Valley Park Commons' tenant roster gained a Black Steer restaurant and Axiom Staffing in Hagerstown, Maryland.

Washington D.C. Retail Remains White Hot

ROCKVILLE, MARYLAND -- Washington, D.C. doesn’t know the meaning of a  cool market.

            “Primarily, it is one of the strongest markets in the entire nation for real estate --period,” said Alan Luger, principal of Divaris Real Estate, Inc.’s Rockville, Md. office.  “That’s in part because of the government and the consultants who deal with the government.  This fact alone has made it a very, very strong housing market, a great office market and one of the strongest retail markets in the country.”

            In Washington, D.C., just as in many other markets across the U.S., housing development drives retail growth, and as the metro D.C. area continues to radiate outward, so go the retailers.  Fitness First Health Clubs, for example—a Maryland-based health club chain serving approximately 30,000 members—will soon open its 16th metro D.C. location.  The 14,400-square-foot space is located in the Sully Place Shopping Center in Chantilly, Va.  The site is a perfect fit for founder Peter Harvey’s overall expansion plan.  Luger states that the space needed to have good access to people, and the Lowe’s-anchored center was a perfect match with its high traffic patterns and access to the major thoroughfares of Route 28 and Highway 50.

            Just across the state-line, in Maryland, one of the most established supplemental education services, Huntington Learning Center, has secured a lease through DRE for a 3,200-square-foot space in San Souci Plaza —located at the intersection of Route 235 and MacArthur Boulevard in California, Md.  In the more than two years since DRE began leasing and managing San Souci, 27,000 square feet of the 246,788-square-foot center have been leased to tenants such as Maximum Health and Fitness, The Coffee Quarter and Hot Noodle.  DRE also facilitated expansions for S.M. City Motorsports and Rick’s Jewelers.  In fact, Susan McGee, vice president of shopping center leasing for DRE’s Rockville office, states that about one-third of all the properties she leases, including this one, are 100 percent leased.

            In both Maryland and Virginia, Earl Goodman, principal of DRE’s Rockville office, is working with O.T.O. Hotels to secure two to four-acre sites for such hotel brands as Marriott, Hilton, Starwood and Hyatt within the Washington, D.C.,
Annapolis and Baltimore, Maryland, and Northern Virginia markets.   Goodman states that O.T.O. is looking beyond the “traditional” hotel site for these expansions.  The company is considering mixed-use sites that also have residential components. 

            Also in the Baltimore market, the Johnny Rockets restaurant chain is looking to build six to eight 25,000-square-foot locations, either stand alone or within regional malls or lifestyle centers.

            In the D.C. metro area, DRE is working with Lowe’s to add as many as eight stores by fall of 2007.  For a new site, Lowe’s requires approximately 15 acres; however, the retailer is also considering existing centers as the availability of quality vacant land is now a scarce commodity.

            “This market is going to continue to expand,” said Luger.  “There is a minimal amount of quality retail space available anywhere in the metropolitan area.  National and international retailers are looking here for expansion.  There is no reduction in demand in sight, nor do I anticipate it.”