Bacon's Rebellion

Democracy Thrives in Sunlight

The Market Speaks, and It Likes Reston Town Center

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by

James A. Bacon
in

reston_town_center

Reston Town Center got a half-century head start in creating the kind of community where enterprises want to do business in the 21st-century knowledge economy. The original developers were planning for and building walkable, mixed-use development before walkable, mixed-use development was cool. And today property owners are reaping the benefits.

According to Cushman/Wakefield, offices in Reston Town Center are near full occupancy and command among the highest rents in Northern Virginia. The business district’s big competitive advantage? A strong amenity base. Summarizes Virginia Business:

The report notes that in addition to 2.8 million square feet of office space, Reston Town Center is home to 50 retail shops, 30 restaurants and three residential high-rise projects. Even with a suburban location 20 miles outside of Washington, D.C., and a lack of Metro accessibility until at least 2018, the center’s density, mixed-uses and walkability give the center an urban feel that attracts tenants and residents.

Reston achieves high occupancy despite the fact that tenants pay a 30% rent premium to be there. The situation in Reston stands in marked contrast to the other major business centers, Tysons and the Ballston-Rosslyn corridor. Spurred by the arrival of the Metro Silver Line, Tysons is desperately trying to reinvent itself from a case study in suburban sprawl into a paragon of Transit Oriented Development. But the transition to a coherent, walkable place will take place over years, if not decades. Property owners in Arlington’s Ballston-Rosslyn corridor have Reston-style amenities and have been demanding Reston-style rents but have been afflicted by the departure of large government tenants.

Bacon’s bottom line: Could the marketplace be speaking any more clearly? People are demanding walkable urbanism. It doesn’t have to be located in the core of the metropolitan area. It doesn’t even have to have Metro service. People like compact, walkable, mixed-use development. Developers who deliver that product will make money. Localities that foster its development will see their tax base grow.

— JAB

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7 responses to “The Market Speaks, and It Likes Reston Town Center”

  1. DonR Avatar
    DonR

    Craaaack! Bacon hits one out of the park!

    RTC also has plenty of free parking and sits on a grid of streets that allows for many ways in and out.

    But you haven’t answered the big question … RTC is an absolute economic winner for the landowners. So, why are people still building isolated, disconnected office buildings surrounded by sprawling open air parking lots for as far as the eye can see?

    Is the free market failing in Northern Virginia real estate? Has Adam Smith’s invisible hand sprained its wrist?

    1. James A. Bacon Avatar
      James A. Bacon

      “Why are people still building isolated, disconnected office buildings surrounded by sprawling open air parking lots for as far as the eye can see?”

      Zoning codes?
      Mandated parking requirements?
      An unwillingness to invest in complete streets?

  2. jwgilley Avatar
    jwgilley

    The Reston Town Center now has 3 residential high rise buildings over 20 stories tall – condos. And it also has three others over 14 stories tall and four others 15-20 stories tall either under construction or approved by the county. 2 twenty story residential buildings (apartments) are ready to be constructed by Boston Properties a primary land owner and builder in the Town Center. Boston Properties has more than $2 billion invested in the town center with more to come as they own vacant blocks of land close to the Reston Metro-rail station which will be completed in about 4 years. Now the RTC has more than 5,000 residences with expectation of 10,000+ in another ten years.
    And it is just not growth in population for many businesses in NoVa are in 20-30 year old stick constructed office building but are now looking for state of the art facilities and consolidation of operations. When they start looking around one factor in the selection process is being on the metro rail line and close to Dulles Airport. One firm with 200 employees in 4, 30 year old buildings in another Fairfax town just consolidated and moved to Reston near the current metro station. Change is coming and smart planning is definitely better than ole planning.
    And having worked on the construction of Dulles Airport as an engineer in 1960 I have seen a lot of change and know that more is to come. (Reston was a farm that produced the basics of Virginia Gentlemen in 1960.)

  3. TooManyTaxes Avatar
    TooManyTaxes

    RTC has one big advantage over Tysons. Reston started as largely empty land. Thus, the developer was able to construct a grid of streets from scratch. Hence, it is more like the RB Corridor in Arlington than Tysons. Its problem is it is not as close to the Silver Line as are many properties in the Corridor and in Tysons. However, there is a strong push to add density to Reston that is comparable to Tysons in locations that are not as walkable as those in Tysons with similar density. Pretending in Reston can be dangerous as RTC and the surrounding area could be crushed by traffic generated by allowing TOD density outside true TOD areas.

    If the County sticks with its TOD definition, Reston will continue to succeed. It may need to move to paid parking in future years, however.

  4. jwgilley Avatar
    jwgilley

    Tysons may be very slow in developing. It will take another explosion of federal spending like we experienced in the first decade of the 21st century for Tysons to even make it. And that is going to be a difficult challenge indeed. Right now there is nothing in Tysons to merit the metro going through with four stations and eventually it will develop but when is the question…not in the next 20-30 years.
    The original plan for metro to Dulles was to follow the Dulles Toll Road but the Fairfax supervisors chose to dog log it through the south side of Tysons rather than following a straight line up the DTR and that added some $6-$8 billion in cost. It was justified on the theory that in that the long term development would be worth it. But who knows if America will be willing to borrow another ten trillion dollars from China etc. so that we can have Tysons developed. Who knows for sure?

    1. TooManyTaxes Avatar
      TooManyTaxes

      I think your comments on Tysons are very true in content. Dulles Rail was hijacked to provide financial windfalls to well-connected landowners who made big political contributions. The original thought was to have two stations on the Tysons side of the DTR/DAR, with circulators into Tysons. But that would not likely give sufficient density to the landowners. Moreover, it was very clear rail to Dulles alone would not qualify for federal funding. But putting rail through Tysons, it was hoped the added density would shape the analysis so that federal funding would be available, even though the construction costs would skyrocket and the loop through Tysons would make the rail trip from D.C. to Dulles much slower. Of course, we all know that even with moving rail through Tysons, the cost/benefit ratio was insufficient to obtain federal funding even though John Warner had the project grandfathered under the old, weaker standards.

      I think Tysons will develop over time. It’s going to be a very expensive place to live or operate a business. But, presumably, access to rail, roads and amenities will provide incentives for people to live and operate businesses in Tysons. Development at Tysons will both surge and retreat with the economy. Whether the results justify the high public and landowner expenditures will be learned some 40 years from now.

      I will go to my grave believing a grand jury should have been empaneled for what went on at Tysons. It makes the McDonnells and the Mark Warner/McAuliffe offers to Senator Puckett look like kindergarten corruption. Exhibit 1 – Gerry Connolly, as both Chairman of the BoS and a SAIC vp, votes to add an extra station (minimum $50 M) to the project and the station is located right in front of SAIC’s HQ building on Route 7. There is also good evidence of how the powers that be allowed some landowners to purchase their way out of the Phase 1 tax district, even though they obtained added density, while other landowners, who did not pay, were included in the tax district even though they would not receive added density. I read the papers that were in the office of the late Chris Walker. Both state and local government in Virginia/Fairfax County are as corrupt as Chicago, New Orleans or New Jersey.

  5. Acbar Avatar
    Acbar

    Nice front page article about the attractiveness (and economic success) of walkable Frederick, MD — in the WaPo the is morning.

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