Developers, Brokers Not Worried About Metro Ridership Decline

By Jon Banister

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. 

Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments.

"I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'"

Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. 

 

Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be.

 "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." 

Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good."

Doug and Norman will both speak at Bisnow's BMAC East event on October 20. On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." 

John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro.

"While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015.

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

Metro is having a bad year. SafeTrack surges this summer forced weeks-long closures and several headline-grabbing incidents raised public concerns about the rail's safety. Last week's ridership report only further exacerbates Metro's strugges: it showed an 11% ridership drop in the most recent quarter and a 7% year-to-date drop over 2015. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Despite this bad news, DC's top developers and brokers have little concern about building and drawing tenants to Metro-centric developments. "I think Metro still checks a box, a very important box," Douglas Development principal Norman Jemal, above, tells Bisnow. "In many cases it’s a threshold issue for developers. Residents, apartment dwellers and office tenants all gravitate to Metro...I don’t think any developers read this ridership report and said, 'Oh, I don’t need to be near Metro.'" Norman remains confident in public transportation as a viable alternative to driving in DC. He is so confident, in fact, that Douglas Development's H Street mixed-use project will have just five parking spots for 30 units and will instead offer a $100 SmarTrip card and a Bikeshare membership to tenants. Developers, Brokers Not Worried About Metro Ridership Decline Bisnow Stonebridge Carras principal Doug Firstenberg says he views this year's decline as a blip and is more focused on the long term, where he predicts Metro will be successful—in part, because it has to be. "We’re not making any adjustments to our underwriting of TOD because of where Metro is today," Doug tells Bisnow. "We fundamentally believe Metro is the most important issue facing the region, therefore people are going to commit the resources and the needs to make Metro work." Doug says he doesn't focus on the overall ridership for the entire rail system, rather he looks at what stations and lines have the most growth and where certain asset classes are performing well. "What we look at is different lines and different demographics," Doug says. "The Green Line is a heavily residential line because it doesn’t have as many fundamentals for office, but it's got great residential metrics. When were looking for office sites—we may be crazy, but we still do—the Red and Orange/Blue lines are pretty good." Doug and Norman will both speak at Bisnow's BMAC East event on October 20. Cushman & Wakefield Tom McHugh Courtesy: Tom McHugh On the brokerage side, tenant reps say the demand for space near Metro stations has not dissipated due to falling ridership. Cushman & Wakefield senior director Tom McHugh, above, says the top 10 largest relocations in NoVa this year have all been signed in offices within a quarter-mile of a Metro stop. "We're seeing tenants in general wanting to be near Metro, which doesn’t necessarily address Metro ridership, but certainly there is an interest in companies wanting to be proximate to Metro," Tom says. "Now the next piece of the puzzle is once a tenant moves near Metro, are their employees using Metro? That’s a different question." John Schlegel John Lugar Transwestern Transwestern Transwestern's John Schlegel (left, with colleague John Lugar) says the combination of frustration with Metro, alternative transportation methods and people living closer to work has caused a dip in ridership but doesn't change the fundamental need for companies to be near the Metro. "While ridership is probably down, I don’t think demand for public transportation is going to dissipate over the long term," John says. "You’ve got people who work downtown from all parts of the greater DC area, providing those employees access to public transportation is a fundamental I don’t think will ever change."

Read more at: https://www.bisnow.com/washington-dc/news/commercial-real-estate/how-metros-ridership-decline-affects-dcs-real-estate-industry-65083?utm_source=CopyShare&utm_medium=Browser

How the elections will affect the D.C.-area real estate market

By David Howell

 

Thirty-two thousand jobs. Theoretically, that is how many positions are up for grabs in the Washington region as the nation will soon elect a new commander in chief. That much potential turnover has to have an effect on the DMV’s real estate market, right?

Let’s take a look at the executive branch. Regardless of the presidential election’s outcome, there will be a change in the occupant of the White House, and there are about 3,000 presidentially appointed jobs. Let’s assume that every one of those positions changes and a considerable number of lower-level staff positions change along with them. That could be as many as 8,000 jobs total.

The reality of Washington’s political job market is that many who will fill those seats already live here. People cycle in and out of public-sector jobs with considerable frequency, but let’s be generous and estimate that half of those 8,000 jobs will be filled by people who relocate to the metro area.

Let’s also assume that half of those will buy homes sometime in their first year here. If this calculation is accurate — although history tells us that this is a significant overestimation — that would be 2,000 home sales.

There are 24,000 jobs on Capitol Hill, but close to 9,000 are considered nonpartisan and generally do not change with election cycles. So the “political” staff on the Hill numbers about 15,000. But even with 435 House and 33 or 34 Senate seats on the line every two years, there is usually not an enormous amount of turnover.

In 2014, 95 percent of the members of the House running for reelection won. Forty-one members retired — and their party kept the seat in each and every case. There was a significant change in the Senate with a net change of nine seats. In 2010, we saw the biggest party change in recent memory with a 15 percent change in the House and a 16 percent change in the Senate.

So if we take an extreme example and assume we have another major shakeup of seats with a 15 percent turnover in Congress and assume that there is a 100 percent replacement in the staffs of those newly elected members, that would translate to 2,250 jobs changing hands.

Most staff jobs on Capitol Hill pay less than $50,000 per year — no one is buying a home on that salary — and even many newly elected officials look for rental housing or even live in their offices.

As is true with the executive branch positions, some of the people who will fill the new congressional staff positions already live in the D.C. area. But let’s assume that half of the new hires come from out of town and half of those buy a home sometime in their first year in the DMV. That would add up to about 560 home sales.

(McEnearney Associates)

 

So how much impact would 2,560 additional home sales have on our market? There were slightly more than 50,000 home sales in the immediate D.C. metro area last year, so that would be a 5 percent increase. But as the table shows, there is no historical correlation between home sales and election results. On the heels of the major changes in the makeup of Congress in 2010, the number of sales in the immediate D.C. area fell almost 5 percent the following year.

The election of 2008 brought a change in the White House and a change of 29 seats in Congress. There was an increase of almost 20 percent in the number of sales in 2009 compared with 2008 — so on the surface one might be tempted to say these elections had a major effect on the region’s real estate market. However, in February 2009, Congress passed and President Obama signed into law the first round of the Homebuyer’s Tax Credit, and the number of sales jumped nationally as well.
There are other significant factors at play. Individuals do not make a decision to purchase a home in a vacuum. Just moving to the area to take a new job — even a new job on the Hill or in the executive branch — does not cause a person to ignore overall market conditions or their personal circumstances.

Also, although there may be new occupants of these jobs, these are not “new” positions like we see created when a company moves to the D.C. area. The elections may make a big difference when it comes to policy, but when looking at residential real estate, we should not expect much impact.