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Market Report

Washington, D.C. Retail Market Report

2024 Investment Forecast

Metro’s Rapid Densification Will Steer the Retail
Sector Through Supply-Induced Flux

Elevated retail construction follows a surge in apartment stock. Washington, D.C.’s retail sector expects the completion of a half-decade high 1.3 million square feet this year. Construction is generally warranted, as it coincides with the fastest two-year span for apartment creation on record, with over 30,000 units to be delivered between 2023 and 2024. Although 35 percent of new retail supply is anticipated to come online without a tenant this year — resulting in a vacancy bump — the vast rental pipeline should elevate retailers’ space needs over the long-term. Navy Yard-Capitol South, Bethesda- Chevy Chase, and Crystal City-Pentagon City have the greatest potential in this regard, as each area’s active pipeline comprised more than 10 percent of their local inventories at the onset of 2024. Short-term demand for retail space, however, is concentrated in Fairfax County suburbs, with higher-earning households in Tysons Corner and Falls Church offering retailers stalwart recession resistance. Home to headquarters for Freddie Mac, Capital One, and PBS, among others, Tysons Corner’s corporate roster will support a stable base of consumers with a high propensity for discretionary spending. 
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