Washington Post: Tysons Corner Apartments Coming Quickly, But in Small Doses
April 24, 2011
Housing builders are scouring Tysons Corner for development sites and talking to large landowners about partnering on apartment projects, as banks have shown more willingness to finance rental housing than other types of development.
The interest is alleviating concerns that major landowners would resist building new housing in Tysons, leaving the area an office canyon, albeit a more urban one.
“It’s sort of the perfect storm right now of improving transportation, appropriate housing policy . . . and a large amount of rental housing demand,” Toby S. Bozzuto, president of Greenbelt-based housing developer Bozzuto Development, said of opportunities in Tysons.
Washington has become one of the strongest markets for construction of new apartments in the country, according to researchers, and no other type of development is easier for developers to finance.
Some companies are already getting started. Avalon Bay, the Arlington-based owner of more than 50,000 apartments in 10 states, is at work on a new 350-unit apartment building on Westpark Drive, which will be integrated into the Park Crest development that features a Harris Teeter grocery store.
The result, Bozzuto said, is that many of the first new buildings to rise in Tysons are likely to be apartment buildings, not offices. Bozzuto said his company, which has partnered with Pritzker Realty Group, a Chicago investment firm, on a $75 million joint venture for apartment investments, is considering multiple opportunities in Tysons.
Another company has proposed redeveloping the Commons, a garden style apartment complex on 12 acres along Anderson Road near the Tysons East Metro Station, into a higher density neighborhood of as many as seven new apartment buildings. As proposed, it would be built in phases and eventually total more than 2,500 units.
Grant Montgomery, an apartment researcher at Delta Associates, said a number of companies are trying to line up projects to finish by the time Metro trains begin pulling into Tysons in 2013. “That’s when I think people are really hoping to hit the market,” he said.
All the interest has left Fairfax County officials, who would like to see Tysons transformed into a lively, mixed-used community, somewhat relieved. To ensure that office buildings would not overwhelm Tysons, Fairfax Country required that 35 percent of many new projects be composed of housing.
“We’re much less worried, at least I am, about getting the businesses there. . . . What we really need are the people,” said Barbara Byron, director of the Fairfax County Office of Community Revitalization and Reinvestment. “So it’s kind of exciting that the economy is in such a way that the housing has to come first.”
But not all the plans are finding support. According to developers such as Thomas Fleury of Cityline Partners, some of the boldest proposals by landowners — for towering residential high-rises atop the coming Metro stations — have not drawn the same interest from developers, potentially setting back plans for the urban Tysons envisioned by the plan.
Fleury points to the fact that none of the developers behind the more than half a dozen rezoning plans that have been submitted to the county has announced a housing partner for high-rise residential buildings. “My view of it is that there’s a lot of money out there, that’s a fact. The institutions, the REITs, they got lots of money and they’d like to be at Tysons, but boy, everyone is having a hard time making high-rise work [financially] right now.”
Aaron Georgelas, managing partner of the Georgelas Group, is planning a “demonstration project” development for Tysons that could set the bar for others. He plans two 25-story apartment buildings of around 400 units each, and has been considering partners. Part of the problem, Georgelas said, is the cost of building taller buildings will require high-rise developers to charge higher rents than Tysons has ever seen. But he said Metro should make those rents possible.
“We believe the market is there for high-rise,” he said. “Everything we’re doing is very proximate to the Metro.”