Arlington, VA

The rise in property values in Arlington is accelerating post-HQ2.

Late last week Arlington County announced that its assessments for 2020 had risen 4.6% on average — 4.9% for commercial properties and 4.3% for residential properties. That compares to an average property assessment increase of 3.5% last year.

The rise in property values will almost certainly mean a rise in property taxes for Arlington residents. The county, in its announcement, seemingly discounted the idea that tax rates — currently $1.026 for every $100 in assessed value — would come down to offset the rising assessments.

“Although the growth will result in additional revenue, the County faces continued funding choices in the coming fiscal year,” the county’s press release says in the first paragraph. In November the County Board directed County Manager Mark Schwartz to propose a budget that either keeps the tax rate steady or slightly lowers it; his budget proposal will be released in February.

The county says Amazon’s arrival is at least partially responsible for rising property values, though apartment buildings accounted for much of the commercial assessment increases.

Commercial property values were driven by a decline in the office vacancy rate, continued new construction, demand for rental properties, and Amazon-related leasing activity. Apartment property values increased by 8.9 percent, office values increased by 2.5 percent, and general commercial property (malls, retail stores, gas stations, etc.) grew by 1.8 percent.

“Arlington continues to be a place where people want to live and work,” Schwartz said in a statement Friday. “The investment we make in our community through real estate tax revenue helps us maintain the high-quality amenities and public services that make Arlington so attractive.”

The full press release is below, after the jump.

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Demolition on the Amazon HQ2 site in Pentagon City is expected to begin soon.

The 2.1 million square foot office-and-retail development along S. Eads Street, the first phase of Amazon’s permanent second headquarters in Arlington, was approved by the County Board in December.

Now, construction equipment is being staged ahead of demolition of the two-story warehouse building and parking lot currently on the site. According to an off-the-record presentation given to local civic associations earlier this week, a slide from which was obtained by ARLnow, demolition and site preparation is scheduled to start within the next month or two.

Excavation will run from the second quarter of 2020 to the end of the year, while construction of the above-ground portion of the complex is expected to start in the second half of 2021. Construction and interior work is expected to wrap up by the middle of 2023, according to the presentation.

In the meantime, the growing contingent of Amazon employees in Arlington will work out of temporary office space in Crystal City.

“We’re looking forward to beginning demolition at the Metropolitan Park site in the very near future; some staging activity has already begun,” an Amazon spokeswoman told ARLnow. “Amazon is already here and we’re hiring. As the MetPark site takes shape, we will continue to grow the teams in our leased space in Crystal City, where we now have nearly 450 employees.”

It’s not yet clear whether Amazon will hold a groundbreaking ceremony as work at the Pentagon City site gets underway.

Some local residents, particularly those who live in apartment buildings across the street, have expressed concerns about construction noise from the project. Permitted working hours extend until 9 p.m. on weekdays, we’re told.

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Morning Notes

HQ2 May Have Security Robots — “Amazon.com Inc. wants to keep its second headquarters safe. And it’s looking at a variety of methods like incognito barricades, a police presence on the campus, external facing cameras, and, oh yeah, ‘security robots.'” [Washington Business Journal]

More on Tuesday AM Robbery on the Pike — “The victim was in sitting in his parked vehicle, when an occupied vehicle pulled in front of him. The occupants of the vehicle engaged the victim in conversation and asked him to make change for their bill. During the exchange, the suspects gave the victim a lesser sum of money in return for the change and attempted to drive off. When the victim attempted to stop the vehicle, the suspects exited, assaulted him and attempted to steal his wallet.” [Arlington County]

CO Leak at GW Parkway Building — Arlington County firefighters responded to a possible carbon monoxide leak at the GW Parkway maintenance facility near Crystal City yesterday afternoon. Two people were evaluated for CO-related symptoms, per scanner traffic, and the leak was traced to a malfunctioning HVAC system. [Twitter]

Major Reston Property Owner Buys in Clarendon — “An affiliate Comstock Holding Cos. Inc. has acquired the Hartford building in Clarendon, extending its local footprint beyond its major outside-the-Capital Beltway developments in Reston and Ashburn. Comstock… bought the nine-story building at 3101 Wilson Blvd. from an affiliate of Chicago’s Heitman Capital Management for $128.75 million.” [Washington Business Journal, Globe Newswire]

Photo courtesy Peter Golkin

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Morning Notes

Pike Lane Closures Prompt Apology — “Arlington County Manager Mark Schwartz has apologized that residents, business owners, and commuters weren’t informed how their lives would be temporarily affected by a road construction project on Columbia Pike, near the Fairfax County border,” per WTOP. County officials will be holding a press briefing about the lane closures on the Pike this morning. [WTOP, Arlington County]

Park Near HQ2 May Have Security Features — “Amazon.com Inc. is weighing methods for securing its second headquarters and appears to be looking across the pond for ideas. The U.S. embassy in London… avoids fences in favor of a number of ‘defense strategies’ disguised as a ‘welcoming landscape that is experienced as a public park,’ an Amazon representative told Arlington County officials.” [Washington Business Journal]

Ballroom Closing Is a Changing of the Bro Guards — “The millennials who do end up in Arlington are being drawn to a new generation of bars and nightspots, many of which are run by chef Mike Cordero and partner Scott Parker, including the bustling three-level tequila/tacos restaurant Don Tito… Clarendon may always have a place for the venerable Whitlow’s on Wilson, where the combination of a roof deck and cover bands makes it the most likely refuge for those missing the Ballroom… But it’s clear that Clarendon — at least, its bro-centric archetype — will never be the same.” [Washington Post]

Alabama Man Busted With Loaded Gun at DCA — “An Alabama man started the new year on a sour note when he brought his loaded handgun to Ronald Reagan Washington National Airport (DCA) on the first day of the new year.” [Transportation Security Administration]

New Slate of County Board Meetings Set — “Arlington County Board members will hold 11 monthly meetings (Saturdays and the subsequent Tuesdays) in 2020, along with several hearings on the proposed fiscal 2021 budget and capital-improvement projects. Regular meetings will be held on Jan. 25, Feb. 22, March 21, April 18, May 16, June 13, July 18, Sept. 12, Oct. 17, Nov. 14 and Dec. 12 and, in each case, the following Tuesdays.” [InsideNova]

‘National Gateway’ Building Sold — “An affiliate of The Meridian Group has sold part of its National Gateway campus in Arlington County, one of a handful of office properties poised to benefit from an expected surge in demand tied to Amazon.com Inc.’s second headquarters. The Bethesda developer sold National Gateway II, a roughly 238,031-square-foot building at 3550 S. Clark St., for nearly $60 million.” [Washington Business Journal]

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Citing the arrival of Amazon’s HQ2, the parent company of Sport&Health says it will be expanding and renovating its fitness club in Crystal City.

The expansion will add 8,000 square feet to the club at 2231 Crystal Drive, adding additional space for strength training and studios to a location that already includes a cycle studio and indoor salt water pool.

The work is expected to begin this spring and wrap up this summer. The club will remain open during construction.

More from a press release:

US Fitness Holdings, LLC, has announced that it will expand the Sport&Health club at Crystal Park (2231 Crystal Drive, Arlington) in conjunction with the JBG development of National Landing. Sport&Health Crystal Park currently includes an indoor salt water pool, a Cycle Studio, Mind&Body Studio and Group Fitness studio in addition to the newest cardio and strength equipment.

The 8,000 square foot expansion and renovation will elevate all aspects of the club including additional fitness space for strength training, functional turf training areas and expanded studios. Sport&Health Crystal Park will be the fitness anchor to the National Landing providing the best value and fitness experience at an affordable price.

“We’re excited to expand our location along with the new development of the National Landing area and the new Amazon headquarters,” said Kirk and John Galiani, Co-Chairmen of US Fitness. “Our successful partnership with JBG has allowed us the opportunity to deliver the ultimate fitness experience to this rapidly growing community.”

US Fitness has over 50 locations nationally and Sport&Health is the company’s award-winning, full-service health club brand in the DMV area with 10 premier clubs.

The expansion and renovation are scheduled to begin in the Spring of 2020 and to be complete by the Summer of 2020. US Fitness anticipates minimal disruption to the current facility with most of the work taking place in the expansion space.

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Morning Notes

Christmas Tree Collection Underway — “Trees collected by the County the first two full weeks after Christmas are turned into mulch available from County facilities. From Dec. 30 through Jan. 10, place trees at curb no later than 6 a.m. on your regular trash collection day after removing ALL decorations, nails, stands. Do not place trees in plastic bags.” [Arlington County, Twitter]

Amazon Continuing to Hire for HQ2 — “By the end of 2020, Amazon plans to reach nearly 1,600 employees at the Arlington headquarters, and by December 2021 it expects more than 3,500 workers. The hiring will accelerate further in 2023 and beyond.” [Washington Business Journal]

Arlingtonians Drop Off Tons of Glass — “Cheers to a successful start to Arlington’s glass recycling drop-off program. The County is closing out 2019 with more than 1 million pounds (500 tons) of collected glass for recycling in less than nine months. That’s equivalent to the weight of 27 ART buses.” [Arlington County]

Courthouse Apartments Trade Hands — “Bell Partners Inc., based in Greensboro, has acquired Vista on Courthouse, a 220-unit multifamily complex in Arlington, Virginia. The property will be renamed Bell at Courthouse and will be managed by Bell Partners. The acquisition from Equity Residential is Bell Partners’ second this year in Arlington.” [Triad Business Journal]

Reminder: NYE Events in Arlington — For procrastinators, here’s ARLnow’s listing of notable New Year’s Eve events in Arlington. [ARLnow]

Photo courtesy Dave Statter

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Morning Notes

Amazon ‘Excited’ for HQ2 Construction — “As we look ahead to 2020, we’re excited to start construction on our first buildings and hear more from our neighbors on how our investments can benefit the entire community — and continue to hire… Today we have more than 400 employees working from our leased office space on Crystal Drive, 18th Street S and South Bell Street in Arlington.” [Amazon]

Nearly 400 Amazon Job Openings in Arlington — Amazon currently lists just shy of 400 open positions in Arlington, from systems engineers to advertising account executives to event managers. [Amazon]

APS May Bring Back Paper Report Cards — “The effort by Arlington Public Schools to go high-tech with the distribution of student report cards appears to have hit a major snag. Two School Board members on Dec. 19 expressed significant concerns, and a third offered a milder form of disquiet, with the school system’s decision to scrap printed report cards in favor of online reporting.” [InsideNova]

Yorktown Boys Basketball Still Undefeated — Yorktown High School’s boys basketball team has extended its winning ways by winning the annual Bulldog Bash holiday tournament. The team’s 10-0 run included a 24-point comeback win on Dec. 20. [InsideNova, InsideNova, Twitter]

Q&A With New Economic Development DirectorIncoming Arlington Economic Development Director Telly Tucker, in a Q&A: “I really want to first start with listening and learning about priorities and interests from all of those different entities to figure out a way to massage them into working toward common goals.” [Arlington Magazine]

Charitable Clothing Store Opens in Arlington — “There is a new option in Arlington that’s already helping hundreds of kids in need… Clothesline for Arlington Kids isn’t exactly a store. There are no price tags, and no money is exchanged. Instead, low-income children who qualify for free or reduced-price lunches can come here for clothing, free of charge.” [WJLA]

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Morning Notes

Metro Tests New Tech in Pentagon City — The Transportation Security Administration and Metro rolled out new security technology at the Pentagon City Metro station on Tuesday. The system “can detect an individual concealing an improvised explosive device, such as a suicide vest or another weapon.” [Fox 5, Twitter]

HQ2 Leads to Development Boom — “Arlington officials, developers, market researchers — everyone, really — predicted that Amazon.com Inc.’s arrival in the county would generate a development boom in the company’s neighborhood. So far, they’ve been right.” [Washington Business Journal]

Tafti Sworn in as Prosecutor — Parisa Dehghani-Tafti was sworn in Monday as Commonwealth’s Attorney for Arlington and Falls Church. On Tuesday she warned a crowd at a progressive think tank there has been a “growing narrative in pretty extreme circles that trying to reimagine the criminal-legal system is somehow going to make us less safe…somehow disrespects victims.” [Twitter, Blue Virginia]

Airport Authority Voting on $15 Wage — After years of protests, the Metropolitan Washington Airports Authority is set to vote today on a new policy that would increase the hourly wages of contracted workers — baggage handlers, wheelchair attendants, lobby agents, skycaps, cabin cleaners, airport concessions and airline catering workers — from $12.75 to $15 by 2023. [Press Release]

Beyer Pushing for Quieter Airplanes — Rep. Don Beyer (D-Va.), who has long advocated against excessive noise from aircraft landing at and taking off from Reagan National Airport, is calling on NASA to study ways to make commercial jetliners quieter and cleaner in a new bill. [Press Release]

Northam Proposes Nixing Vehicle Inspections — “Gov. Ralph Northam wants to end state-mandated vehicle safety inspections and cut vehicle registration fees in half, proposals his administration says would eventually save Virginians more than $280 million per year. But motorists would have to pay a few dollars more each time they fill up on gas under a proposal to increase the state’s motor vehicle fuels tax from about 22 cents per gallon to 34 cents per gallon over three years.” [Virginia Mercury]

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This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: I have read articles about the 22202 zip code suggesting everything from extreme appreciation to homes now selling for pre-Amazon prices. Can you shed some light on what’s actually happening in that market?

Answer: After months of articles about extreme appreciation in 22202, the Amazon HQ2 zip code making up neighborhoods like Crystal City, Pentagon City, Aurora Highlands/Hills and Arlington Ridge, there was an article published last week by the Washington Business Journal claiming that prices are now below pre-Amazon HQ2 announcement levels. The supporting data was that median sold price in November 2019 was 12% lower than November 2018 prices.

This is yet another example of lazy reporting on Amazon’s impact on local real estate with the sole intention of generating clicks.

First of all, if you use the average sold price instead of median, there was a 2.3% increase in prices from November ’18 to November ’19, not a 12% decrease. Second, with a drop in total sales from 30 in 2018 to just 12 in 2019, with prices ranging from $255,000 to $1,145,000, there’s just not enough data to draw any sort of reliable conclusion on market performance by comparing the two months.

To generate reliable real estate trends, you either need a lot of data points (sales) or drill into smaller data sets. With that said, let’s dive into some real analysis on how Amazon HQ2 has impacted residential real estate for its new neighbors in 22202.

Market Make-up

The 22202 market offers a diverse supply of housing. This year, condos have sold from as little as $195,000 for a 500 sq. ft. studio to $1,250,000 for a 2,900 sq. ft. 3 BR/3 BA penthouse. The least expensive detached home sold for $630,000 to be torn down and the most expensive a 6 BR/4.5 BA for $1,600,000.

Homes in the area tend to be pretty old with most detached homes being built prior to the 1960s and only one condo building has delivered since 1990.

Of the 135 homes to sell so far in 2019, 76 were in condo buildings, 47 were detached homes and 11 were townhouses.

Condo Market

Inventory levels in the 22202 condo market took a huge hit, dropping 40% from 130 sales in 2018 to just 76 in 2019 (with two more scheduled to close in 2019). The decline is attributed to owners choosing not to sell (holding out for more appreciation), certainly not lack of demand.

As a whole, the average sold price in the 22202 condo market increase 22.8% ($402k to $492k) and median price increased 18.6% ($379k to $450k) for properties that went under contract after Amazon’s November 13 HQ2 announcement.

However, don’t think individual property values appreciated ~20%. The entire market is skewed higher because of a big drop-off in less expensive studios (60% decline) and 1 BRs (33% decline).

Let’s take a deeper look at how property values actually changed by looking at similar sales within comparable buildings. I’ve grouped all buildings along Arlington Ridge and Army Navy Drive, along Crystal Drive, and both Eclipse buildings so that we have larger sample sizes to compare pricing activity from within comparable buildings. I limited this data set to one- and two-bedroom units.

The percentages for each building group represent the change from properties sold in 2018 and 2019 that went under contract pre-Amazon announcement vs post-Amazon announcement (November 13, 2018).

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Morning Notes

Thieves Hit Three Local Car Dealerships — A group of thieves stole a dozen cars from three car dealerships in Arlington. Some of the thefts were caught on surveillance video. In one instance, five vehicles were damaged as the thieves made their getaway. [WJLA, Arlington County]

Some Amazon Neighbors Wanted More — “Amazon.com Inc. easily won approval this weekend to start work on its first new HQ2 construction in Arlington, yet many of the company’s new neighbors remain exasperated over the benefits the community will receive… Though Amazon’s proposed investments may seem substantial, some people residing close Met Park feel that these benefits will inevitably fall short in mitigating the impacts of the construction.” [Washington Business Journal]

Spotted: Albino Squirrel — An albino squirrel was caught on video in Arlington’s Waverly Hills neighborhood. [Facebook]

Accounting Firm Touts ‘Zero-Waste’ Office in Rosslyn — “Grant Thornton LLP has consolidated its workforce in the Washington, D.C., area in the firm’s MetroDC office – its first zero-waste office in the country. The office, located at 1000 Wilson Blvd in Arlington, unites staff from other Washington-area locations and is the firm’s largest, by headcount, in the United States.” [Grant Thornton]

Nearby: Alexandria Bans Scooters from Sidewalk — The Alexandria City Council has voted to ban electronic scooters from sidewalks across the city. [ALXnow]

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(Updated at noon) The Arlington County Board voted unanimously over the weekend to approve the first phase of Amazon’s permanent Pentagon City headquarters.

The vote on the 2.1 million square foot office-and-retail development along S. Eads Street was not met with the same degree of protests that greeted the vote on Amazon’s $23 million local incentive package in March, though union carpenters showed up en masse to protest what they say are labor violations at Amazon’s under-construction, temporary office space in Crystal City.

Amazon says it fired the contractor in question and pledged to ensure prevailing wages are paid to construction workers, while providing labor compliance oversight going forward, the Washington Post reported.

The first half of HQ2, which is situated around Pentagon City’s Metropolitan Park, will feature:

  • Two towers, up to 22 stories high, with room for around 12,500 employees
  • An underground parking garage with nearly 2,000 spaces, as well as more than 600 bicycle parking spaces
  • A daycare center open to Amazon employees and the community
  • Street level retail space with outdoor cafe seating and greenery
  • Two new street segments, including a new 14th Street S. and E. Elm Street

As ARLnow previously reported, Amazon has agreed to a host of community benefits, including:

  • $14 million for an expansion and redesign of Metropolitan Park, from the designer of NYC High Line
  • A record $20 million affordable housing contribution
  • Sidewalk and streetscape improvements, with new protected bike lanes, bus shelters and utility undergrounding
  • A 700-person meeting center that will be available to the county and other users after hours
  • Highly energy efficient design, with LEED Platinum certification and use of renewable energy for everything other than backup power and cooking

Empty warehouses and a surface parking lot will be demolished to make way for the 6.2 acre development. The new towers are expected to open in 2023, according to previous public presentations by Amazon.

A second phase of Amazon’s permanent HQ2 at the still-vacant PenPlace site along 12th Street, housing the other half of its expected 25,000 employees, will follow the Metropolitan Park phase. In total, Amazon expects to build 4.2 million square feet of new space.

Also on Saturday, the Arlington County Board “accepted a $200,000 federal grant to provide innovative workforce development services to 50 persons in Arlington and Alexandria who will be negatively impacted by increased development in the area,” according to a press release.

The county press release about the approval of Amazon’s Metropolitan Park site plan is below, after the jump.

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