Old Town North and the Potomac River Groundbreaking Redevelopments
Massive Redevelopment of Old Town Alexandria Infrastructure and previous vacant land housing eye sores on the horizon
Summary: The evolving infrastructure of the Potomac River, along with the redevelopment of previously vacant eye-sore sites along the waterfront into large mixed-use communities, is set to transform the Old Town North area into a significantly more desirable location. These redevelopments will not only remove the previous monstrosities, but create new infrastructure to connect and add new parks along the Potomac River, bring in a large amount of new jobs, and add retail and arts-centered areas that will be highly desirable to live near. This will drive up property values and rental rates over time as these changes to Old Town North materialize. Recognizing this trend, several developers are investing in the area now, focusing on new construction apartments and ground-floor retail, which will further enhance the neighborhood's appeal. Many of these development plans prioritize apartment buildings, as most townhome sites have already been built out. This creates a prime opportunity to acquire a townhome or single family, particularly one with unique and highly desirable features, as the influx of increased supply of apartment units is unlikely to negatively impact future appreciation or rental growth for townhome and single-family assets.
Old Town Alexandria
Old Town Alexandria, the downtown of the city of Alexandria, is a historic district city founded in 1749 and remains to this day one of the most desirable areas for D.C. Metro residents to live in due to its breathtaking aesthetics, an abundance of diverse, high-quality retailers, and a plethora of employers in the city and nearby. Old Town has two metro stops, Route 1 and the George Washington Parkway running straight through the city, easy access to I-495 / I-295 and the Ronald Reagan National Airport, 15-20 minute drive to the United States Capitol, 10-15 minutes drive to Amazon’s new HQ2 coming in 2030, and 5-10 minutes drive to Potomac Yards which is currently seeing massive development including Virginia Tech’s new Technology Campus coming in 2025.
Old Town is a major tourist attraction for people visiting the area, with lots of historic museums, monuments, and tourism services. Although many of the tourism services include water activities since the city borders the Potomac River, such as the Tall Ship Providence tour, Water Taxi to DC, Yacht Charters, and kayaking, one major downside to the city has been the pollution of the Potomac River near Old Town in particular. Not only is it unsafe to swim or fish in the water near Old Town currently, it is actually illegal for health concerns. The city has been taking massive action to correct this issue with there River Renew program started in 2017, finishing the Hazel tunnel in May of 2024, a 2.2 mile long, 12 ft wide drainage and filtration tunnel running under the city to drain millions of gallons of sludge out of the Potomac every year. The city has now affirmed they believe the Potomac River near Old Town will be swimmable and fishable by 2040 given this recent accomplishment. The economic impact of this, according to Karen Pallansch, the CEO of Alexandria Renew, would be $130 billion. This will help create long-term value for property values and rents due to the economic impact, and the added amenities to all those living near the river. It will certainly continue to add to Old Town’s tourism and thus income for Airbnb owners since tourists will have more fun activities to do, especially from new businesses that will take advantage of the new ability to have water sports in the city. Old Town Alexandria is one of the only areas in the entire DC metro area that has lenient restrictions on Airbnb, allowing owners to Airbnb their property without living in it. Developers are getting ahead of this future trend by building out one of the only undeveloped areas in all of Old Town, particularly two currently vacant sites right along the waterfront in Old Town North
From Monstrosity to a New 2.5M Square Foot Waterfront Mixed-Use Community
In late 2020, Hilco Redevelopment Partners (HRP) bought the Potomac River Generating Station, which had been decommissioned in 2012. Since then, HRP, who specializes in these types of complex redevelopment projects, has been working through the approval process for their building plans and zoning changes, and to get the site back up to code given it’s prior use and long held vacant status. Phase 1 of the development is currently in stage 2, meaning it passed approvals for initial site design in stage 1, and is now working through the larger community impact of the project such as traffic and stormwater management. Once all phases are fully approved, which the city seems to be supportive of, the former overgrown eye-sore will be replaced with a 2.5M square foot mixed use development of retail, office, arts, and residential space, consisting of either 1.5M square feet of commercial and 1M square feet of residential, or 500K square feet of commercial and 2M square feet of residential. The development will also include 14 acres of open green space, parks, and trails. The development is expected to create +/- 2,000 new permanent jobs, +/- 1,100 construction jobs, +/- 35M increase in tax revenue for the city during construction, and 12-15M increase in tax revenue annually after completion.
Phase 1 of the project, which will consist of 1.15M square feet of the development, and is expected to be executed by 2029 given the rest of the approval and abatement process goes according to plan. This will be an important development to watch unfold as it moves in tandem with the transforming Potomac River, together significantly changing the Old Town North sub-market. The Potomac River Generating Station is just one of several major developments happening in the immediate Old Town North area, most notably a very similar development with a vacant warehouse right along the water, Robinson Terminal North.
Source Hilco Redevelopment Partners: https://www.laigw.org/wp-content/uploads/2024/02/2024.01.26-LAI-presentation.pdf
Source AlexRenew:
Source River Renew:
https://wwema.org/wp-content/uploads/2016/05/Renewing-the-Water-Industry-Karen-Pallansch.pdf
Vacant Warehouse Turning into 223,000 Square Feet of New Development, and Connecting Founders and Oronoco Bay Parks
Since acquiring the vacant Robinson Terminal North warehouse in 2015, Rooney Properties has been pitching different development plans for the site to transform it from an eye sore on prime Old Town North waterfront property, into a new mixed-use community. With the Hazel tunnel we discussed earlier that is helping clean the Potomac finally finished directly under the site, the project is now expected to receive final approvals in early 2025 for delivery around 2028-2029 for 223,000 square feet of residential and retail development. Rooney plans to put three restaurants under the multifamily development, and finally connect Founders and Oronoco Bay Park, which will be a phenomenal added value to the area aesthetically, functionally, and convenience-wise through adding more nearby restaurants for residents in Old Town North which is a bit further from all of the options available on King Street.
What’s currently there:
What’s coming:
Other Redevelopments in Old Town North Coming Soon
There are three other large developments occurring right now directly in between Robinson Terminal North and the Potomac Generating Station. Developers are aware of the changing infrastructure in the river and long-awaited development coming to these vacant monstrosities in Old Town North and are getting ahead of the future value increases by developing projects nearby for long-term holds, adding more needed retail to the neighborhood, but focusing on residential development due to the expected rising rents in the transitioning area.
Montgomery Center - Located at 312 Montgomery Street in Old Town North, this 1970’s strip mall was approved in April of 2023 by City Council to be converted to a 350,000 square foot mixed-use development, including 25,000 square feet of ground floor retail and 13,300 square feet of performance arts being developed by Carr Companies.
Tidelock - Located at 1033 N. Fairfax Street in Old Town North, Tidelock will convert a 1980’s office building into a new vibrant mixed-use community consisting of 234 residential units, 6,500 square feet of retail space, and 5,000 square feet of arts space including a Levine Music. Tidelock is being developed by Community Three and Whitaker Investment Corp.
901 N Pitt Street - Carr Properties is developing this currently vacant office building into more than 250 apartments, with 7,000 square feet of ground-floor retail space, 15,800 square feet of outdoor space, and a performing arts venue. The project is expected to be completed by 2026.
Conclusion: The changing infrastructure of the Potomac River combined with the redevelopment of vacant eye sores along the waterfront will change the Old Town North area into a much more desirable area over time, increasing home values and rents. Other developers seeing this trend are deploying capital into the Old Town North area to build new construction apartments and ground-floor retail, further increasing the aesthetic and overall neighborhood appeal. Many of these developer pipelines call for building out more apartments in the area since many areas to build townhomes and single families on are already built out. This could make a great opportunity to buy a townhome or single-family asset, especially one in a unique location / with unique and highly desirable characteristics that increased developer supply of apartment units will not have a negative impact in terms of future appreciation / rent growth.
Source Robinson Terminal North:
Source: Montgomery
https://www.alexandriava.gov/housing/affordable-housing-projects-and-partners
https://www.alexandriava.gov/sites/default/files/2023-06/MPA202300001.pdf
901 N Pitt
https://alexandrialivingmagazine.com/news/new-apartments-rising-in-old-town-north/
Tidelock
https://www.build-tidelock.com/
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