If you’re a company leader looking for office space in 2023, the landscape looks a lot different than it did in 2019.
The hot neighborhoods are struggling for tenants and former duds are pulling contracts by touting the lack of commute for employees. Some, like Georgetown, are still pulling in the tourists they always have, while also attracting founders who come straight from the eponymous university or are looking for a neighborhood with amenities — so much so that the neighborhood actually gained over 50 new leases and businesses in the area this year, rather than losing them.
As downtown pushes forward on redevelopment plans in an attempt to get workers back, Georgetown is still attracting founders. So, we asked: Can the new Downtown Action Plan learn anything from one of the city’s most sought-after neighborhoods?
It’s worth noting that Georgetown has some assets that other neighborhoods don’t. It’s a traditionally white, wealthy neighborhood with historical ties and a tourism draw — meaning the local government wants it to succeed in an advantage that other neighborhoods don’t see. But that doesn’t mean it’s not hard at work trying to build a place where people want to come, either.
Philippe Lanier is the principal of EastBanc, a commercial real estate developer that specializes in “urban revitalization” with operations in DC and Portugal. EastBanc has been working in Georgetown since the mid-1990s and currently owns 21 properties that house about 45 tenants, including the Georgetown Park Mall.
To Lanier, Georgetown is one of the nicest communities of its type in the US, with strong historic ties, connections to the surrounding states and plenty of things to do in a day. As a result (and not forgetting that it’s wealthy), it’s a place that’s continued to grow.
“Urban centers across America following COVID are going through a struggle, particularly those markets that rely on the office workers to populate the area and provide the foot traffic to support the businesses,” Lanier told Technical.ly. “So as downtown DC gets worse, Georgetown gets better.”
Georgetown BID Economic Development Director Faith Broderick agrees that the community boasts many assets, including a dense residential base, plenty of retailers, the waterfront, parks, walkability and proximity to two local universities. In 2023, she said, the neighborhood has seen 35 new businesses opened and another 20 that signed leases in the area.
There are also three new hotels in development, adding about 400 hotel rooms, plus two office buildings converting into residential units bringing approximately 200 apartments to Thomas Jefferson Street.
“We’re not this unicorn in terms of our recovery — some of our older office spaces, they are converting as well,” Broderick said. “But I think what that’s done is it’s obviously going to add more residential density, which is great for the neighborhood just in terms of the overall feel and energy on the street. But I also think it changes the supply and demand of the amount of office space that we have.”
Included in Georgetown’s assets, Broderick said, are the coffee shops, restaurants, retailers and other attractions where people can mingle and have a full day. For employees coming back to work, that’s more attractive than spending their time in an office park.
But she said it’s also aided by its location between two universities that help drive foot traffic. A lot of entrepreneurs start at Georgetown University and stay in the area. If they don’t do that, they at the very least start in the neighborhood, scale and create a pipeline or roadmap for startups — like Sweetgreen and Framebridge.
“We have a bunch of folks who are graduating, who are entrepreneurs, who have maybe tested the corporate world through internships or what have you all being in DC and they want to put their flag down. And they’re doing it locally,” Broderick said.
The pandemic impact
Another secret to Georgetown’s current success, Lanier said, is the fact that in pandemic times, it didn’t suffer the same way some other neighborhoods did. While DC was inside in 2020 and 2021, folks enjoyed strolling through the outdoor mall — considered safer than indoor gatherings (David Simnick, the founder of Soapbox, continued to go to the office during this time and noticed the same trend). Prior to that time, Lanier said the area was struggling in retail, as students were primarily shopping online. But that trend reversed, and now the area has some of the most predictable daytime street traffic around.
By the numbers, it’s not quite as pretty of a story. The area did lose 65 tenants in 2020, Broderick said, and missed out on companies that would have wanted office space but instead switched to remote work. Some also cut their physical footprints down while others opted to move to Virginia or Maryland, where it was less expensive.
Broderick also noted that while the neighborhood is staying afloat and even growing, it’s not attracting large tenants that need over 10,000 square feet. Largely, she said, it’s those seeking under 5,000 square feet, in need of a space to collaborate in person — and sometimes, Georgetown just happens to fit the bill.
“When folks are looking for office space, it’s really, I think, space first, neighborhood second,” Broderick said.
Whether or not neighborhoods in DC, especially downtown, can learn from or even attempt to replicate Georgetown’s assets is up for debate, as every neighborhood has its own draws, cons and culture. But Lanier does think places like Old Town Alexandria, Dupont Circle and West End have similar traits and can receive tangential benefits of Georgetown’s success by proximity.
Simnick, who’s had an office in the area for the past five years, said he initially was looking for a “really cool spot” when he first selected his Georgetown space. The company is now partially remote, but he loves coming to the office every day and taking advantage of the neighborhood’s amenities (including all the food and coffee spots to have meetings). What he thinks Georgetown does well, he said, is remembering the history — balancing the cobblestones and historical buildings with new development and “great places for humans to thrive.”
“Whether that’s a working environment, whether that’s leisure, whether that’s cafes, restaurants, bars, this is just such a fun place and there’s something for everyone here,” Simnick said.
As the neighborhood moves forward, he’s most excited to see how it will embrace a deeper commitment to diversity in 2023 development and beyond. He wants to see it move beyond the stereotypes of the past and into a community he wants to live in. There’s lots of not-so-pretty history in the neighborhood he noted, of continued segregation, slavery and gentrification, and he wants to see that change.
“It is wonderful to see all walks of life walking and enjoying Georgetown, and I’d love to see more of that,” Simnick said.
Although he thinks hybrid and remote work is here to stay, Lanier is hopeful that leaders will still want a space for people to show up in person from time to time and learn from each other. He thinks downtown will return, too, but believes it’s going to take a long time – especially adding back development like restaurants and shops and other outside-of-office amenities. And he’s predicting it will require government incentives, as he doesn’t have very high hopes for office-to-residential conversion in that area.
Right now, though, he said business leaders don’t have the luxury of waiting for all of that, which makes Georgetown attractive to many.
“It’s those people that are in that moment where they’re saying: ‘I do need to make a decision, I do need to understand where my workforce is going to enjoy working,'” Lanier said. “Those are the people I think that are going to look at Georgetown and say it’s just a much easier decision.”
Still, as Broderick said, what happens downtown and in the Golden Triangle area doesn’t happen in a vacuum. She’d love to see more folks returning to the office and signing leases in that area, as well, to help build the overall development pipeline. But she also has high hopes for the growth of Georgetown, no matter what happens.
“I do think that we see a lot of people who love Georgetown, they’re committed to Georgetown, their office will stay in Georgetown,” Broderick said.
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