Toby Bozzuto and Bob Kettler, courtesy Bisnow
Yesterday UrbanTurf attended the Washington Real Estate Summit hosted by local publisher Bisnow. While the event catered mostly to the commercial real estate crowd, there was one panel that offered some insights of interest to home buyers and sellers. It was a discussion about “multifamily” (industry jargon for residential condos and apartments), and the panelists were Jim Abdo, the visionary developer credited with the resurgence of Logan Circle; Bob Kettler, founder of Kettler, which in recent years did a number of high-profile condo projects in Shirlington, Alexandria, Bethesda, and Reston; and Toby Bozzuto of Bozzuto Development, responsible for many suburban communities throughout the region.
Following are some of the highlights from the discussion among these local real estate heavyweights:
- Jim Abdo, known for his preference for urban markets, stressed what readers of UrbanTurf will already know: there is a looming condo shortage in many of the area’s hottest markets (namely Northwest and the Rosslyn-Ballston Corridor in Arlington). “If you look at certain markets, there isn’t enough supply. And the demand is coming like a tidal wave,” he said, referring to new home buyers in the market for one-bedroom condos.
- As for particular neighborhoods, Abdo said his firm will focus on the Rosslyn-Ballston Corridor (where they did The Wooster and Mercer Lofts and have near-term plans for the undeveloped lot across the street), H Street NE (where they did The Landmark Lofts at Senate Square), and Brookland.
David Kessler and Jim Abdo, courtesy Bisnow
- Brookland in particular got Abdo excited. He said it is a “completely underserved” but very stable area with steady jobs from Catholic and Trinity universities and nearby Washington Hospital Center. He acknowledged that Brookland is currently light on amenities but that his firm is going to do something about it. “We’re creating a main street as part of our development so we can create a sense of place that isn’t there now,” he said, referring to his firm’s plan for a several-hundred-unit development that is slated to break ground next year. (Recall that both Abdo and EYA have big development plans for Brookland. See A Development Grows in Brookland for more.)
- Toby Bozzuto said that sales at his firm doubled in 2009 over 2008, and that prices are even starting to increase modestly. He noted that DC and Northern Virginia bounced back first, and that Maryland is lagging by about six months. Still, his firm is looking at opportunities to develop along the BWI corridor.
- Like Abdo, Bozzuto sees lots of the demand for housing coming from first-time home buyers looking for one-bedroom condos.
- Bozzuto and Abdo both think that now is a great time for developers to start building new condos, but taking advantage of that opportunity is stymied by the fact that banks won’t provide the necessary financing.
- Kettler was a little more subdued, saying that in many instances prices have come down so far that they are about the same as his cost to build a project. This leaves him no room to profit — and no motivation to start new projects.
- There was some talk of “burning off concessions”, which means leasing up apartment buildings enough that they can stop offering prospective renters the aggressive incentives seen lately. (Renters: take note!)
This article originally published at http://dc.urbanturf.com/articles/blog/a_few_insights_from_dc_real_estate_titans/1886
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