Multifamily development in DC is expected to get a boost in 2016 and the following years, helping to ease the demand for local renters. Following a year where nearly 13,000 units were delivered, the Washington D.C. metro entered 2016 with a multifamily vacancy rate hovering just above 4 percent, with some submarkets below that figure.
- Northwest D.C. will see it's share of multifamily project starts in 2016.
- The H Street/NoMa market may be avoided by developers.
- Large waves of annual multifamily deliveries have been for the most part absorbed.
Following a year where nearly 13,000 units were delivered, the Washington D.C. metro entered 2016 with a multifamily vacancy rate hovering just above 4 percent, with some submarkets below that figure.
For developers that will deliver units this year, an estimated 12,000 according to Marcus & Millichap, these rates are no doubt good news and a sign that recently completed rentals should be absorbed.
Counting on this absorption and future demand in 2017 and 2018 are a consortium of developers that will break ground on multifamily projects this year.
Multifamily development in DC’s northwest neighborhoods
Near Adams Morgan and the U Street Corridor, Mill Creek Residential Trust will begin the conversion of the former Italian Embassy into luxury Washington, D.C. apartments. The developer purchased the building last June and plans to construct an additional nine-story high rise next to the renovated embassy.
Just north of Nationals Park, JBG Companies recently started a 290-unit project and plans to build two additional buildings, with up to 425 units, on an eastern parcel next to the ongoing development.
The two additional buildings would feature up to 225 condos and 200 rentals.
Are parts of DC already overdeveloped?
The H Street/NoMa submarket may be one area developers are cautious of moving forward.
National Real Estate Investor recently cited the submarket as experiencing the most rental inventory growth, spanning 2013 to the third quarter of 2015, of any major submarket nationally.
During the 2013 to 2015 period, roughly 2,725 new units were delivered, which grew the market’s inventory by 95.3 percent.