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Rent on the Rise in Pentagon City

by ARLnow.com | August 25, 2010 at 1:58 pm | 2,571 views | 19 Comments

It’s getting more expensive to live in Pentagon City. Rent is expected to grow 4 to 7 percent over the next five years, according to online real estate publication GlobeSt.com. That follows a 4.9 percent increase in rent over the past year, according to a report from RED Capital Group.

The rise in residential rent comes at a time when a number of Pentagon City apartment complexes have sold at sky-high valuations. The Hampton Apartments at 1425 South Eads Street recently sold for $33.5 million, and the Metropolitan at Pentagon City luxury high-rise at 901 South 15th Street just sold for $125 million, according to the GlobeSt.com article.

RED’s report states that between the first quarter of 2009 and the first quarter of 2010, Pentagon City posted the fastest rate of multifamily rent growth of any Northern Virginia submarket. The 4.9 percent year-over-year growth in Pentagon City compares to 2.4 percent growth along Columbia Pike and -1.4 percent rent growth along the Rosslyn-Ballston corridor.

The effective first quarter rent was $1,902 in Pentagon City, compared to $1,700 in Rosslyn-Ballston, $1,407 along Columbia Pike and $1,327 in Falls Church. Apartment vacancy in Pentagon City decreased from 8.8 percent in 2009 to 6.2 percent in 2010.

Arlington Economic Development Director Terry Holzheimer says part of the reason for the increase in effective rent in Pentagon City may be due to the pricey new luxury apartment buildings which have recently started leasing in the area, bringing up the average. He said market fundamentals — higher-than-usual unemployment, stagnant personal income growth — don’t seem to support significant rent increases.

But higher rents on existing apartments have been pushing some residents out of the area. The Lenox Club apartment building at 401 12th Street South has been raising rent across the board by a minimum of 5 percent this year, according to a building representative. The rent increase has prompted a crush of moving van traffic as residents flee for cheaper buildings. That, in turn, has prompted management to bring in sign spinners to help attract new tenants.

It’s not clear what effect BRAC job losses will have on rent in Pentagon City, especially at a time when housing inventory continues to increase. As of the first quarter of 2010, 308 apartment units were under construction.

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  • Sarah

    I live in Riverhouse across from Pentagon Row, they just raised my rent by 9%! I am moving out, however if any of you live there, they seemed open to negotiation to keep me to stay.

    • RestonRunner86

      I moved into an older 1-BR apartment in Reston in May 2009 and was paying $1,135/month in rent. That would have been increasing to $1,325/month this Spring, an increase of $190 or a whopping 17%, so I, like many of my neighbors, had to relocate to another cheaper complex (which, sadly, I also hear may be jacking up its rates by 15%-20% next year, so I’ll be moving AGAIN!) Why haven’t salaries in this area kept pace with the increasing cost-of-living? It’s so frustrating when you invest so much of yourself into a solid education only to have to work two jobs just to afford a rodent-infested 1-BR apartment 20 miles from the city. This isn’t NYC. Reston isn’t Hoboken.

  • NPGMBR

    Wow 9% is significant and if you’re paying $1,700 you’re looking at an increase of over $150. I guess its why a friend of mine left the nice apartment he’d had for over ten years in Crystal City.

    As the article states there is some competition for renters (particularly on Columbia Pike) where new buildings are coming up and two are already complete. Older buildings have to be careful not to raise rents too much when there are fresh new entrants to compete with.

  • Joe

    So Sarah is moving out of River House. Good. Move out. We can get someone better off, someone who is willing to break the Democrat Party dominance over this county.

    The biggest enemy to good people in this County is the Democrat Party and their “affordable housing” lackeys. They fund all these units in places they don’t belong, like Lyon Village. Then these recipients vote Democrat, so that the oppressed populations in precincts like Madison, Thrifton and Rock Spring get swamped at the polls and remain voiceless. All in favor of people who don’t even belong in the County, teachers and janitors and gardeners who would never be able to live here if we’d let the market work.

    Before we spend more money on these things, let’s try this. Assign 0.2% of County tax revenues to the plaintiffs who paid OUT OF THEIR POCKET for extra scrutiny of the First Baptist glorified tenements. Give these defenders of neighborhood values the funds they need to get a real hearing in the courts before a judge who isn’t a known Democrat Party person. If you believe in this “Arlington Way”, put your money where your mouth is. Give the people trying to defend schools like Taylor and Science Focus an actual chance to defend their children from the invasion that will come if projects like these go through. Projects that simply create new voters for the Democrat Party on the public dime.

    • AllenB

      Thanks for my LOL of the day.

    • RestonRunner86

      Wow. Thanks for injecting a political rant into an unrelated article that examines the rapidly increasing cost-of-living in Arlington County. Now I can start off my day with a smile! It’s all Obama’s fault? Wow! Why didn’t I ever think of that? I feel so “enlightened!”

  • lily

    I’m a little surprised that rents in Pentagon City are higher than rents along the Orange Line. What’s the definition of that ‘effective rent’ statistic?

    I briefly looked at apartments in Pentagon City last year, and my general impression was that lots of places charge slightly less than Orange line rent, but in return you have to put up with a really weird layout, no washer/dryer in unit, etc.

    It just seemed like, at least at the lower end where I was looking, there isn’t much room to raise prices. Great location or no, if tenants have to take their laundry to the basement, you can’t charge them luxury rents for the privilege.

  • J.

    I’ve heard of rent in Clarendon going up $500 for a 2BR and $300 in Ballston for a 1BR! I’m lucky to live in an older (non-luxury) building in Va. Sq. where my 1BR rent only went up $50 this year to $1200. I’m not complaining though with all the new businesses coming to Clarendon. If you don’t mind living somewhere without a pool and gym and that has a little well-aged charm you can find some decent prices. But you’re definitely going to pay for all the amenities.

  • http://www.bitcheswhobrunch.com Becca

    I also live in Riverhouse, and I just upgraded into a two-bedroom apartment. The competition was fierce, and they weren’t budging on prices, which was disappointing. When I moved in there in December 2008, I got a huge one-bedroom with a phenomenal view for the price of a studio – but that’s because the buildings were mostly empty. They recently (in the last year or two) were taken over by a new management company, which has been marketing the shit out of those buildings. Now they’re filling up fast.

    The increases are no surprise. Pentagon City is a great place to live. I just wish the quality of the restaurants and shops in Pentagon Row would rise along with the rents.

    And, they might be building new apartment buildings on Columbia Pike, but those aren’t Metro accessible, so off many people’s shortlists.

    • NPGMBR

      Actually, the new buildings on Columbia Pike are very Metro accessible. They sit right on the most successful bus route (16) in the county. From where those buildings are its a trip of less than 10 minutes to Pentagon and Pentagon City Stations.

      In addition, there is the now very popular route 16Y (the one I take) that goes from Columbia Pike via Rt 50 directly into the District via Foggy Bottom terminating at McPhearson Square. This route makes it possible for commuters to completely avoid Metro Rail in its entirety.

    • Katie

      Echoing NPG…

      The 16Y express bus to McPherson Sq is a great deal. $1.50 to get to work in 20-40 minutes, A/C, a seat, no crowding…I’ll take that over being able to walk to Metro any day.

      And when the 16Y bus isn’t running, there are loads of buses that go to Ballston (10B), Court House and Clarendon (ART 77) and Pentagon and Pentagon City (all the other 16 buses).

  • http://www.hpaulmoon.com Paul

    Oh, real classy, Lenox Club. I hope that your instant-gratification strategy of gouging tenants backfires on you (as it should in a free market economy), and you are left with less income while your sign-spinners go on spinning.

    I love capitalism, especially when it bites back at greed.

  • Chris

    Not sure that I’d count on a definition of metro accessible that discounts bus routes. The 16s run up and down Columbia Pike all day directly to the Pentagon metro station.

    It’s not just Pentagon City and Columbia Pike that are seeing a spike. The Alexan 24 at S. Glebe and 395 is now complete; next door the Dolley Madison renovation were completed two years ago. There are lots of new condos in the Shirlington area and some new buildings in Del Ray/Arlandria. The whole area is seeing a spurt of construction and so far rental rates seem to be increasing alongside the supply.

  • TGEoA

    Pentagon City = LOW rent

  • http://shirlingtonv.blogspot.com/ Googla

    The report didn’t mention how the Shirlington apartment complexes are doing. I would imagin pretty well. True, there’s no Metro, but there are several buses a day that go nonstop (six to ten minutes) from the Shirlington Bus Station to the Pentagon Metro Station.

  • RestonRunner86

    It’s a little disappointing to see that average rents for a 1-BR apartment along the Columbia Pike corridor are now over $1,400/month. I thought this was the “cheap” part of Arlington? Looks like I may be better off biting the bullet and living with a CraigsList stranger in a 2-BR apartment after all. The cost-of-living here still isn’t something I’ve adjusted to, considering my parents pay half as much for a monthly mortgage payment on an upscale 3-BR home on a huge lot in PA. You can’t build more high-rises in Arlington soon enough to keep pace with the demand! Continue the infill! :-D

    • NPGMBR

      The Columbia Pike corridor used to be very affordable but lately whats been happening is apartment owners have been modernizing their buildings doing anything from minor to major renovations.

      The building I live in underwent a 3 million dollar renovation about three years ago. All the apartments’ kitchens were modernized with new cabinates, appliances and counters and reconfigured from the old galley style. They also upgraded the air and heating systems, added a fitness center, business center and the best upgrade; added a parking deck to accomodate more vehicles.

      Since then all of the buildings in the area with the exception of one have undergone some sort of upgraded and I believe its because they knew they had to try to do more to compete with the new buildings coming up.

      • RestonRunner86

        I just continue to foresee a problem with housing affordability for those of us stuck being squeezed in the middle—earning too much to qualify for subsidized housing but not earning quite enough to comfortably afford “market rate.” I’m currently paying 50% of my NET income on rent/utilities, which is down from 60% last year before I was given a decent raise. If every complex along Columbia Pike is trying to upgrade in a mad hurry, then soon it will become just as expensive as the Ballston/Rosslyn Corridor or the Pentagon City/Crystal City Corridor. Then where will you be able to find an AFFORDABLE 1-BR apartment in Arlington? Nowhere.

        I checked out a great web site about Columbia Pike earlier that had an alphabetical listing of every apartment complex in the area. I was encouraged to see some 1-BR rents were still in the $1,100/month-$1,250/month range, which is what I can swing. Sadly, though, it sounds as if in another five years that area will be so “yuppified” that $1,500/month+ will be ALL you can find. If every developer in Arlington is building apartments featuring granite countertops, stainless steel appliances, marble foyers, etc., then of course they’ll have to charge high rents to recoup their investments and turn a profit. I’m happy with formica counters, white appliances, and wall-to-wall carpet. It’s frustrating that the middle-class in NoVA continues to be so “squeezed.” As I said in another reply this isn’t NYC. I’d expect to pay $1,700/month for a 1-BR apartment in Brooklyn—not suburban Virginia.

  • MENTALLECT

    Rental prices are escalating faster than inflation. Perhaps with BRAC personnel transferring out, some of the market pressure will be relieved. I love the Crystal/Pentagon City area. Some of my coworkers live in Maryland, and prefer a long commute to paying inflated prices for housing. To me, $1500 a month for a 1 bedroom is reasonable with the ceiling being about $1,800. My own rent jumped 11% with the new lease. It’s the principle which is causing me to consider moving to the Old Town Alexandria area which is nice, close, and more reasonably priced. I spent a few years in Texas where housing prices are not Donal Trumped. I think BRAC will certainly help, but Arlington has developed a GOLD COAST mentality regarding housing.

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