Getting in on the Ground Floor in Southwest

by Will Smith

Rendering of big plans for the waterfront in Southwest

In a city where real estate watchers are always speculating about the next hot neighborhood, it is curious that DC’s Southwest quadrant gets so little attention. Neighborhoods like Brookland, Trinidad, Capitol Riverfront, and Historic Anacostia are circulated as “the next” Logan Circle or Columbia Heights, and yet Southwest Waterfront appears to offer as much promise, if not more, than these areas. UrbanTurf spoke with agents and bloggers active in Southwest to try to understand whether this neglect of “the little quadrant that could” is justified — or whether it represents a great opportunity for forward-thinking home buyers.

The main reason to pay attention to Southwest is the $1.5 billion-dollar redevelopment plan that is set to transform the area over the next decade along the neighborhood’s waterfront. While this plan has been in the works for years, two redevelopment initiatives that have already occurred — the new Arena Stage theater and the retail plaza Waterfront Station/4th Street — are widely considered big successes and have fueled development momentum.

“The Waterfront Station redevelopment along M and reopening of 4th Street absolutely changed the feel of the neighborhood,” Monument Realty’s Kirk Salpini, whose firm is selling the Potomac Place Tower condo project at 4th and I St SW, told UrbanTurf. “Waterfront Station has been the single greatest revitalization impact that we’ve experienced in the neighborhood. When paired with Arena Stage, it provided a strong one-two punch to shine the spotlight on Southwest.”

Despite those successes, all the scheduled development hasn’t had much of an impact on the psychology of recent home buyers. Greg Rooney, vice president of development at The Bernstein Companies, said that buyers at his company’s Waterfront Tower condo project reacted to the plans with relative indifference.

“As much as we’ve tried to co-market alongside all the redevelopment, it hasn’t been of primary importance to our buyers,” Rooney explained. He said that next-door Metro access and price were the factors that drove the success of Waterfront Tower, where four units out of a total 123 are left for sale.

Waterfront Station, courtesy The Little Quadrant That Could

Rooney also noted that while buyers themselves might not be cognizant of the big changes coming to Southwest, evidence of that change is starting to show up in neighborhood real estate metrics. “When we started Waterfront Tower, no one thought we’d sell at the price per square foot that we did,” he said of the average pricing in the building. He also pointed to the building behind Waterfront Tower, an apartment called 1001 at Waterfront, where rents have increased over 25 percent in just the last year and there is now a waiting list to move into the building.

That’s not to say that real estate appreciation has started sweeping across the neighborhood. On the contrary, one of Southwest’s strongest selling points is the affordability of its homes (by DC standards). According to Redfin.com, the average price per square foot is about $300; in Columbia Heights that figure is $483 and in Capitol Hill $561.

“The prices are so depressed there,” says Coldwell Banker’s David Bediz. “It’s a fantastic place if you’re looking for a good bargain.” Bediz recently sold a completely renovated 1,000 square-foot two-bedroom with a balcony and parking spot for $359,000. He sold another two-bedroom — 1,200 square feet, balcony with a view, decent condition — for only $335,000. “You can barely touch an efficiency for that price in Dupont,” he said for comparison’s sake.

As to why home prices aren’t yet reflecting the coming development, Jenn Smira, an agent with Lindsay Reishman Real Estate who is active in Southwest, thinks it’s still too early for home buyers to be drawn in by it. “Once we see more development, that’s when people will really start to take notice of Southwest and begin buying there,” Smira says, comparing it to the H Street Corridor before streetcar construction began.

Arena Stage, courtesy Bing Thom Architects

Bediz thinks that the on-again, off-again progress of the redevelopment plans have hurt the perception that anything big will ever really materialize. “A lot of people are fatigued of hearing about this planned development and then not seeing it come to fruition,” he said, noting that the big plans for Southwest redevelopment have been talked about since the early 2000’s, but it’s only recently that there appears to be real momentum.

Earlier this month, the Washington Kastles announced they would move to a new 3,000-seat stadium at The Wharf, the name given by the Hoffman-Madison Waterfront team to the redevelopment of the Southwest Waterfront. A few weeks later, The Graduate School announced plans to lease 190,000 square feet of space in one of the planned buildings at The Wharf. Securing The Graduate School as an anchor tenant was a boon for the larger efforts toward the area’s redevelopment.

With the DC area seeing tentative signs of a new real estate cycle, William Rich, author of neighborhood blog Southwest…The Little Quadrant That Could, believes that the time is finally right for Southwest to benefit from new development. “This will be the real estate cycle that Southwest gets redeveloped,” Rich predicts, noting that if it is executed as developers intend, the new waterfront will be a regional draw.

Does that make Southwest a good option for strategic home buyers hoping for some real estate appreciation? Rich thinks so. “Now would be a good time to get in on the ground level for what aspires to be an exciting destination in the coming years. All of the development promises are starting to become more concrete.”

David Bediz agrees. “The first place I recommend to buyers looking for a good investment opportunity is Southwest. If I was to invest my money right now, I’d consider Southwest pretty seriously.”

As for it getting less attention than other up-and-coming areas, agents say that should be seen as a positive to would-be buyers, not a negative. After all, once a neighborhood’s improvement becomes obvious to everyone, the opportunity to buy there at a good price rapidly disappears.

“I think folks who are purchasing in Southwest now are making a really wise investment precisely because it is before the development begins,” says Jenn Smira, who is listing the Southwest Waterfront condo where Hubert Humphrey once lived.

To be sure, there are reasons to be wary about buying in Southwest, not least of which is that all the planned development could, once again, stall. And even if all the plans are fully realized, it will take a decade or longer. In the meantime, the area is pretty light on amenities, especially restaurants and bars. For those who prefer a bustling urban neighborhood, Southwest will feel sleepy and a little isolated. Finally, condo/co-op buyers will be frustrated by the eye-popping monthly fees evident in many buildings. (This two-bedroom, two-bath corner unit looks like a great deal at $279,000 — until you notice the monthly condo fee of $950.)

Even given those issues, Southwest Waterfront is worth a look by DC home buyers who are priced out of the city’s more well-known neighborhoods. The planned redevelopment of the waterfront is a once-in-a-generation effort that could reward those who buy early and stick around long enough to see that transformation come to life.

For more on Southwest Waterfront, see:

This article originally published at http://dc.urbanturf.com/articles/blog/getting_in_on_the_ground_floor_in_southwest/3242


  1. Paul said at 10:12 am on Wednesday March 30, 2011:

    Part of the reasons that prices are “depressed” is because a majority of residences are co-ops.  I looked at this area because of the price points but some of the co-op fees were as high as $800 a month.  In all the properties were a bit lower but did’t want to purchase into a co-op.

  1. Frauelein said at 10:40 am on Wednesday March 30, 2011:

    I bought down here a year ago after living in Chinatown for 2 years, and have grown to love the community and the people. Looking forward to the coming development, whenever it starts.

  1. saladman8283 said at 12:23 pm on Wednesday March 30, 2011:

    Southwest is an underappreciated gem and will only improve as these projects get underway.  And when you’re ready to get in on the ground floor, I own a gorgeous all-brick 4 BR/3.5 BA end unit townhouse with a 2 car garage in Capitol Square that I’d love to sell you!

  1. Nicoli said at 12:50 pm on Wednesday March 30, 2011:

    I looked at Southwest and ran into the same issue as Paul. All the “bargain” condos seemed to have very high monthly fees and were pretty old. The area has potential but still a number of negatives which, along with other reasons, caused me to end up buying in Hill East. SW has a lot of potential. In my opinion it has the best transit access in pretty much all of DC.

    Any news yet if the Charles Smith/Whole Foods project is going to get their tax abatement? That project would be transformative and I hope it goes through.

  1. Janson said at 1:03 pm on Wednesday March 30, 2011:

    I’m sure SW is less expensive than other neighborhoods, but some of the claims are way off. For example, “You can barely touch an efficiency for [$335,000] in Dupont,” [Coldwell Banker’s David Bediz] said for comparison’s sake.

    Huh. What’s he talking about? I count five efficiencies for under $200,000 in Dupont. For $335,000, there are about ten one-bedrooms listed.

    I would even go so far as to say that taking into account things like walkscore, the prices in Dupont aren’t that much higher than they are for the same apt in SW.

    I’m still very excited about SW’s development and how it will reconnect the city to the Potomac. I’m even more excited by the development at Navy Yard…

  1. Justin Russo said at 1:19 pm on Wednesday March 30, 2011:

    All the scheduled development hasn’t had much of an impact on the psychology of recent home buyers because it’s just that: “scheduled”.  And a large chunk of that development is supposed to be publically funded.  Where is that money supposed to come from in the current economic climate?  I agree SW has potential, but it will be quite a while before that potential is reached.

  1. Hattie McDaniel said at 1:34 pm on Wednesday March 30, 2011:

    Too many housing projects.  Once they get rid of those, then the place will blossom.

  1. Jason said at 3:00 pm on Wednesday March 30, 2011:

    Say it again Hattie. PJ’s everywhere, and all that hideous, dark construction from the 70’s ‘urban renewal’ era put a cloud over that entire neighborhood if you ask me…

  1. Nikki Smith said at 3:35 pm on Wednesday March 30, 2011:

    Something potential homebuyers should keep in mind is while the monthly fees may be higher than a condo, they typically include property taxes. For example, a property assessed at $200K will cost $1700 annually in property taxes for a condo or single family home. That number is included in the co-op’s fees.

    If I’m not mistaken, the U Street Corridor and Logan Circle were questionable neighborhoods about 10 years ago. I wonder what their Walkscores were like back then…

    It seems foolish to me to skip over Southwest because construction’s been “scheduled” for some time and was halted with the economic downturn. Where else in the city are they even thinking about pumping $1.5 billion?

  1. IA said at 5:11 pm on Wednesday March 30, 2011:

    As echoed before, high coop fees are what is keeping me from buying here.

  1. anonymous said at 5:16 pm on Wednesday March 30, 2011:

    yes, the property taxes are included in coop fees but not in condo fees, but the trade off is not 1:1.  Coop property taxes are significantly less than those for condos.  For example, my 1 Br Cleveland Park coop costs me $600-$700 in annual property taxes, while the inferior (in size and prestige) 1 Br condo across the street pays approx $2400/year.  Coop fees more often (than condos) include some or all utility costs which also tends to make coop fees “seem” higher than condo fees.

  1. s said at 5:25 pm on Wednesday March 30, 2011:

    reiterating some of the earlier comments, yes co-op fees appear higher than HOA fees at a condo, but you do typically get more in terms of utilities, on-site maintenance, etc. the tax structure also is different so you aren’t paying that $3K/yr on a $300K place either. when i did the math month-by-month, it wasn’t that much more if at all.

  1. Nikki Smith said at 6:08 pm on Wednesday March 30, 2011:

    You are preaching to the choir. smile I’ve lived in a Southwest co-op for almost a year.

    As a recent first-time homebuyer myself, I remember being scared off initially by the high co-op fees, that is, until I realized what all’s included for that flat fee. I don’t have a utility bill. I have maintenance staff on-hand to fix clogged drains and leaky faucets (for free).

    Beyond the fees, though, the Southwest co-ops seem to have more storage & closet space and more affordable parking options, and they are situated on mature parcels of land surrounded by water and/or fully grown trees.

    I would say to potential homebuyers who are concerned about the higher fees, don’t forget you have to put down 20% for most co-op purchases. They are not FHA approved. At 20% down, on a $175K purchase (which is high for a SW co-op), mortgage is less than $1000. Even if you had an $800 co-op fee (also a high estimate), you’re looking at $1800/mo, which is competitive with rental rates in the area—only you get to own your place, too.

  1. Potomac Place Tower said at 10:51 am on Thursday March 31, 2011:

    Folks, if the condo fees scare you but you understand the value of the neighborhood (which despite what Mr. Rooney said of their buyers at Waterfront Tower, I believe ALL of our buyers understand and appreciate that fact) you should come by our building.  We have 620 Sf studios price in the low $200’s with a condo fee of just $300/month which includes ALL utilities.  I challenge anybody to find a fully renovated condo that is just 1 block to Metro and just 3 blocks from the Waterfront and the National Mall at that kind of value.

  1. my 2 cents said at 11:21 am on Thursday March 31, 2011:

    personally, I think it’s really ugly.  I would consider the neighborhood if the prices are in line with what the neighborhood is NOW.  But in many cases, I have found that places are priced at what the neighborhood COULD BE.

  1. Vicente Fox said at 12:42 pm on Thursday March 31, 2011:

    situated on mature parcels of land

    LOL.  At what age does a parcel of land reach maturity?

  1. Nikki Smith said at 11:22 am on Friday April 1, 2011:

    I’d say a piece of land can be deemed mature by the time the trees stretch upward of the 7th floor. Tall trees and waterfronts make for better views than parking lots IMHO.

  1. Vicente Fox said at 12:49 pm on Friday April 1, 2011:

    So you were talking about the trees, not the land.  There is a difference, you know.

  1. swester said at 11:50 pm on Friday April 1, 2011:

    SW is one of those areas that you’ll wonder 5 years from now why you didn’t buy when prices were low. So much development on the way, it’s incredible. It will be virtually unrecognizable a decade from now. And it’s fantastic place to live.

  1. Waterfront Tower said at 2:52 pm on Saturday April 2, 2011:

    There are several co-ops in the area but there are also some new condos like Waterfront Tower which has extremely low fees which include most utilities. One jr. 1 condo fee is $288/mo!!! the developement IS coming and the pricing is some of the best in Washington for such an accessible location.

  1. STEVE GROSS said at 2:25 pm on Tuesday April 12, 2011:


    Until realtors (and even many cooperative OWNERS) understand that the ‘cooperative fee’ is separate from other costs typically paid through the cooperative, cooperatives will continue to have an ‘image’ problem!

    When comparing a cooperative fee to a condominium fee, one must include the costs INCLUDED in those fees! For instance:

    1) NO Condo “fee” includes real estate taxes. They are paid directly to the DC Treasurer. Cooperatives pay one real estate tax bill for the entire corporation, and each shareholder pays a portion based on their shares, and this is paid THROUGH the cooperative. However, this element is NOT A COOPERATIVE FEE! It IS REAL ESTATE TAX!

    2) MANY condos may be separately metered for electric, gas, cable, heating, cooling, etc,  while many cooperatives are NOT separately metered. IF so, one must EXTRACT this portion from the ‘cooperative fee’ when comparing it to a condo where these charges are NOT INCLUDED in what one pays their association monthly.

    This ‘charge’ paid through the cooperative is to pay for these utilities, and is NOT a ‘fee’ charged by the cooperative.

    3) Blanket Mortgage. If a cooperative has a blanket mortgage, then the payment for same is a MORTGAGE, and NOT a “FEE”. When one buys a unit in a cooperative that has an underlying mortgage, part of the PURCHASE PRICE INCLUDES a LOAN for which an amortized payment is due to pay off same. THIS IS NOT A FEE, NOR SHOULD IT BE INCLUDED AND CONSIDERED AS SUCH!

    Until buyers, sellers, agents, and people writing articles about cooperatives understand these differences, people will CONTINUE to have the misperception that cooperative ‘FEES’ are absurdly high, especially relative to condominiums!


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