We found the end of the rainbow… the pot of gold was at The Wharf, Capitol Hill, and The Navy Yard…
Something is going on in Georgetown that doesn’t make any sense to the residents–Even with the strong demographic data and the strength of the “Georgetown” worldwide brand–retail businesses are pulling out and real estate prices appear to be stagnating… Why? Poor city leadership? Other areas (The Wharf, Capitol Hill, 14th Street, Navy Yard etc.) pulling all the investment away? Unreasonable landlords? Retail, in general, is hurting? The Business Improvement District (BID)? Other?
The “Georgetown” Brand
If you travel outside of the United States everyone knows about “Georgetown”–Maybe it’s the movies… the university.. or just the legacy of the area. Georgetown’s brand is almost as strong as that of “Washington DC”–and more stable from the looks of Google Trends.
If you review the stats Georgetown (20007) is one of the best demographics in the city. The area has a higher income than other more trendy zipcodes and pays more taxes per resident.
Here is how we compare to The Wharf (20024) and Capitol Hill (20002):
more from BID on demographics of the area.
So why is retail pulling out?
Commerical Real Estate Issues
If you read the Georgetown Business Improvement District’s (BID) market report and annual report things seem great but if you just walk up Wisconsin Ave you will see that it’s starting to look like a ghost town. Here are a few pictures from my jog one morning–you can see all the open properties here.
Here are also a few from M Street that just popped up
If you compare Georgetown to other “hot” parts of Washington DC such as The Wharf and or Capitol Hill in regards to Commercial Real Estate here is what you will see:
- 20007 has 111 commercial real estate spaces for lease, representing 299,768 sqft space. 12 buildings are available for sale. In the last 30 days, 20007 has had 15 new spaces come on market. https://www.officespace.com/zip/20007
- 20024 has 13 commercial real estate spaces for lease, representing 210,929 sqft space. 2 buildings are available for sale. In the last 30 days, 20024 has had 3 new spaces come on market. https://www.officespace.com/zip/20024
- 20002 has 148 commercial real estate spaces for lease, representing 836,116 sqft space. 37 buildings are available for sale. In the past 30 days, 20002 has had 5 spaces leased and 28 new spaces come on market. https://www.officespace.com/zip/20002
…it doesn’t look that bad overall but if you walk up Wisconsin Ave you will see that the numbers don’t make sense–something else is eroding this area.
…AND you might not find a convenience store like WaWa replacing high-end Restoration Hardware at The Wharf or in Capitol Hill. (more)
Is the same issue impacting residential real estate?
Residential Real Estate Market Stats
It’s starting to look as if what is going on in the commercial market may also be impacting residential real estate prices. Let’s compare Georgetown to The Wharf and Capitol Hill on Zillow–ouch! Georgetown comes up as “Cold”. Zillow’s algorithms are not always great on prices but this indicator is just a bit troubling…
If you read articles like this https://www.bisnow.com/washington-dc/news/neighborhood/georgetown-gaining-momentum-with-office-retail-activity-despite-new-waterfront-options-77816 in Bisnow you will think that things are going great but then again, just take a walk on Wisconsin Ave north of M Street and you will think you are in Detroit.
Is the poor maintenance of the side streets a result of the same problem? or is it unrelated?
Taking care of the sidewalks
I saw one of our older residents fall on the sidewalk the other day due to a loose brick–given Georgetown’s aging demographic this can’t be good. …Then there are the trees that no one seems to be trimming.
Where is SMS Holding’s Block by Block –when is their contract up for renewal?
What about the increase in the homeless population–is this related too?
Taking care of the homeless
…this is sad and seems to be getting worse. The city numbers reflect it getting better but for any resident of Georgetown that is out on a Friday night, it sure seems like it’s getting worse.
So, What is going on?
Plain and simple, there is not enough attention being focused on the details. At a macro-level there seems to be no issue but if you have lived here long enough you realize that something is wrong. The city needs to have a dialog, with action, about 1) the retail issues in Georgetown–specifically on Wisconsin Avenue 2) maintenance of side streets 3) the homeless. Washington DC, in general, is booming (it’s Number 8 in the Best Places to Live in the USA). Hot areas like The Wharf, Capitol Hill, 14th street, The Navy Yard are getting the city’s attention. It’s almost like city officials see Georgetown on autopilot–and why not… the Georgetown BIDs numbers look great —but the city needs to look deeper… it’s about the details.
Details Matter: http://newsroom.ucla.edu/stories/wooden-shoes-and-socks-84177 … “The first thing Wooden did was sit them down and teach them how to put on their shoes and socks. Doing this properly, Walton said, was the initial lesson for “everything we would need to know for the rest of our lives.”
Separate out Wisconsin Ave and M Street in Georgetown from the broader area and focus attention on the retail issues–Spend time on some of the innovative concepts outlined in this paper ‘How to revitalize your city or town’ (here) specifically for these 2 streets. Another idea is to work with Georgetown University’s MBA program.
Some items that stand out in other publications:
- How To Revitalize Your Local Main Street (here)
- “Encourage Entrepreneurs”
- 12 Strategies That Will Transform Your City’s Downtown (here)
- “Does your city have public policies (like tax abatements, grants, and other special incentives) to promote downtown development?”
- “Create a permanent public market”
- “Create a branded downtown entertainment district”
- How cities can revitalize dying urban spaces (here)
- “Details Matter” <<this is why BID needs to be addressed.
- Street Life After Retail: 5 Scenarios That Imagine the Future (here)
- “A legislated tax-penalty for street-level vacancies”
- How Cities Can Save Small Shops (here)
- Street Retail Looks to Malls in Figuring Out Ways to Cope With Big Rents (here)
- Idea for retailer: “ask for terms long found in shopping centers—low base plus a percentage rent (meaning the retailer pays the landlord a certain percent of every dollar in sales over a certain threshold).”
4 comments on “Georgetown — what’s wrong?”
A few more things that will impact the future of retail in Georgetown:
The United States has 40% more retail shopping space per capita than Canada, five times more than the UK, and an astounding 10 times more than Germany. Bottomline, we have too much retail space in Georgetown (and DC too).
Retail vacancy rates are under reported. In many local, regional, and national research reports “dark” retail space under which the tenant is still paying rent is not counted as “vacant” space.
The retail shopping user experience is Georgetown is not appealing, limited and expensive parking, narrow, uneven, dirty sidewalks, poor direct access public transportation options (extending the Streetcar line to Georgetown would be helpful, however, most likely cost prohibitive https://www.dcstreetcar.com/planning/future-lines/union-station-to-georgetown/; alternatively the proposed gondola from Roslyn to Georgetown would be beneficial both for traffic mitigation and retail support http://www.georgetownrosslyngondola.com/).
One traffic lane or parking lane on one side of the street could be eliminated from M Street and Wisconsin to enable the sidewalks to be widened. With ride hailing services and soon autonomous driven vehicles, perhaps our heavily traveled streets will not need to be as wide in the near future.
The M Street and Wisconsin Avenue retail corridors are too long.
Solutions – Move beyond retail – re-think Georgetown from the standpoint of work – live – play.
Provide incentives to developers to convert their upper floor space to residential and loft office space (greater residential concentration would support more retail).
The conservative reality is at least 25% of Georgetown’s retail space is obsolete and will never be “pure” retail space again. Once landlords get realistic with their rental rate expectations this space could be easily repurposed for office, service retail, and residential uses.
As to your residential neighborhood observations:
Georgetown’s residential brick sidewalks are too wide (in many cases curb to house). The city needs to get more aggressive with their maintenance of the sidewalks or put the maintenance responsibility onto the individual homeowner. Reducing residential sidewalk width and adding more green space along the residential curb lines could also reduce stormwater runoff (an affordable and practical green infrastructure solution).
While it is a fabulous place to live, in comparison to City Center, 14th Street, Ballpark, and District Wharf neighborhoods Georgetown looks tired, with leadership and community support we can fix this.
Some very valid points Scott in your blog post. Here’s my 2¢.
Accessibility is also a big deal. When I worked in Georgetown I loathed getting in and out of the area. Rush Hour was always congested. Fridays were the worst and it always took me 30 min to get from the waterfront to M Street. That’s just two blocks.
If it was that bad getting out it was equally bad getting in. I can thank that traffic however for teaching me the ins and outs of Whitehurst Freeway and Rock Creek Parkway.
If only Georgetown had said YES to Metro way back when you’d be teeming with foot traffic from more than tourists, people who work, live or go to school near/in Georgetown. It would ease some of the congestion as well, and it would make the Waterfront Park more inviting.
Not enough parking, and too expensive for what’s available.
RENT IS TOO HIGH FOR MOST RETAILERS
The stores are getting better deals and more traffic elsewhere in the city. Landlords aren’t picking up on that fact and are still charging like Georgetown can sustain a store like Restoration Hardware. Imagine something more practical, and something that would invite repeated visits. Even the changing of the guard every 4 years is not enough to sustain stores selling hard goods. Especially high end hard goods.
You’ve got an entire generation that cares more about experiences than acquiring physical goods. And when they do want something they go online. Or they want it delivered ASAP or both.
Now that the entire city is getting gentrified, Georgetown has real competition and it can no longer skate on reputation – real change has to happen before retailers move back in. I guarantee you within 5 years or whenever their lease is up, the Apple Store is headed for more fertile space.