City staff said at a meeting earlier this week that, for the local real estate market, it is both the best of times and the worst of times.
While Alexandria’s taxable property value continued to increase dramatically, on the ground property owners face very different realities in the city based on whether that property is residential or commercial.
“This year is very different; it’s a tale of two markets, a very mixed experience,” said Kendel Taylor, the director of finance for the City of Alexandria. “In the past couple years, no matter what you owned, you were going up around the same rate. This year if you owned a home vs a hotel, your experience is vastly different in this year’s assessment report.”
City reports noted that the residential tax base increased by 6% overall, which a press release said reflected a strong residential market in Alexandria combined with low mortgage interest rates.
“This is the largest increase in the residential category since 2006,” the city said. “The average assessment for all residential property types, including single-family homes, townhomes and condominiums increased by 5.7%, to $615,858. The average single-family home value increased by 5%, to $839,961. The average condominium value increased by 7.7%, to $375,070. The increase in the total tax base for condominiums is only 3.98% due to the addition of luxury condos near the waterfront to the 2020 tax base during the year.”
But on the commercial side, the city’s markets have been devastated by closures from COVID-19, particularly in the hospitality and retail sectors.
“The value of commercial properties decreased $342.5 million as of January 1, 2021, compared to January 1, 2020,” the city said. “The commercial tax base decreased 1.96%, compared to an increase of 2.8% in 2020. A significant decline was offset by an increase of 3.53% in the multifamily rental sector, which included $110.1 million in new growth. COVID-19 pandemic conditions resulted in substantial decreases in the hospitality and retail market sectors, with declines of 29.64% and 10.72%, respectively. Commercial properties, including multifamily apartments, comprise 40.6% of the tax base.”
Taylor said that, despite this past year’s decline, it’s likely that commercial property values will rebound — though full long-term economic recovery could still be years away.
“We are an attractive place to live and still an attractive investment,” Taylor said. “We look at COVID and we hear stories about delinquencies in rent and things like that: investors look long term and COVID is temporary. You make real estate investments in multi-family properties thinking long-term.”
The property assessments will now be used in the city manager’s proposed budget presentation scheduled for Feb. 16, and ultimately for a rate adopted by City Council on May 5.
(Updated 2/11) One of the prominent office buildings in the Mark Center, 2001 N. Beauregard, has been sold for $71.7 million to a Mexican real estate investment firm..
The Mark Center is a West End office park that served as a hub for Department of Defense offices before 2005 Base Realignment and Closure forced many of those offices to relocate to more secure facilities.
The press release from real estate company Newmark, which represented seller G8 Capital, didn’t say who purchased the building, but records indicate the buyer is Mexican real estate investment company Grupo Haddad.
“Investors are attracted to Northern Virginia real estate due to the underlying strength of the market as the vaccine begins to roll out and a reoccupation is on the horizon,” said James Cassidy, one of Newmark’s executive managing directors in a press release. “Investor appetite for mid- to long-term leased assets has remained strong throughout the pandemic. With a single tenant and nearly eight years of remaining term on the full building, 2001 North Beauregard attracted significant attention.”
The office is 239,945 square feet over 12 floors and is currently leased to Systems Planning and Analysis, Inc.
Photo courtesy Newmark
Governor Declares State of Emergency — Virginia Gov. Ralph Northam said he is watching how other states are handling COVID-19 testing and that drive-thru testing may be an option. [NBC 4]
ALIVE! Might Shutter Programs, Needs Donations — “We continue to operate as normal, but anticipate that at some point we may advise volunteers to stay home and close programs. We are doing our best to ensure food supplies are adequate and are increasing deliveries to our regular drop off sites while we are able. Donations to support our food reserves are critically important at this time, as we are sending out everything to our regular clients to help them prepare while we are still able to do so.” [ALIVE!]
Fundrise Acquires Carlyle Site For Development — “Fundrise acquired the 14-acre site at 2000 Carlyle Ave. from a joint venture of Perseus Realty and ELV Associates for $75 million… The online platform allows private investors to pool money into a series of funds that invest in residential and commercial properties.” [Bisnow]
Port City Brewing Co. Releases Statement on Coronavirus — “We understand that the recent outbreak of COVID-19 requires extra precautions in public spaces like ours… We strongly encourage friends across our community to use caution when deciding where to visit and what to attend during this pandemic.” [Port City]
Gas Station Offering “White Glove” Full Service — In response to the coronavirus, Yates Service, Inc. on Thursday announced the launch of complimentary white glove vehicle pickup and delivery service and complimentary full-service gas pump attendants at its gas station at Yates Automotive’s Sunoco station in Del Ray/Old Town. [Zebra]
Virginia Young Democrats Convention Postponed — “This is an unprecedented step taken in response to the increasingly concerning developments with COVID-19 here within the Commonwealth and the country. The convention planning committee did not make this decision lightly, but the safety of our members comes above all else.” [Facebook]
New Office to Residential Conversion — “A Mark Center office building in Alexandria is now set to be converted into apartments. D.C. real estate investment firm PRP LLC plans to convert 4900 Seminary Road, a 12-story, 209,000 square foot building, into residential… PRP wants to put 213 market-rate units into the building, which also has room for about 4,100 square feet of ground-floor retail.” [Washington Business Journal]
Mayor Reacts to Retrocession Suggestion — “With Democrats now in control of the Virginia Statehouse, Republican Delegate Dave LaRock says he is concerned that liberal values are taking over so he’s calling for Arlington and Alexandria to be split off and given to D.C… Alexandria Mayor Justin Wilson calls LaRock’s statements a ‘comical clown move.'” [Fox 5, Twitter]
Send-off For Historic Fire Apparatus — “The Friendship Fire Company purchased an ornate hose reel carriage in 1858. Now, thanks to the support of the Friendship Veterans Fire Engine Association, community donors, and its win as the No. 1 Virginia Endangered Artifact of 2019, Historic Alexandria is sending the hose carriage off for much-needed conservation.” [Zebra]
Lawmakers Considering Shopping Cart Bill — “Senate Bill 631 would make it so that the cost of removal, including disposal, of an abandoned shopping cart will be charged to the cart’s owner. The ordinance originally applied just to Fairfax County, but Surovell said Arlington and Alexandria asked to be included in the new legislation.” [ARLnow]
Alexandria’s Jay and Arline Hoffman just donated $18,500 to wipe out school lunch debts for students at T.C. Williams High School and its Minnie Howard Campus.
“These kids can’t graduate unless these debts are paid,” Hoffman, the local developer behind Hoffman Town Center, told ALXnow. “Arline and I are blessed to be able to do it.”
T.C. Principal Peter Balas said that the school is thankful to the Hoffmans for their generosity.
“Studies repeatedly show the importance of nutrition on academic success,” said Balas, who received the check last week. “By donating to clear all negative balances on student lunch accounts for Titans in grades 9-12, they have helped to ensure all our students have access to high quality and nutritious food while in school.”
The couple, who own the Hoffman Company real estate firm, are frequent contributors to the school system. Last year, they donated $25,000 to provide William Ramsay Elementary School with enough funds to buy school uniforms for the entire student body. Incidentally, Arline Hoffman is a graduate of George Washington High School, before it merged with T.C. and was converted into a middle school.
“My family and I have been very blessed with the Hoffman Town Center, and blessed to be a part of Alexandria for the last 50 years,” Hoffman said, and urged more donors to come forward. “I think few people understand that you can contributing the school system directly.”
Hoffman said that he and his family will continue contributing to the school system.
“If something comes up you can count on our being there,” he said.
Redevelopment Plan in North Old Town — “As the American Physical Therapy Association prepares for a move to Potomac Yard, its current headquarters in North Old Town Alexandria is now slated for a major mixed-use redevelopment.” [Washington Business Journal]
ACPS Teacher’s Harrowing Journey — “When Onelio Mencho-Aguilar was 13-years-old, he left his mother and siblings to embark on a treacherous journey through rural Guatemala to the U.S. alone… against the odds, he found a home here in Alexandria and with the support he found, he thrived. First as a student at T.C. Williams High School and now as a teacher at the International Academy where new arrivals to the U.S. are educated and supported.” [Alexandria City Public Schools]
New Suicide Prevention Effort — “DCHS now offers two locations where Alexandria residents and employees can obtain free locking medication boxes and firearm trigger or cable locks as part of Lock and Talk Northern Virginia. This safety program is a collaborative initiative of the Suicide Prevention Alliance of Northern Virginia.” [City of Alexandria]
Community Services Board Marks Anniversary — “On Tuesday, Dec. 10, at 7 p.m., in City Council Chambers, Alexandria Mayor Justin M. Wilson will present members of the Alexandria Community Services Board (CSB) with a proclamation for 50 years of community service and support.” [Press Release]
An old brick building at 215 N. Payne Street is in the middle of conversion into a new “flexible workspace” called The Loop.
Developer Braddock Commercial, whose website indicates that their sole project seems to be this new coworking space, said clients will be able to pick out their own furnishings and furniture for the offices at The Loop.
The website says the company offers private offices and open desks as needed, with access to a kitchen, meeting rooms, video conference, a gym and more. A Facebook post noted that the office will also have a dedicated podcast room.
Offices in the project are expected to run from $3,500-$4,000 per month, with 9-18 month memberships.
No clients are currently listed on the site, but local health program Alexandria Wellness said they will have an “open gym” at the location.
A Board of Architectural Review case from 2012 noted that the building was constructed in the late 19th century or early 20th century. A storm in 2010 damaged the stucco and vinyl siding on the building but exposed the brick facade that’s there today.
Rendering via Braddock Commercial