By Summer Newman, Senior Research Analyst, Washington, DC
Over the past 10 years, Washington, DC has undergone an incredible urban revival, and previously blighted areas just a few years ago are once again vibrant neighborhoods after decades of neglect. With a swell in population growth that has been predominately fueled by the millennial demographic, Washington’s Metropolitan area has resulted in the most, well-educated workforce in the country. Over half of the area’s residents hold at least a bachelor’s degree. With the surge in population that is increasingly urban focused and limited housing stock – the District’s strict zoning codes and height restrictions limit where and how tall new multifamily developments can be built – the expanding number of residents now look to previously long-neglected areas. One of the hottest neighborhoods experiencing this resurgence is Shaw.
Bound by Howard University to the north, Massachusetts Avenue to the south, New Jersey Avenue to the east and 11th Street to the west, Shaw has quickly become one of the city’s hottest retail neighborhoods. The area has a long, rich, and diverse history. During the early 1900s, Shaw was the pre-Harlem center of African-American intellectual and cultural life of the country. For a time, the area was better known as Duke Ellington’s birthplace, with Shaw’s Howard Theatre hosting many of the Jazz Age greats. Ledroit Park, the area immediately south of Howard University, and its colorful, unique Victorian architecture were once home to a thriving upper-middle class African-American community. Following the assassination of Dr. Martin Luther King Jr. in 1968, Shaw was among numerous neighborhoods that erupted in rioting. Following the riots, a period of economic decline set in, lasting until approximately 2010 when the District’s surge in population growth began to push east into rapidly gentrifying areas.
The 14th Street/Logan Circle Corridor was among the first of these areas, with the opening of the P Street Whole Foods in 2000 after much lobbying from local residents. Since then, a plethora of nationally renowned chef-driven restaurants have opened, along with major retailers including West Elm, Room & Board, Shinola, Filson and Marine Layer have all opened their doors. With residential developers maxing out their floor-area-ratio (FAR) allowance, which mandates the maximum developable square footage on a given area of land, and with resident-demand remaining at peak levels, development has expanded east and into the Shaw neighborhood.
In just a few short years, Shaw has transformed from an area known for surface parking lots, vacant land and abandoned row houses into a vibrant neighborhood that is home to gleaming, newly delivered apartment buildings that boast some of the best amenities and views in the city. Currently, we’re tracking 1,100 new multifamily units under construction, with an additional 4,000 proposed units in the pipeline. One of the most recent deliveries is JBG’s 310-unit Atlantic Plumbing apartment building, which not only hosts a dynamic rooftop with city vistas for its residents, but also is anchored by Landmark Theatres as well as a mix of boutiques and trendy eateries that range from fast casual to upscale. General asking rents range between $50.00 to $70.00 per square foot (PSF) and rising, though still below the more established 14th Street Corridor, which ranges between $75.00 and $200.00 PSF.
Shaw has quickly become a seamless extension of the bustling 14th Street/Logan Circle and U Street corridors. For visitors, it is difficult to distinguish the subtle differences between the neighborhoods. For residents, it is an increasingly connected area – one where you can brunch on 14th Street, shop on U Street, catch a movie in Shaw, grab dinner back on 14th Street, return to Shaw for a concert at the long-standing 9:30 Club before bar-hopping between Shaw and 14th Street for the night (Washington, DC is a work-hard, play-hard kind of town after all). Boasting an average household income of $117,035 per year, Shaw is well poised to absorb the multifamily and retail deliveries planned for the next 12 to 18 months.
Demand for new retail shows no signs of stopping. Comprised of 43.4% of Shaw’s overall population, Millennials’ appetite for chef-driven, experiential dining options remains insatiable. With the 14th Street Corridor reaching market saturation of restaurants – the DC Government limits the maximum number of food-service options on any particular block – the explosive growth of Shaw’s development and its unique, historic architecture establish the neighborhood as a prime market for the next wave of retail growth from both apparel and restaurants.
Douglas Development’s Blagden’s Alley – truly an alley tucked behind Shaw’s residential streets – has been transformed into a pocket that offers retailers and consumers authentic industrial architecture, something that is so rare in the District. In the past few months, the Blagden’s Alley development has welcomed some of the most highly anticipated restaurants, including La Colombe, The Dabney, Village Whiskey, and Columbia Room. Along with new and highly anticipated restaurant concepts, Shaw is quickly garnering attention as the District’s newest destination for independent fashion retailers. In the past 12 months, Kit & Ace, Frank and Oak, Chrome, Hugh & Crye, Lettie Gooch, DURKL, Warby Parker, Ministry of Supply and Bucketfeet have all opened their doors, making it a true retail destination. It’s safe to say, Shaw is most definitely home to some of the coolest streets in the city.
Summer serves as Senior Research Analyst in the Mid-Atlantic region. She is primarily focused on the Washington, DC market. Summer’s responsibilities include investigating and reporting on market analytics and the production of quarterly statistics and reports for office, retail, and multifamily sectors. She also works to publish special reports and white papers and other specialized thought leadership pieces that highlight market fundamentals.