Washington DC January 2024 Key Take Aways
DC DOWNTOWN:
The focus for D.C is on attracting and retaining national and international businesses, encouraging HQs, regional offices, and EDU. Retention strategies include expanding companies by incorporating more divisions. International firms and EDU are expressing interest in coming to DC. Tax revenue, regulatory compliance, and transportation (DDoT) are important factors.
The Gallery Place Chinatown Task Force, featured in the newspaper, involves a proposed $500 million bill. The upcoming election(s) in Alexandria could impact plans for relocating the sports arena out of the city.
The Economic Partnership’s annual meeting is on March 15th. A keynote speaker is still needed.
DC HOUSING AND JOBS:
Overall employment in DC has returned to pre-pandemic levels. However, there have been notable shifts in employment to the South West in Fairfax, Loudon, and Prince William. In-person sectors like education, health, and leisure have declined in employment, while professional services have experienced growth. Since July 23, approximately 33-35% of workdays have been conducted from home, indicating this is a stable trend in remote work practices. D.C. GOV is officially returning to a four-day in-office workweek.
Wage increases potentially shifting jobs to the border is a noteworthy consideration.
Multifamily trends in the region show a lack of a strong pipeline for deals, but there is emerging activity south of Potomac towards Richmond. The supply-demand is notable and reminiscent of trends seen in the Sunbelt region. Challenges in investment observed north of DC in Maryland are attributed to bureaucratic slowdowns and limited growth potential. The operational and construction cost sweet spot is around 200 units.
SPECIALIZED TOPICS:
Title insurance has slowed down in the past year. Hammer prices on distressed properties under auction have nuanced tax implications for realized vs city valuations. Look out for an article on this from Charlotte Troup Leighton. As the market opens up and interest rates go down, there is optimism for Q2-Q4.
In the engineering space, the proposal volume is high. However, projects are not returning due to loans not being granted. A stagnant talent pipeline will need to be reestablished to meet the market when it opens again. A shortage of technicians on-site will slow project progress.
Costar has recently launched a seamless banking platform, allowing real-time risk assessment against loans. Currently, the platform is servicing 94% of banks and credit unions, with migration to the new platform set to be completed by 2025. New platform emphasizing a shift towards prioritizing business intelligence over processing. Plans include expansion into the residential market, and the recent acquisition of Smith Travel Research reflects an international focus.
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