- The Washington Times - Tuesday, May 31, 2005

Parc Dulles apartments is the latest example of how the Washington area’s real estate market is changing to include more apartment and condominium buildings with stylish designs.

It is a departure from the early 1990s, when the site of the new complex most likely would have been snapped up by developers of commercial office space.

The 393-unit development is being built with a Charleston House architecture, a theater and swimming pool on a site in Loudoun County near Dulles Town Center.

“This is the top-end thing we’ve done,” said Clark Green, marketing director for Lerner Corp., one of the Washington area’s biggest apartment developers.

The design of the complex is supposed to be a major selling point.

“I think that’s the name of the game,” Mr. Green said. “You have to stay ahead of the competition and this is the fastest-growing county in the United States.”

The apartment vacancy rate in the Washington area is 3.1 percent, less than half the 6.6 percent national average, according to Delta Associates, a real estate research firm. Lease rates are running about 31 percent higher than the national average.

Condominium prices also outpace the rest of the nation. The median price for a condominium is more than $274,000 in the Washington area compared with the nearly $224,000 national average.

As a result, developers are finding bigger profits in apartments and condominiums than even six years ago, when home prices in the Washington area were half as high as now.

“It’s a much hotter market right now for residential than commercial development,” said Jay Fisette, chairman of the Arlington County Board of Supervisors. “It’s just such a hot market, the minute you announce you’re going to build it, it’s leased.”

Developers say the high prices buyers are willing to pay mean the square-box buildings used for most condominium and apartment buildings a few years ago are giving way to stylish architecture and more amenities, such as billiard rooms and massage parlors.

“The bar has risen on design throughout most of the condo projects I’ve seen, which I think is a good thing for the city,” said Jim LaRoe, development services director for Spaulding & Slye Colliers, a Washington commercial real estate firm.

Developers also are building or converting the residential buildings in prime urban settings.

“There are a number of sites throughout Washington that would have been looked at by any developer as a traditional office market,” Mr. LaRoe said. “They would look at it now and say it should be a mix of office and residential. That is a change.”

Examples include the Ellington apartments at 13th and U streets, Strathmore Park condominiums near the Grosvenor Metro station, Lofts 590 apartments opening Saturday in Arlington and the Remington apartments at Dulles Town Center.

The Cooper Lewis Condos at 14th and P streets NW, which is nearing completion in Logan Circle, is replacing older commercial buildings. Six of the most expensive units sold within the first month for prices ranging from $800,000 to $1.3 million.

“As the seemingly endless building boom shows, the population of renters and buyers is eager to live in places that offer the convenience, security, urban and transit connections and view they have come to expect from city-style living,” said Marc Fairbrother, vice president of Baltimore architectural and engineering firm RTKL Associates.

Realtors say the number of renters is increasing as rising home values price them out of the market, but condominium sales are rising the fastest.

Sales of existing condos and co-ops reached their ninth consecutive annual record in 2004, according to the National Association of Realtors. About 970,000 existing condos and co-ops were sold nationwide last year, up 8 percent from the previous record of 898,000 in 2003.

Traditionally, architectural fees make up 2 percent of a project cost. Well-known architects can cost more, but developers say the investment can be worthwhile if it attracts “high-end” residents.

“It’s a radical departure,” said Maurice Walters, design architect for Torti Gallas and Partners of Silver Spring, which is designing the Parc Dulles apartments complex. “In the recent past, the things that were built tended to be more formulaic.”

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