Question: Do you think Pierce condos in Rosslyn will be able to sell for the prices they’re advertising?
Answer: A few months ago, local developer Penzance released details on their upcoming Highlands development that includes three luxury residential buildings, one of which will be a 27-story condo building called Pierce. Here’s a summary of what we know:
- Large Floor Plans: 104 units ranging from a 1,270sqft 1BR+Den to a 3BR with over 2,400sqft
- Larger Prices: Starting at $900k and increasing to over $3M
- Luxury Finishes: Thermador appliances, hardwood throughout, Snaidero cabinets, floor-to-ceiling windows, some direct-access elevators and other luxury touches
- Top Amenities: 24hr staff, rooftop pool, two-story gym, club room, to name a few
Courtesy of Mayhood at PierceVA.com
Is There Anything Else Like It?
It seems that Penzance is modeling its approach after Turnberry Tower, the iconic all-glass blue building a block from the Rosslyn Metro. Both buildings’ smallest units are 1BR+Den with about 1,300sqft, they have similar high-end finishes, many units with direct-access elevators, and both have luxury amenities.
Demand and prices at Turnberry have increased significantly over the last 18-24 months, which is a good sign for Penzance.
Meeting New Demand
There is a significant, relatively new, demand in Arlington for large condos to satisfy Baby Boomers downsizing from big suburban homes around the DC Metro. Over the last 20 years of condo development in Arlington, most floor plans have been 1BR-2BR, ranging from 700-1,000sqft. To find larger floor plans, buyers are mostly left with buildings constructed in the 70s and 80s, so there is currently an underserved market for newer condos with large floor plans.
For example, 2000 Clarendon, a condo building in Courthouse set to deliver next year, originally planned six 2BR+Den units of ~1,400 and ~1,700sqft. They had so much interest that they added two more. Their current waitlist for the 2BR+Den units has over 20 people on it. However, the price of 2000 Clarendon units are about half what similar units at Pierce will cost.
Will People Pay These Prices?
- 1BR+Den with 1,270+sqft start at $900k (4 units)
- 2BR with 1,320+sqft start at $1.1M (44 units)
- 2BR+Den with 1,953+sqft start at $2M (46 units)
- 3BR with 2,411sqft start at $2.6M (10 units)
- More than half of the units will be $2M+
- More than half of the units will be over $1,000/sqft. Over the last five years, seven Turnberry condos and two Waterview condos have cross the $1,000/sqft mark. DC hits this mark in its premier buildings.
Rosslyn has only begun its transition into a luxury market and Pierce will be a great indicator of where Rosslyn is in the eyes of the market. The sales won’t come overnight, or be without challenges, but the developer can afford to be patient for:
- The down-sizing Baby Boomers that Pierce is suited for can afford to pay a significant premium for the right floor plan and building
- Amazon, Nestle, consulting/law firms, Defense contractors, and tech start-ups are supplying more and more highly-paid Executives to the Arlington housing market
- International money will be drawn to its proximity to DC and Amazon
- Trophy units with direct views of DC and the Potomac River should be in high demand because it’s unlikely that future developments will block those views, something that has had a major impact on many Turnberry owners in the last five years (I wouldn’t be surprised to see some of them move a couple of blocks up the street to reclaim their views)
There are some challenges that will likely slow the pace of sales and maybe even cause them to bring prices down on some units:
- At these prices, buyers will also be looking at similar units in DC’s top addresses in neighborhoods like Georgetown, West End, and The Wharf
- There will be a 7-11, fire station (quiet-exits will help, but won’t convince everybody), and a school (a negative for most, despite the beautiful design) within one block
- Being up the (steep) hill from many of the neighborhood’s top draws including Rosslyn Metro, Key Bridge, Mt Vernon Trail, and new dining options
- Rosslyn still has many elements from its sleepy government office district days and probably 5-10 years from shedding that completely via redevelopment that’s in the pipeline
Pre-sales are scheduled to begin in early 2020, but the building probably won’t be finished and ready for move-in until well into 2021. I don’t think the current market, or even the 2020 market, will be ready to pay these prices for most of the 104 units, but I think by 2021 we’ll see Rosslyn far enough along and Arlington’s market driving forward enough to generate some eye-popping sales for Penzance’s Pierce condos.