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Business & Tech

Arlington Economic Development Gives Positive Outlook on Growth

AED's Director Terry Holzheimer reviewed and previewed the direction of Arlington's rapid business and real estate development growth.

If you've walked down Arlington's main boulevards during the past several weeks, you've most likely noticed the ever-present buzz and clank of construction machinery, the hum of industry. It seems like every day a new real estate project is breaking ground.

2011 is off to a booming start when it comes to Arlington's new construction. In a slideshow presentation early this morning, Terry Holzheimer, the current director of Arlington Economic Development (AED), shed light on these developments and provided his analysis of Arlington's economic climate.

The presentation took place, appropriately enough, at George Mason University's newly completed Founders Hall in Virginia Square. Holzheimer provided a sweeping overview of the sturdy state of Arlington real estate to the assembled mass of local developers, real estate brokers, business leaders, and Arlington County officials.

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The hour and a half long presentation was titled "Hot Markets, Cool Places." In it, Holzheimer highlighted the manner in which all aspects of the Arlington economy, and especially the real estate market, weathered the financial collapse and ensuing economic recession, quickly stabilized, and is now beginning to show strong signs of growth.

Holzheimer tempered his positive outlook with a list of formidable challenges, including homeland security, local regulations, the emergence of competing Metro-accessable office markets (Tysons and Dulles), aging commerical building stock, congestion and more.

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The review was broken down into subcategories, with the office, residential, hotel, and retail markets all receiving relatively high marks. Holzheimer characterized the office climate as volatile by nature, with federal investment always fluctuating and big name employers moving in and out.

He said that Arlington remains one of the most stable office space suppliers in the country, with an impressively low seven percent vacancy rate. AED stressed that with the impending completion of the Silver Line and the inevitable growth of office space offerings in Tyson's and Dulles, Arlington must press forward to anchor it's market position and increase its desirability and distinctiveness.

The presentation offered up positive news on the housing front as well. Arlington averages somewhere between 1,100 and 1,200 detached home sales per year and, during the recession, the County hovered only 15% below that rate. More recently, the outlook has improved: the market has seen a steady rise in home prices and home sale contracts, and a welcome decrease in the average amount of time for sale homes spend on the market. The condo market also remains stable and growing, reported Holzheimer.

The positive news continued as AED touched on the hotel sector. Developers constructed seven new hotels in the last six years, adding over 1,500 new rooms, and vacancy has never dipped below 70% in the last decade--all astoundingly good statistics.

The most recent jewels added to the Arlington hotel crown were solidified just last week, as JBG and Marriott finished the Renaissance and Residence hotels as part of their Gateway project in Crystal City. Holzheimer suggested that this kind of rapid development does not saturate the market, but improves it by encouraging competition and promoting further growth.

The segment of the presentation title that read "Cool Places" was meant to refer to the growing number of retail options in Arlington. This sector is also a point of pride, Holzheimer explained, scrolling through a slide show of restaurants, bars, clubs, and cafes opened in the last year. Shots of new local hot spots like Bayou Bakery, Sweetgreen, and Fireworks Pizza edged their way into the photo stream. One of the more staggering figures presented followed the photo collage: Arlington boasts an average of $752 in retail sales per square foot, the highest in the region.

For Arlingtonians who want to witness all this good news in action, one needs only to take a stroll down a few of the county's many busy thoroughfares. Five new real estate projects have broken ground since the new year began: Skanska's office project at 1776 Wilson Blvd., Abdo's upscale condominiums at Gaslight Square (Clarendon Blvd. in Rosslyn), JBG's apartment project Sedona and Slate further down Clarendon, and Ironwood Realty's Garfield Park in Clarendon, just to name a few. Holzheimer reported that eight projects were already under construction to begin the year (Monday Properties 1812 N. Moore, not 1801 N. Moore, project for example), and seven more are expected to break ground before the end of 2011. Many more remain in the planning stages of the development pipeline, and several other projects simply need financing to get moving.

While the county's real estate future looks bright, Holzheimer stressed there is room for improvement and further growth. The demand for residential units and office space is growing at a pace faster than what is set be delivered in the coming years, according to AED. Thus they are encouraging developers to build, in order to maintain momentum.

Readers interested in a full list of current and pending real estate projects in Arlington should go to AED's website where a 2010 Fourth Quarter Report provides an exhaustive rundown. The slides from Holzheimer's presentation are also available there for viewing.

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