Extension, for example.

Schwartz’s proposed budget delays the re-opening of Cherrydale and Glencarlyn libraries and reduces support for AIM and VCE. Between 2019-20 and the proposed budget, funding for AIM had dropped by 22%, while the proposed reductions to VCE would require the organization to find new funding sources or reduce its programs. Members of the public spoke in favor of restoring funding to these programs last Tuesday.

Still, Arlington County will be leaning on real estate taxes for the lion’s share, 59%, of its revenue. Specifically, it will be relying on increasing residential real-estate taxes due to rising property values as commercial property assessments drop. 

“We’ve experienced some significant reductions to several of our tax revenues and non-tax fees,” Stephenson said. “We were fortunate this past January that real estate assessments came in slightly higher than we were originally projecting. While we experienced a decrease in commercial property assessments, new construction and residential properties increased.”

While property values are rising, Schwartz is proposing to keep the rate flat — at $1.013 per $100 of assessed value — for the upcoming fiscal year. That will mean an overall tax increase for most homeowners.

The County Board is slated to vote on this rate next Tuesday.  

Members cannot increase the rate but they could decrease it, which is something that a few Arlington residents told board members they would like to see.  

While Arlington has proposed holding its tax rate steady, nearby jurisdictions — including Fairfax County and Loudoun County — have proposed lowering or approved a lower real estate tax rate, said Audrey Clement, who is running as an independent for a seat on the County Board. 

“The impetus for tax reductions elsewhere is to provide relief to homeowners hit by rising assessments, even as the pandemic has put a lot of them out of work,” Clement told the board.

She said the county is using falling commercial real estate tax revenue to justify freezing rather than lowering the residential tax rate.

“The county will tell you it can’t afford to reduce the real estate tax rate because the pandemic has drained the commercial real estate tax revenue, but where were your real estate tax rates heading when the county was flush with revenue from corporate tenants?” she said. “They were going up.”

Meanwhile, two residents, William Barratt and Cindy Nelson, both asked the County Board to reduce real estate taxes.

Barratt said the Bluemont Civic Association, of which he is a part, passed a resolution encouraging the board to reduce the tax rate. The homeowner said he and his wife have seen a 15% increase in their taxes in recent years.

“I don’t think this is a wise idea for anyone: poor and rich,” Nelson said. “It’s just not right.”

The stormwater tax rate is set to increase, which Stephenson said will help generate $15.1 million earmarked for stormwater improvements.

Eventually, the county plans to eliminate the stormwater tax completely in favor of a fee based on how much impervious surface covers a given property, Schwartz previously said.

A higher cigarette tax rate is also being proposed that could generate $600,000. Like most of the county’s tax revenue, almost half of that will go toward Arlington Public Schools, Stephenson said.

Images (2-4) via Arlington County

Morning Notes

By ARLnow.com

Real Estate Expected to Get Pricier — “Home prices and, for the most part, sales, have continued to rise in the Northern Virginia market in the last year, even despite the pandemic, but the unanswered question is: what will happen in the future? A consensus forecast report from the Center for Regional Analysis and George Mason University and the Northern Virginia Association of Realtors aims to answer that question and, in short, the upward trends will continue.” [WTOP]

Clement Focuses on Taxes — “Frequent Arlington political contender Audrey Clement’s hat is in the ring for 2021, and she’s focusing, at least initially, on ever-spiraling higher tax burdens on county homeowners. ‘I’m running again because Arlington taxes are slated to go up again even as other Northern Virginia jurisdictions’ tax rates are going down,’ Clement said in an e-mail to supporters, formalizing her bid for Arlington County Board.” [Sun Gazette]

Candidate Misses Filing Deadline — Updated at 5:15 p.m. — Local House of Delegates candidate Matt Rogers, who was set to challenge fellow Democrat Del. Patrick Hope, reportedly failed to meet a filing deadline and may not be on the primary ballot as a result. [Blue Virginia]

Teens Encouraged to Join ‘Park Corps’ — “Work alongside Arlington’s natural resource professionals in forestry, wildlife management, education, habitat restoration and more. We’ll get real work done, all while having fun outside, building job skills and making connections with other like-minded students… Applications are due April 30. Applicants must be 16-18 years of age.” [Arlington County]

Credit Union Makes New Hires — “Arlington Community Federal Credit Union announced multiple new hires of key members of the leadership team. Each of these leaders will be responsible for significant priority strategies for the organization.” [ACFCU]

Foreclosed Rosslyn Office Building Sold — “An affiliate of The Meridian Group cast the winning bid of $58.3 million for a Rosslyn office building during Wednesday morning’s foreclosure auction just steps from the Arlington County courthouse… 1500 Wilson checks off many of the same boxes the development firm seeks with its value-add buys. There is about 121,250 square feet of vacant space in the building, and a repositioning to boost occupancy, aided by one of its real estate funds, could be in the cards.” [Washington Business Journal]

Morning Notes

By ARLnow.com

Man Arrested for Alleged Carjacking — “Upon exiting the store, the suspect approached the vehicle associated with the female witness and attempted to hand the male occupant a drink. When the male declined, the suspect allegedly punched him on the side of the head and proceeded to open the vehicle’s door, pull him out and began assaulting him. The occupants from the suspect’s vehicle attempted to intervene and when the suspect refused to comply, they left the scene. Upon seeing that the suspect vehicle had left the parking lot, the suspect entered the victim’s vehicle and fled the scene.” [Arlington County]

Amazon Workers to Volunteer at Vaccination Site — “The company sent out an opportunity for employees to volunteer at the clinic on one of its listservs, and pulled in workers from all around the region, including those at Amazon Web Services, which has a hefty Herndon presence. Roughly 50 Amazon employees will help run the clinic each day… While Arlington health workers will deliver the vaccines themselves, Amazon volunteers will perform other important tasks, like monitoring people for symptoms after they’ve received a shot.” [Washington Business Journal]

Capitol Rioter Photographed in Arlington — “[Michigan] resident Anthony Williams used Facebook to show off photos and videos of himself inside the U.S. Capitol, which gave law enforcement officials enough evidence to arrest him last week… Williams posted updates to Facebook as he traveled to Washington, D.C. He posted his location in Bedford County, Pennsylvania with the caption “Operation Storm the Swamp” and posed for a photo with five other men at a sports pub in Arlington, Virginia.” [MLive]

Rosslyn Building Set for Foreclosure Sale — “A Rosslyn office building that hosts one of President Joe Biden’s favorite sandwich shops is slated to be sold at a foreclosure auction, the latest sign of distress in Greater Washington’s commercial real estate industry… a public auction is scheduled to be held 11 a.m. Wednesday outside the Arlington County courthouse for 1500 Wilson Blvd., a 17-story, 261,360-square-foot office building that stands at the intersection of North Oak Street and Clarendon and Wilson boulevards in Arlington County.” [Washington Business Journal]

Lopez’s Challenger Picks Up Endorsement — “The activist group Our Revolution Arlington has endorsed Karishma Mehta’s bid to unseat Del. Alfonso Lopez (D-Arlington-Fairfax) in the June 8 Democratic primary… The organization pointed to the challenger’s support for the Green New Deal for Virginia, single-payer healthcare, ‘slashing police budgets and re-investing those resources into securing people’s basic needs,’ repealing right-to-work laws and other ‘transformative policy proposals.'” [Sun Gazette]

Kiwanis Help Kids During the Pandemic — “Arlington’s pandemic-stressed safety net organizations received an infusion of funds from the Kiwanis Foundation of Arlington this month. The Foundation, the charitable arm of the Kiwanis Club of Arlington, distributed more than $50,000 to the Arlington Food Assistance Center, Arlington THRIVE, The Salvation Army, ASPIRE, Bridges to Independence, PRS Crisis Link, Doorways, Capital Caring, YMCA, Arlington 4-H, National Capital Treatment & Recovery, VHC Pediatrics and other non-profits serving children in the community.” [Press Release]

JUST IN: Whitlow’s Says It Will Close in June, But May Reopen Elsewhere

By ARLnow.com

Long-time local watering hole Whitlow’s says it’s closing after efforts to renew its lease were unsuccessful.

“We have been unable to successfully negotiate an extension for our lease which expires at the end of June 2021,” the restaurant said today in a social media post. “We will continue to operate as we have been; however, we are due to close on Saturday, June 26.”

Located at 2854 Wilson Blvd, the bar first opened in Clarendon in 1995, after first opening as a greasy-spoon eatery in D.C. in 1946. It added a rooftop deck in 2010.

ARLnow first reported two years ago that it was listed on a commercial real estate website for a lease start date of July 1, 2021. As of this week, the property is now listed for sale at an undisclosed price.

In its social media post, Whitlow’s said it is “actively looking for a future home.”

“We don’t necessarily see this as a goodbye, but more of a see you later,” the post says. “In the meantime, there are three months left and we are going to make the best of it!”

The full statement is below.

Whitlow’s on Wilson has been family owned and operated since 1995. While it has been an exceedingly difficult year due to Covid-19, thankfully Whitlow’s maintained operations and support for our staff as much as possible. Unfortunately, we have been unable to successfully negotiate an extension for our lease which expires at the end of June 2021. We will continue to operate as we have been; however, we are due to close on Saturday June 26th 2021. We invite everyone to drop by and celebrate all the good times that have been had over the course of our 26 years here in Clarendon.

We want to take this opportunity to thank our past and present staff for making Whitlow’s the neighborhood gathering spot that it is. A special shout out to the incredible team that has fought so hard to keep Whitlow’s going during the pandemic, we are beyond grateful. Thank you to the musicians that have played on our stage. To our loyal regulars and guests, we cannot say thank you enough, we could not have done it without you.

While, the doors at 2854 Wilson may be closing in June, we are actively looking for a future home. We don’t necessarily see this as a goodbye, but more of a see you later… In the meantime, there are three months left and we are going to make the best of it! We have some good things planned and hope to see all of you soon.

The Cahill/ Williams Family

Morning Notes

By ARLnow.com

Changes for Patent Offices in Shirlington? — “The Alexandria-based gatekeeper for U.S. patents and trademarks is working with the General Services Administration on a plan to shed excess space in Northern Virginia previously occupied by employees now working from home under ‘maximum telework’ imposed by the federal government to slow the spread of Covid-19, according to sources familiar with the situation. That could include relinquishing as much as a combined 1 million square feet in Arlington’s Shirlington area as well as its main headquarters in Alexandria’s Carlyle neighborhood.” [Washington Business Journal]

Sun Gazette Revamps Website — “The Sun Gazette over the past decade or so has not had its own full-service Website. But if you’re reading this, you can see that has changed, as we threw the switch over the weekend on a site that, hopefully, will become the one-stop shop for the communities we serve.” [Sun Gazette]

Police Looking for Missing Teen — From Arlington County Police Department, as of Monday evening: “ACPD is seeking the public’s assistance locating 16-year-old Michael… Last seen ~3PM in the 2600 block of S. Kent Street. Described as a W/M, 5’8″ tall, 138 lbs, with blonde hair and green eyes. He was wearing a blue jacket, jeans and an orange backpack. Anyone with information on the whereabouts of Michael is asked to contact the Emergency Communications Center at 703-558-2222.” [Twitter]

More Students Heading Back to School — Updated at 8:45 a.m. — Additional @APSVirginia students will be commuting to the classroom as part of a phased return to hybrid, in-person learning. Our students depend on all of us to keep them safe. Slow down, remain alert & watch for students walking and biking.” [Twitter]

Morning Notes

By ARLnow.com

County Offering New Walk-Up COVID Testing — “Arlington County is launching a mobile, no-cost to patients, walk-up testing service in partnership with Quest Diagnostics. The mobile testing command center will open Tuesday, March 9, at 1429 N. Quincy Street, replacing the current drive-through testing site at that location. It will operate at that location for two weeks, Monday-Friday from 9 A.M – 4 P.M. Then it will move to new locations on a two to three-week rotational basis to offer walk-up COVID-19 testing throughout the County.” [Arlington County]

BID: National Landing is ‘Over-Parked’ — “Right now, we’re over-parked. We [were] originally built during a period that prized the automobile, but we were also fortunate enough to grow into a Metro system, and a number of other modes opened up possibilities for growth and development that are truly sustainable. What we’re seeing with new development is a ticking down of parking requirements. So we are focused on being a transit-oriented community, a multimodal community. The future is not cars.” [Smart Cities Dive]

County to Extend Ground Lease on Its HQ — “Arlington County and JBG Smith (JBGS) have entered into a letter of intent to restructure the ground leases of 2100/2200 and 2300 Clarendon Boulevard and the theater parcel in the Courthouse Plaza complex. The County owns the land under these three properties while JBGS owns the buildings. The LOI agreement states the County will provide JBGS the option to extend the leases from the current expiration in 2062 to 2119. Under the current leases, annual rent paid by JBGS to the County has varied significantly, ranging from $100,000 to $3.9 million. The new agreement would modify the annual lease payments to fixed rates and will include a one-time lump sum of $18 million paid by JBG Smith upon execution of the leases.” [Arlington County]

New Tenants Coming to Former TitleMax Building

By ARLnow.com

1/2

A small commercial building at the corner of Lee Highway and N. George Mason Drive has a pair of new tenants.

The building was briefly vacant, its future in question, after previous tenants TitleMax and Sam Torrey Shoe Service moved out last year. But the property owner, Virginia Hospital Center, has filled both spaces.

The old TitleMax space is being taken by Page Global Cyber Solutions, which bills itself as “an award winning industry provider of office solutions, strategic communications and information technology.” A sign on the building says the space will be a “neighborhood business center,” offering everything from private offices to nap rooms to drone video services.

The business center will also offer private mailboxes, office supplies and secure video conferencing rooms, according to the sign.

The former shoe shop, meanwhile, is being occupied by a roofing company called Augustine Roofing, according to VHC spokeswoman Maryanne Boster.

JUST IN: WeWork in Crystal City to Close

By ARLnow.com

1/4

(Updated at 3:30 p.m.) Coworking giant WeWork is planning to shut down its Crystal City location next month, according to an email sent to members this morning.

“I am reaching out to regretfully inform you that the WeWork Crystal City location will be closing,” said the email, which was shared with ARLnow by a member. “This location has stood strong for 5 years, and leaves a historic mark on the legacy of WeWork.”

“We know the last year has been full of surprises and challenges for every person all over the world,” the email continues. “In order to address some of these challenges, it was imperative that we carefully evaluate and right-size our portfolio.”

Amid the pandemic, WeWork has been preparing to take “drastic action” as it pursues the goal of profitability at the end of this year. The company currently has 759 open and coming locations in 119 cities worldwide, according to its website. That’s down from 828 locations at one point last year.

Fueled by massive private investment, WeWork grew at a torrid pace during the second half of the last decade, but as growth stalled its CEO and cofounder was ousted from the company and its planned IPO was scrapped.

The JBG Smith-owned building that houses WeWork in Crystal City — 2221 S. Clark Street — also contains one of the only two WeLive locations ever opened. An experiment in communal living, WeLive was reported to be on the chopping block last year.

It was not immediately clear whether WeWork plans to close the residential space along with the coworking space — the former occupies most floors of the aging office building, while WeWork is housed in the top two floors. JBG, meanwhile, has been on a redevelopment spree in Crystal City following the arrival of Amazon’s HQ2.

After the initial publication of this article, a WeWork spokeswoman confirmed to ARLnow that WeWork would be closing, but said nothing final has decided about the future of WeLive. WeWork locations in Rosslyn and Ballston are remaining open, she said.

“In streamlining our portfolio towards profitable growth, we have decided to move on from 2221 Clark St. in Arlington,” the spokeswoman said. “With several excellent locations in the immediate area, including 901 N. Glebe and 1201 Wilson, we look forward to providing our members with first-class, flexible space solutions.”

The move-out date for the Crystal City WeWork is Feb. 26, she added.

WeWork is also closing three locations in D.C., according to the Washington Business Journal.

BREAKING: Arlington Residential Property Values Soar

By ARLnow.com

The value of homes in Arlington County has soared during the pandemic.

Residential property values in Arlington are up 5.6%, while commercial property values slumped 1.4% from last year, according to newly-released stats. Arlington County is starting the process of mailing the new assessments out to homeowners and commercial property owners.

“Arlington’s overall property tax base grew modestly from last year due to continued residential growth despite a slowdown in some commercial sectors due to the impacts of the COVID-19 pandemic,” the county is saying in a letter to property owners. “Property values increased 2.2% overall in Calendar Year (CY) 2021 compared to 4.6% growth in CY 2020. New construction contributed to 1% of the 2.2 % overall property assessment growth.”

The sharp rise in residential property assessments shows “the continued attractiveness of our Arlington community, even as our businesses and residents face the burdens and challenges brought by the COVID-19 pandemic,” said County Manager Mark Schwartz. The average value of existing residential properties is now $724,400, up from $658,600 two years ago.

The average value of hotels, meanwhile, plummeted amid the pandemic, while apartment and office buildings increased in value — with the latter propped up by the arrival of Amazon.

“Overall commercial property assessments decreased by 1.4% over the previous year, mainly driven by a double-digit decrease in the hotel sector where operations have been significantly impacted by the COVID-19 pandemic,” the county said. “Apartment and general commercial (malls, retail stores, gas stations, commercial condos, etc.) property values saw small decreases offset by new construction. After strong growth in CY 2020, apartment property assessments increased by 0.8% overall in CY 2021. General commercial property assessments increased by 0.1% overall.”

“While many office property assessments decreased due to increases in vacancy rates and changing demand for office space, total office property values increased by 0.8% over last year,” the county added. “The overall office market tax base increased, in part, due to the increased presence of Amazon and the related development activity.”

Last year, assessments rose 4.6% on average — 4.9% for commercial properties and 4.3% for residential properties. The big rise in 2021 residential assessments will likely result in another effective tax hike for homeowners.

Last year, Arlington’s property tax rate — $1.026 per $100 in assessed value — was held steady despite the higher property values. This year, budget pressures brought on by the pandemic have prompted the county to warn of the likelihood of both budget cuts and tax rate hikes.

The height of Arlington’s budget season is set to kick off on Feb. 20, with the release of the County Manager’s proposed Fiscal Year 2022 budget. The final budget is expected to be adopted on April 17. The county’s new fiscal year begins July 1.

“The County continues to feel the economic impacts on local revenues, including the slowdown in sales, meals and hotel taxes, as well as cost increases and additional costs related to the pandemic,” the county said in a press release today. “The projected budget shortfall remains at more than $40 million, excluding the needs of the Arlington Public Schools (APS).”

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