Mixed-use buildings owners in Arlington are having a hard time finding tenants for their ground-floor retail space, and are now seeking permission from the county to convert the space for other uses.
The Arlington County Board received three requests- from office buildings in Rosslyn, Ballston, and Le Meridien Hotel in Rosslyn- which it will consider on Saturday meeting.
“It is definitely a trend,” said Michael Smith, director of real estate at Bethesda-based retail strategy firm Streetsense. “We are at a point in time where we have a lot of retail space and a decreasing number of prospective tenants to fill those spaces.”
In the case of Ballston Pointe building at 4300 Wilson Blvd, the owner is asking permission to convert the 2,132 square-foot ground floor space into a gym for the residents and office space. Meanwhile, Le Meridien hopes to convert its 900 sq.ft retail space into offices, while the 1776 Wilson Blvd building in Rosslyn wants to fill its 22,828 sq. ft of unused space with “retail equivalent” tenants like education organizations.
In a report to the Board, the County staff wrote that the Meridien vacancy is “due to a combination of design and location factors the site has not been a successful retail space” and another report said that 1776 Wilson “cited difficulty retaining leases with tenants that meet the definition of retail.”
Streetsense’s Smith said that while municipalities are trying to encourage ground floor retail environments to create a sense of place, the reality is that there is only so much of it going around.
He cited millennials’ tendency for prioritizing experience over things as a contributing factor to why retail has been declining over the last decade- leaving fewer prospective tenants. Another reason is that not all spaces or streets are ideal areas to attract shoppers.
For years, the County Board has approved retail space to turned into other alternatives such as medical offices. The members have also voted for the conversion of office space back to retail space, though the process is at times fraught.
A recent auction by East Falls Church bookstore, One More Page, created a discussion on whether the county has an obligation to also help ground floor retailers weather rising rents.
According to Smith, government-led programs or economic incentives can only make sense “if the numbers pan out and it’s win-win for everyone.”