Question: Are there any smoke-free condo buildings in Arlington?
Answer: There is overwhelming support amongst condo owners in Arlington and the DC Metro to ban smoking in condo buildings, including within individual units and balconies. The problem is that it requires a two-thirds (or more) vote in all existing condo buildings to change the by-laws to ban smoking completely and only a handful of buildings have successfully done so.
2000 Clarendon To Be Smoke-Free, LEED Certified
I’d like to recognize The Bush Companies for making 2000 Clarendon, an 87-unit condo building currently under construction in the Courthouse neighborhood, for being the first developer in Arlington to ban smoking outright in the original by-laws. Per the by-laws:
“Smoking is prohibited inside the Condominium building. Smoking is prohibited outside the Condominium building except in designated smoking areas located at least 25 feet from all entries, outdoor air intakes, and operable windows. The no-smoking policy applies to spaces outside the property line used for business purposes.”
In addition to being smoke-free, 2000 Clarendon will also be a LEED Certified “green” building.
There is real demand in the Arlington condo market for smoke-free buildings and there will likely be multiple owners who choose 2000 Clarendon as their home because of the smoking ban. I believe that the decision by The Bush Companies to ban smoking will result in stronger sales and I expect more developers in Arlington and the surrounding DC Metro to follow suit.
On October 15th I’m hosting a panel and info session on smoking bans in existing condo buildings. If you are interested in attending or getting a recording of the meeting, please email me at Eli@EliResidential.com.
2000 Clarendon Sales Update
If you’re in the market for a condo in the Rosslyn-Ballston Corridor and aren’t aware of 2000 Clarendon, it’s because marketing has been very limited and nothing has been entered into the MLS yet (hopefully you saw my column introducing 2000 Clarendon in April). However, demand has been high enough without a full marketing push that over 50% of the units are already under contract.
The shift in demand within the Arlington condo market to larger units with 2+ bedrooms is evident at 2000 Clarendon, with impressive demand for their 2BR and 2BR+Den units and double-digit waiting lists. The 1BR+Den floor plans have been nearly as popular, but 1BR sales have lagged. I expect the 1BRs to move rather quickly once they’re entered into the MLS for broader distribution.
The developer is releasing units for sale by floor and to-date ten of the fourteen floors have been released with floors 9, 11, 13, and 14 yet to be offered. Some units on the upper floors are expected to have direct DC views.
If you’re interested in learning more about available units at 2000 Clarendon or other new condo development in Arlington or the DC Metro, feel free to reach out to me at Eli@EliResidential.com.
Question: Do you
think Pierce condos in Rosslyn will be able to sell for the prices they’re
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:
Floor Plans: 104 units ranging from a 1,270sqft 1BR+Den to a 3BR with over
Prices: Starting at $900k and increasing to over $3M
Finishes: Thermador appliances, hardwood throughout, Snaidero cabinets,
floor-to-ceiling windows, some direct-access elevators and other luxury touches
Amenities: 24hr staff, rooftop pool, two-story gym, club room, to name a
Courtesy of Mayhood at PierceVA.com
Is There Anything Else
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
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
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
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
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.
often should a condo building conduct a Reserve Study?
Answer: In my
opinion, the Reserve Study is the most important planning tool for Condo
Associations because it provides a roadmap for how much money needs to be saved
and what projects the Board should prioritize.
What is a Reserve
A Reserve Study should be done by an engineer who
specializes in condo or apartment buildings. The engineer inspects all of the
common elements like the roof, garage, hallway carpeting, pool, etc to
determine the remaining useful life and major repair schedules for all common systems/elements.
For buildings around here, the cost usually starts around a couple thousand
dollars and goes up from there.
After the inspection is complete, the engineer provides a
report that generally includes:
Summary of the common systems
Maintenance or repair recommendations
Replacement schedule over the next 30 years
Estimated annual cost of repairs and replacement
needs over the next 30 years
Analysis of the Association’s current reserve
balance, annual reserve contribution amounts, and projected annual costs to
determine if the current balance and contributions are enough to support costs
over the next 30 years
How Often Should a
Study Be Done?
Code states that a new Reserve Study should be done at least once every
five years. This will still be the case when the new code becomes effective on
October 1 2019.
The Reserve Study is important for many people including
owners, Board members, management, and buyers.
The financial analysis is critical for the
Treasurer to determine monthly fees and reserve contribution levels
The repair schedule allows the Board to set
priorities for themselves and management to solicit bids for major repair or replacement
Homeowners must provide a copy of the Reserve
Study and current reserve account balance to buyers once they go under
contract. Buyers have the right to cancel a contract within three days of
receiving this information so having an updated Study and sufficient reserve
funds is important.
Buyers should carefully review the Reserve Study
and compare the recommended reserve balance and contribution levels with the
current balance and current-year contributions in the budget.
After completing a new Reserve Study, you may find out there
are insufficient reserve funds and contribution levels. Boards generally have
two options – increase condo fees or issue a special assessment.
If the reserve deficiency is 5+ years out or relatively
small, there’s likely enough time to slowly increase fees until you’re caught
up. However, increasing fees by too much can have a negative
impact on sale prices, so sometimes a one-time special assessment is in the
best interest of the owners. A special assessment may also be your best option
if the money is needed quickly to cover reserve costs in the next few years.
Not only does Virginia Code request Associations to complete
a Reserve Study at least once every five years, it’s good practice for all
stakeholders to have an update Study available for better financial planning
and facility management.
Board of Directors is planning for the 2020 budget and we’d like to get a sense
of the market rates in Arlington, particularly in the Rosslyn-Ballston
Corridor. What are the average condo fees in the Arlington area on a cost per
square foot basis?
Answer: It’s that time of year for most Condo Associations – budget planning time! As a former Condo Board Treasurer, I understand the pressure you’re under to balance responsible spending and reserve contributions with resident expectations of low, stable fees. Let’s take a look at what condo fees are across Arlington…
Condo Fee Rates
Fees are generally set on an annual basis by dividing up the
Association’s total budget, including reserve contributions, by the ownership
percentage assigned to each unit. Ownership percentage is determined by the
builder and can be found in the legal documents you received prior to purchase.
In most cases, it’s determined either by the number of bedrooms or square feet.
On a square foot basis, the average condo fee in Arlington
is $0.54/sqft with a median fee of $0.53/sqft. Along the Rosslyn-Ballston
Corridor the average jumps a bit to $0.57/sqft and the median remains the same.
On a per bedroom basis:
Average R-B Corridor
Not All Fees Created
Before you jump to any conclusions about the relative value
of your condo fee, you need to consider what’s included.
Amenities that require staffing and/or expensive maintenance
like an attended front-desk, on-site management, and pools add significantly to
the budget. The value for those amenities is subjective. Amenities that take up
a significant amount of space within a building like large lobbies, party
rooms, or rooftop gyms take away from the total unit count, thus increasing the
ownership percentage of each unit.
There’s also a wide range of utilities included, or not, in
a condo fee. Some fees include all utilities (water, sewer, trash, gas, and
electricity) while others may only include trash with the rest paid directly by
each owner. Some fees even include internet and cable! These differences can
change your monthly bottom-line between two condos by hundreds of dollars.
Another important consideration when analyzing condo fees is how well they’re being used to fund the reserves (the Association’s savings account for major repair or replacement work) and whether future planned/unplanned building expenses will require a fee increase or special assessment. A well-funded reserve account usually means long-term fee stability and decreased chances of a special assessment. Associations should complete a new Reserve Study every five years to maintain a sufficient reserve balance and healthy building maintenance.
Question: Are there specific buildings or sub-markets in Arlington that were responsible for the jump in condo values in the first half of 2018?
Answer: The most interesting data point that came from last week’s mid-year real estate review was that, for the first time in years, condo prices appreciated significantly from the first half of 2017 (9.1% growth). I received a number of emails from readers asking if this growth occurred across the entire condo market or in specific locations or buildings so this week’s column takes a deeper dive into the 2018 mid-year data for condos in Arlington.
Growth and Demand Increase Across the Market
The good news for condo owners in Arlington is that appreciation and demand increased across all markets in the first half of 2018. In fact, 63 of the 79 measures for appreciation and demand improved (if you’re a homeowner/seller). To test the market, I looked at average price and three demand indicators (days on market, purchase price to asking price ratio, and number of sales) broken out by zip code, building age, and price range. The data compares pricing and demand trends in the first half of each year for all condos sold in Arlington. Cells highlighted in green indicate improvement (for homeowners/sellers) in that category for 2018.
All Eight Zip Codes Appreciated
Demand indicators supported the price growth, with most zip codes seeing a faster pace of sale and buyers negotiate less off original asking prices. For those tracking new construction in Arlington, only 11 of the 98 sales in 22209 were in Key & Nash and it’s important to note that builders do not enter all of their sales into the MLS, so a large percentage of those sales are missing from the data. Note that 22205 is not included because of the lack of volume.
Older Properties Surged
Many older buildings in Northern VA are struggling to recover from their peak pricing from 2005-2007, which has left many owners in a difficult financial position. The strong appreciation seen in condos built before the 1970s will be a much-needed relief for many and proves that Arlingtonians and investors are seeing value in older, less expensive condos compared to their newer, amenity-rich neighbors built in the last 20 years. Check out the huge drop in average days on market for condos built in the 1950s or earlier!
Higher Demand at Every Price Point
Demand picked up the most for less expensive condos, but every price range saw at least two demand indicators increase in the first half of 2018.
If you own a condo in Arlington and would like to take advantage of the recent appreciation of your property, feel free to email me at Eli@EliResidential.com to schedule some time to talk about your options.
I am very excited to share with the readers that the Hyde Park Condominium at 4141 N. Henderson Rd, just a few blocks south of the Ballston Metro, successfully voted to change the by-laws to ban smoking in units and on balconies, as well as the already established ban in common areas!
In July 2016, I wrote an article about banning smoking in condos and the reaction from readers both in the comment section and in email exchanges afterwards clearly showed how many condo owners wanted to ban smoking in their buildings.
It is a challenge that only a few Boards have taken on and none have been successful in the way Hyde Park has.
I’d like to congratulate the Hyde Park Board and its residents on a job well done and hopefully paving the way for many more buildings to ban smoking inside and outside of private units in the near future. I firmly believe that this type of ban in condos will increase property values both near and long term.
I’d like to thank Greg Hunter Esq, a local attorney and the Hyde Park Covenants Chair who led the ban, for agreeing to write a column explaining how they accomplished the ban, lessons learned, and other experiences over the last few years.
Below is what Greg wanted to share with the ARLnow readers. It is not intended to be an official statement from Hyde Park.
Hyde Park Smoking Ban, Greg Hunter Esq.
The owners of the Hyde Park Condominium recently passed a bylaw amendment to ban smoking in every part of the property, including private units and balconies.
With over 300 residential units and several ground-level commercial suites, Hyde Park is the first condominium in Arlington to successfully amend their bylaws to go smoke-free.
With the new bylaw, smoking is now banned in every part of Hyde Park, including outdoor areas, private homes and on balconies. There is a limited and non-transferable right for current unit owners to continue to smoke in their own units (grandfather clause), but not on their balconies.
Why A Bylaw Amendment?
Passing a bylaw amendment was not our original goal.
In an ideal world, everyone could live as they wish; any one of us could, if we so desired, smoke cigarettes or rehearse with our metal band or keep peacocks on the balcony and it wouldn’t bother anyone else.
At Hyde Park however, and I suspect every other condominium in the world, one person’s right to enjoy herself does not allow her to annoy her neighbors. We tried a lot of things to solve the problem without a bylaw amendment, including banning smoking in common areas and improving the ventilation systems, but in the end the only effective option we had was a bylaw amendment.
How Did Hyde Park Get There?
After hearing complaints about smoking for years we took a poll in 2014, asking all residents — owners and renters — to answer a few questions about their attitudes toward smoking.
We put a short poll card in every mail box and got a tremendous response, with over 80% of our residents responding. Our results were interesting — an overwhelming majority of residents reported that they really didn’t like second hand smoke and only a few residents reported having one or more smokers living in their unit, but the only thing a majority would support was a new rule to ban smoking in all common areas; only about 20% of residents supported passing a bylaw at the time.
Since smoking had long since been banned in all of the indoor common areas, we passed a new rule in 2015 to ban smoking in all of the outdoor common areas. “No Smoking” signs went up in the garage and around the property.
At the same time, our engineer and maintenance staff made improvements and repairs to the HVAC system and used a lot of sealants to try and keep air from passing from one unit to another, with little success preventing smoke from traveling between units.
The most important development from those early efforts was educational — nearly everyone at Hyde Park was against having second-hand smoke waft into their unit, but very few of us understood just how many of our neighbors felt the same way until we saw the poll results.
After about a year with the new rule, more and more residents asked about passing a bylaw at each monthly board meeting, so we took another poll in 2016. Knowing that we would need an affirmative vote from more than 66.67% of the total ownership, we only polled unit owners, the people who could actually vote.
Once again we got a tremendous response, with about 60% of resident and non-resident owners returning a poll card; about 80% of the resident owners and 75% of the non-resident owners expressed support for a bylaw. With strong grass-roots support, and little success from anything else we tried, we held several meetings and drafted a bylaw amendment proposal.
Over the winter and spring of 2017, we held public meetings, answered every question we heard and edited our draft amendment to reflect what a majority of the ownership wanted. Our draft amendment went to the Association’s counsel, back to us for review, back to counsel and finally to the Board.
They voted to approve the text of the proposed bylaw amendment and set a voting schedule for later in the year. A package was prepared for every unit owner with a letter from the President of the Association, a copy of the proposed amendment (a “consent form”), and answers to nearly every question we got in our three years of meetings.
The Board gave us 90 days to get the vote in and we managed to get over 68% of the ownership – about 220 units – to sign their forms before New Year’s Eve. From there, the consent forms went to our counsel for review, and within a few days our President was able to file the bylaw amendment with the Arlington County Circuit Court.
Questions And Advice?
Polling is important. Without the poll results many unit owners will not be comfortable with the idea of voting for a bylaw amendment, and without strong support there is no reason to take on all of the work.
It’s not a vote in the traditional sense. The law requires that at least 66.67% of the total ownership sign documents that show their consent to the amendment, and the votes are weighted by each owner’s percentage of the total ownership – this is a property record your neighbors are going to be able to see.
While you have to do what you can to preserve owners’ privacy, there’s no hiding from the results. Eventually any unit owner can know how anyone else voted, pro or con.
It’s also not an election in the traditional sense. There’s no question that smokers are a small minority in Arlington, especially in expensive condominiums.
We live in a county where smoking is illegal in every shop, office, store, restaurant, bar, classroom, theater, museum, bus station, airport, subway train, taxicab and outdoor parks, with little complaint. A strong majority of your ownership is going to support this, and very few people will be against it. T
he real question is whether you can get more than 2/3 of the ownership to sign the paper. It’s really more of a bookkeeping exercise. It’s also important to note that a an abstention or non-vote has the same effect as a “no” vote. 2/3 of the ownership must actually vote “yes” for the bylaw amendment to pass.
To some people, it will look like you’re piling on. To get the votes we needed, we tried everything we could think of. Small groups of supporters set up a table in the lobby several times to try and get a few votes, individual unit owners recruited and cajoled friends and neighbors around the building, personal notes were sent to every unit owner who hadn’t yet voted and more than a few nerves were frayed.
Having done this once it’s clear to all of us at Hyde Park just how burdensome the 66.67% requirement is; if you’re serious about this you’re going to have to do everything you can to get votes in, and some people are going to be perturbed.
There is a generational difference in how people view smoking. We have younger smokers who voted in favor of the amendment because they understand how offensive and toxic second-hand smoke is and they don’t want to impose on their neighbors or deal with anyone else’s smoke.
At the same time, we have older residents who don’t smoke (and non-resident owners who don’t allow their renters to smoke) who grew up in a world where smoking was allowed nearly everywhere and thought the bylaw amendment was a terrible idea.
One of our residents did some research that was very helpful in our efforts. The 2010 Census reflects that the number of Americans who smoke continues to decline and that Arlingtonians smoke at a much lower rate than the national average.
All of the Realtors we spoke with agreed that non-smokers outnumber smokers in the condominium market by an even larger margin, maybe as high as 19 to 1. At the same time, even as the number of rental buildings and condominium communities goes up each year, the number of rental apartments and condominiums where smoking is allowed actually shrinks.
There were approximately 32,000 rental units in Arlington County when we started this process, with about 8,000 of those units in condominiums. As commercial landlords like JBG Smith and Equity continue to ban smoking in their properties the smokers looking for apartments have to rent in condominiums.
And as new condominium communities are either LEED-certified or start out with smoke-free covenants, both renters and condominium buyers who smoke have to look to existing condominium communities rather than new buildings. Smokers may be less than 10% of the people looking to buy or rent a condo in Arlington, but if they can’t rent in commercial properties or buy in new buildings the existing condominiums are going to have more smokers looking to move in.
Hyde Park was the first condominium community in Arlington to ban smoking with a bylaw, but we’re not going to be the last.
Greg, thank you very much for such an informative write-up on the smoking ban. If anybody would like to follow-up with Greg to learn more about his experience over the last 3+ years leading this effort, please reach out to me at Eli@EliResidential.com, and I’d be happy to make an introduction.
I would also encourage other condo owners and Board members to use the comments section to share how smoking bans have been discussed within your communities and whether Hyde Park’s success may help your Board move forward with a similar effort.
Question: Is it true that two-bedroom condos are a better investment than one-bedroom condos?
Answer: If you’re asking this question strictly as an investor, the answer is purely based on the numbers. If you’re buying for yourself, you’ll want to consider appreciation as well as what makes the most sense for your lifestyle. For example, do not spend an extra $150,000 because a two-bedroom will appreciate faster, if you’ll end up using the second room for storage and an occasional guest.
Two-Bedroom Condos Appreciate More than One-Bedrooms Condos
Below is a graph showing appreciation of one and two bedroom condos in Arlington since 2010. To maintain consistency, the data set uses condos built from 2000-2008 limited to one bedroom units with 600-800 sq. ft. and two-bedroom units with 900-1,400 sq. ft.
The average one-bedroom sold for $364,000 in 2010 and is selling for $409,000 in 2017 while the average two-bedroom sold for $529,000 in 2010 and is selling for $638,000 today. If you bought the average one-bedroom in January 2010 with 20% down, you’d have approximately $172,000 in equity today. If you bought the average two-bedroom in January 2010 with 20% down, you’d have approximately $294,000 in equity today by putting an extra ~$33,000 down in 2010.
If You’re An Investor
If you’re an investor, you’re looking at rental income, in addition to appreciation. As I wrote this spring, rental rates have been pretty flat in Arlington, especially along the Rosslyn-Ballston corridor, due to a lot of new rental buildings being built the last 5-10 years.
Based on the average 2010 purchase prices, rental income and a 25% down payment (most common % down for an investor), the average investor along the Rosslyn-Ballston corridor has no cash flow from their investment. The table below does not include maintenance or property management fees and assumes average condo fees, taxes and insurance.
So Why Invest?
Considering that the above monthly cash flow summary does not include maintenance costs, property management fees or vacancy periods where is the value in owning an investment property?
Equity Build-Up: For a one-bedroom, your tenants would have contributed an average of $460/mon over the last 8 years ($44,000) to your equity balance and for a two-bedroom, your tenants contributed an average of $680/mon over the last 8 years ($65,000)
Tax Benefits: Another major benefit of investing are the tax benefits. Being able to deduct expenses like condo fees, tax payments and repairs. As well as depreciate the value of the condo and provide a huge annual financial benefit to off-set the weak monthly cash flow. A one-bedroom investor may be able to deduct about $20,000 per year and a two-bedroom investor about $30,000. Of course, you’ll want to discuss any deductions with your tax professional first.
If you’ve invested in property in other areas of the country, you may be shocked by how little monthly cash flow a condo along the Rosslyn-Ballston corridor produces. A major reason for the lower ROI is the lower risk that comes with investing in Arlington condos. Your downside risk during an economic dip is much lower and the rental market is consistently strong with a large pool of well-qualified renters. It follows the basic economic tenets of risk and return.
If you’re considering buying an investment property, feel free to send me an email at Eli@EliResidential.com to set-up a meeting to go through your investment goals and options.
Question: Do you have any details on the new condo building on Columbia Pike?
Answer: The development of Columbia Pike continues westward with the introduction of a very affordable, brand new condo building by Pillars Development Group. The success of recent residential projects, Columbia Place (condos and some townhouses) and Carver Place (townhouses), along the eastern half of Columbia Pike, signal that this will be a successful project for Pillars, who has developed other local condos like The Berkley in Ballston, The Henry in Alexandria and The Paramount in Reston.
What I’m Tracking
The developers decided to make 25% of the units Jr 1BRs, with just under 500 sq. ft., which hasn’t been a very common product in newer construction so I’m looking forward to seeing how these sell. I think it will be a great secondary residence for buyers who live 90+ minutes away and work nearby, as well as the modern value-based buyer looking for affordability and less space.
Unlike most small studio spaces, they have a separate room to sleep (functional bedroom that doesn’t meet legal bedroom requirements) which makes them much more desirable than studios with one large living/sleeping space. The asking price of these units will range from $250k-$300k with monthly condo fees just under $200.
For reference, only 32 condos have sold in Arlington over the last two years for less than $300,000 and monthly fees under $250. The average construction date of those units was 1964, with none being built in the last ten years.
Affordability and value are the selling points for Trafalgar Flats (ease of pronouncing the name is not) with 700+ sq. ft. 1BR units selling from the mid to upper $300s and 2BR/2BA units starting in the mid 400s.
The monthly condo fees are also a selling point, coming in about 10-15% lower than the average fee/sq. ft. of other Arlington condos, while still including a gym, lobby, outdoor terrace and bike storage. Above average condo fees were a problem for a lot of potential buyers of Rosslyn’s recent Key & Nash project, which is about 50% sold and about three months from completion.
For reference purposes, there have been 308 2BR/2BA condos sold in Arlington over the last two years for less than $500k and fees under $450/mo., but only three were built in the last 10 years. Bottom line… it’s rare to find value like this in Arlington.
There aren’t too many places left inside and around the beltway where you can expect above-market appreciation, but Columbia Pike is one of them, especially the western half now that the eastern section has already seen substantial growth.
At the current pricing and being in the early stages of western Pike development, savvy buyers and investors should pay attention. The property sits just two blocks from the site of the under-development Columbia Pike Village Center, anchored by a Harris Teeter (replacing Food Star), slated to open in 2019. Expect strong ROI from all three options — Jr 1BR, 1BR and 2BR.
From the builder, “We chose to build in this location due to the community’s close proximity to DC and the Pentagon. Arlington County is committed to the revitalization of the Columbia Pike Corridor. We are proud to be amongst the first to offer the opportunity to purchase a new luxury condo in this changing, urban environment.”
The building will have 78 total units with 25% Jr 1BR (under 500 sq. ft.), 25% 2BR/2BA (~1,000 sq. ft.), and 50% 1BR/1BA (over 700 sq. ft.) with prices ranging from mid $200s to mid $500s. Monthly fees will start at $192 for the smallest units and top out at $421 for the largest 2BRs. One of the best parts of buying pre-construction is being able to choose your finishes including cabinets, counters, flooring and tiling. All units come with one underground assigned garage parking space.
If you’d like to discuss Trafalgar Flats as a primary residence, secondary residence or investment please reach out to me at Eli@EliResidential.com or at (703) 539-2529.
Question: I’m the Treasurer at [redacted Condo Association] and we’re working on the 2018 budget. What’s a good way for us to save money in the budget without compromising the health and maintenance of the building?
Answer: As a former Condo Board Treasurer, I feel the pain that this time of year brings, so I’m happy to offer some advice that helped me finding savings while I oversaw the budget and has helped other Associations do the same… review your Master Insurance Policy. I know, it’s not the most exciting answer, but your insurance policy is likely a top three expense on your balance sheet every year and if you haven’t reviewed it lately, there’s a good chance you can cut the cost by 5% or more and probably improve your coverage at the same time.
I’m not an expert in insurance so, I asked Andrew Schlaffer, Vice President at USI Insurance Service’s Community Association Practice (www.USI.com) to provide some details on what Board’s should look for when they do a review of their Master Policy. If you’d like to discuss a review with Andrew directly, you can reach him at 703.205.8764 or Andrew.email@example.com. Take it away Andrew…
Pillars Of Insurance Reviews
Condo insurance reviews require a holistic approach, so it’s important to break the cost into a few distinct categories: insurance premium, deductible expense and out-of-pocket costs. To effectively accomplish long-term savings, all three of these categories need to be considered and addressed with a qualified insurance professional.
Adjust Coverage Responsibly To Save On Premium
Premium is certainly a factor to consider during the insurance selection process; however, available insurance products differ significantly. Coverages and services should be very carefully analyzed and compared. While omitting various coverages will save premium dollars, it might also result in substantially increased costs to the Association for out-of-pocket expenses related to uncovered claims.
It is critical to work with a professional who understands local insurance needs and can adjust your insurance program in a way that maximizes premium savings while maintaining adequate insurance coverage. Some coverages may be required by statute and/or Association documents, so cutting required coverage exposes the board to unwanted risk.
Deductibles Based On Loss History
Associations with strong financials often choose to increase their property deductibles which can provide immediate savings of 2-5%. Deductibles range from $2,500 to $25,000+. When considering deductibles, it is important for the Association to review their loss history and the loss history of comparable buildings in an effort to obtain an accurate estimate for deductible expenses.
The most common strategy employed by Associations seeking lower insurance costs is to shop their carrier. An Association can accomplish this in several ways but generally their appointed broker can offer alternative carriers in an effort to obtain the most competitive rates possible. Make sure your broker has access to all of the competitive markets in order to maximize the likelihood of finding savings.
Secondly, and more importantly, if savings is found, your broker should verify that all required coverages are included to secure the Association’s long-term financial security and lender approval. Additional savings can be realized by a thorough coverage analysis to verify the Association is not being over-insured by paying for coverage it won’t use. We are in a relatively soft insurance market, so an Association can expect savings of 2-5% from a simple review, depending on the number of claims that have occurred during the previous policy period.
To insure cost savings and long-term health of your property, make sure your insurance broker specializes in Condominium or Homeowners Associations. To maximize your savings, the Association, insurance broker and insurance carrier need to work in harmony in an effort to identify and reduce threats to the financial health of the community.
Help Reducing Claims
One of the best ways to keep insurance costs down is to avoid claims altogether. Some examples of how insurance brokers can help reduce claims and the impact claims have on your future premium costs include coverage reviews/benchmarking, claims management services, site inspections, building upgrade recommendations, life safety planning, vendor contract reviews, discrimination/harassment training and hiring/firing best practices.
Andrew, thank you very much for providing your insight. I know from experience how much of an impact an insurance review can have on a condo budget, but also how important the right coverage can be when there’s an unexpected claim. One thing Board’s often overlook when they’re solely focused on price is the quality and speed of service when a claim in filed.
For example, if a pipe bursts and floods the gym and lobby, a Board should be confident that the work orders will be executed quickly so the building can be back on its feet without delay or headache. Unfortunately, most Boards don’t think about this until they’re dealing with it, and it’s too late. I encourage any Board/Treasurer to reach out to Andrew to review their policy. He does fantastic work and USI is a leader in Condo/HOA insurance policies in Northern Virginia. His contact info is:
Question: What’s being built across the street from Turnberry Tower in Rosslyn?
Answer: We don’t see many new condo projects these days in Arlington, developers are going with apartments due to low interest rates and surging rents, so the new Key & Nash condo and townhome project in Rosslyn is a welcome addition to the neighborhood. Over the last five years, we’ve had an underwhelming number of condo deliveries.
Along the Rosslyn-Ballston corridor, the only new condo sales have been Arc 3409 in Virginia Square (converted from a hotel in 2014) and Gaslight Square in Rosslyn (luxury condos).
On Thursday evening, the Key & Nash team hosted an unveiling party on the 23rd floor of 1812 N. Moore (the Monday Properties/Goldman Sachs building that has sat empty the last few years) to release details of the project and start sales for a late-2017 delivery. Leading up to the project, I expected that NVHomes’ new Urban Division would look to successful nearby luxury projects like Gaslight Square, The Wooster, Rosslyn Key, and Rhodes Hill Square for their design and pricing with an emphasis on Gaslight Square considering its most recent success with Phase 3 (final build-out).
Instead of delivering a fully custom luxury product, NVHomes is sticking with their bread and butter formula of delivering a more moderate project that fits surprisingly well between Rosslyn’s mid-market options like The Atrium, The Belvedere, 1800 Wilson and its luxury options like Turnberry Tower, Waterview, and those mentioned above. It makes sense for NVHomes, avoids over-saturating the Rosslyn luxury market, and satisfies demand.
With just over sixty units including 1BR + den, 2BR, 2BR + den, and 3BR flats ranging from about 850sqft to just over 1,500 sq ft, plus five 3BR townhomes at nearly 2,000 sq ft there are a surprising number of options for buyers. Starting in the low $600s and clearing the $1M mark for some of the larger flats and townhomes, it’s an attractive $/sq ft for a new building just a block from the metro and likely to benefit from the massive redevelopment of downtown Rosslyn. For market-average condo fees, residents will get a high-end gym, 7-day/week concierge, roof deck, large common terrace w/ grills, and underground parking.
I’m looking forward to seeing how the larger 2BR + den/3BR flats do compared to the townhomes. I think the challenge for the townhomes will be the fact that the master bedroom is the entire top floor, with the 2nd and 3rd bedrooms on the 2nd floor (main level is kitchen and living space), making it a difficult layout for buyers with a young child (prefer to sleep on the same level) and a lot of steps for regular trips between living space and master bedroom. However, with only five townhomes being delivered, they’ll probably be the first to sell-out.
Personally, I think the best value purchases are the 1BR + den and smaller 2BR/2BA because they’ll make great rental properties with the dens/2nd bedrooms being on opposite sides of the apartment from the master bedroom (ideal for roommates). If you’re planning to live there for a while and can afford the premium, there are two 2BRs with 500 sq ft private terraces and a handful of 1BR + den and 2BRs in the back with larger Limited Common Element terraces (only accessible to your unit, but technically common space) that offer hard-to-find “useable” outdoor space.
While there wasn’t anybody camping out for the sales office to open, the line to sign-up for a sales meeting on Thursday night reached 50+ people at some points and there were probably a few hundred people at the event. The R-B corridor and Arlington market is hungry for new condos and this delivers at a price range that meets a lot of budgets and designed to accommodate a range of buyer types, so I expect sales to move fairly quickly, even though people won’t get to step foot into a unit until the end of the year.
Feel free to reach out to me at Eli@RealtyDCMetro.com if you have any specific questions about the floor plans, pricing, location, sales process, etc or if you’re considering a purchase in the building. I’d be happy to discuss details and my thoughts on the investment potential of purchasing in Rosslyn.