A rendering of the lobby at 2M.
It seems that everywhere you look in the DC area, there is a new rental project sprouting up. The result of all the construction is a supply level that is outstripping demand in the region. And that is a good thing for renters moving into new buildings next year.
Free rent, free parking and other concessions should be expected as new projects look to entice renters with concessions in 2014.
“We got a little ahead of ourselves and produced a few too many units too quickly,” said Grant Montgomery, who leads apartment research at real estate research firm Delta Associates. As a result, he said the DC market may be heading into “a couple-year period or so where renters will be more in the driver’s seat than they have in the past.”
A fourth-quarter report due out in January will likely show an uptick in the concession trend, Montgomery said. That trend is in line with other notable changes in the new apartment market for the DC area, where rents dropped this year for the first time since 2009.
The last time the concession trend in the DC area was in full swing was four years ago. One building offered two months free rent along with three months free parking. Another offered the choice of two incentives — two months free rent or a new 17-inch MacBook and iPhone.
This round of concessions will not be as generous and will be most pronounced in small geographical areas where several developments are opening at once. That includes sections of northeast DC, as well as Capitol Riverfront, Potomac Yard, and Courthouse. Each area has several projects due for completion at about the same time over the next few years.
The rooftop pool at 77H.
Take NoMa, for example. Early in 2014, 77H and 2M are expected to join newly-opened Camden NoMa as they hunt for renters in the same three-block radius. A leasing agent at Camden NoMa said specials on the property are already built into unit pricing. That’s a trend Montgomery said is likely to continue as developments explore using software that adjusts rental rates according to demand, availability, and other market factors. However, it also means that renters looking one week could get a different price the next.
Also in NoMa, Trilogy is offering renters a month’s free rent if they sign a 13-month lease. Aria on L, new in spring 2013, is offering renters of one-bedroom apartments a $700 gift card if they move in by a certain date.
Overall, for renters looking to move, it is a good time to shop around, though apartment dwellers staying put might experience the slight slowdown as just a “pause” in their creeping rent prices, Montgomery explained.
“The trend is a small shift, not a wholesale change,” he said. “If you move to a vacant building that’s leasing up, that’s where you’ll get the concession.”
This article originally published at https://dc.urbanturf.com/articles/blog/why_2014_could_be_the_year_of_the_renter/7928.
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