Monday, December 29, 2008

Inauguration Invasion a Bust for Many

Washington DC inauguration parage route, Pennsylvania Avenue real estate
Plenty of media outlets have reported on the surplus of inauguration rental inventory - the hoards of property owners whose dreams of cashing in on the inaugural frenzy while (happily) fleeing DC for anywhere else have slowly faded. A storied few cashed in big, and hoteliers and retailers aren't complaining, but for many local condo owners and apartment managers, the occasion has been more bust than boom.

Despite the three million or so people set to descend on the Capitol during the third week of January, aspirants posted more than 1400 ads on the "Sublets & Temporary" housing section of Craigslist for Washington DC area - and that's just today. Gone are the $15,000 house rentals in the 'burbs, replaced by $500 furnished sublets in Dupont Circle, some of which have received not a single inquiry.
And apartment owners seeking to draw “change”-frenzied clientèle have had notably less success than their hotel competitors. Developers like Broadway Development, which is seeking to fill the hundreds of Inauguration Day parade route real estate, commercial property for saleunoccupied units of their Senate Square project at 201 I Street, NE, have largely been unsuccessful at converting the Obama faithful into short-term tenants.

“We started advertising actively about a week after the election,” says Meredith Giantsos, a sales associate for the 432-unit development. “What we’re offering is a one-bedroom with den for $4,000 or two-bedroom for $5,000 – and that’s a flat rate… We haven’t really put a cap on [the number of units available for the inauguration] because we are a new building and have a quite a bit of availability.” The pair of apartment towers began leasing earlier this year after an aborted condo pitch, but having leased a little more than a third to full-time tenants, have only been able to find inaugural occupants for 6 of the units.

But the opposite problem awaits building owners whose units are leased: tenants subleasing their apartments create potential hazards for building owners and managers, many of whom have issued notices to tenants over proper subleasing procedures. Keener-Squire Properties’ Chastleton building at 1701 16th Street, NW, has posted a list of penalties for residents who sublease from January 17th to 25th. Those residents who fail to notify the management of guests (anyone “who will be residing in a unit for more than 12 hours”) or of sublessees, by January 15th, will be hit with a $500 per guest/per day fine. “The [Chastleton Cooperative] Board would like to thank you for your cooperation during this historic occasion,” says the memorandum in conclusion.

Such special precautions and selective rule bending are especially in play along developments that front along Pennsylvania Avenue’s presidential parade route. One such building, the Lawrence Ruben Company’s aptly-named The Pennsylvania, at 601 Pennsylvania Avenue, NW, has capped the amount of party-goers it will allow to view the procession from its rooftop. The mixed-use development will split a total of 200 tickets between the building’s residents and commercial tenants – thereby insuring that even condo owners will be prevented from having more than one than guest in the house once January 20th rolls around.
"This is a really exciting opportunity. I'm glad I can watch the inauguration without having to wade through the crowds,” says Pennsylvania resident Colin Samples. “On the other hand, it's going to be a nightmare to get around down here, and I'm a bit disappointed about the maximum of two tickets."

Samples had been intending to watch the parade along with his neighbors, but will now instead watch what little he can from his east-facing balcony, and give up the ticket to a neighbor with children. The Pennsylvania's management has informed residents that the ticketing system is the result of strictly enforced District fire code regulations and, additionally, that their names have been submitted to the Secret Service – a norm for buildings facing on the fabled Capitol to White House route – which will be personally checking ID on the day of the event. “[I’m] still a bit disappointed,” says Samples, “but I understand their reasons for doing so.” A commendable attitude indeed, when DC residents are now more likely to be strip-searched than rewarded for their good choice of real estate.

Washington DC commercial real estate news


Anonymous said...

I'm not too surprised--a lot of the money and attendance figures being thrown around seemed like media hype.

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