Those who live in the DC area know that traffic in Tysons Corner can be a nightmare, especially around the holidays. Even after the advent of the Silver Line, questions linger around the area’s ability to meet renter’s demand for urban, walkable neighborhoods. CoStar’s DC Market Analyst Omeed Naderi, in his 3Q2016 Tysons Corner Submarket Report, states: “Improvedwalkability could make or break demand for transit-oriented apartments here, with some comparing a walk to the Metro in Tysons to a game of Frogger.”
Those questions aside, though, Tysons has a lot of apartments. In fact, there are 8,067 units in 22 communities renting at an average rate of $2.00/SF. Tysons also currently has a lot in the pipeline, with 1,033 units underway and an additional 22 proposed projects.
What’s interesting is if you take a look at vacancy rate by unit mix:
Three bedrooms have, by far, the tightest vacancy on the market, hovering just under 5%. Studios and one bedrooms are much higher, but a lot of that is due to new deliveries, such as Haden Apartments.
Still, when you take a look at price per square foot, three bedrooms fetch a healthy rate at around $2.20.
As expected, studios and one bedrooms achieve a higher price per square foot. However, CoStar expects nearly 500 units to deliver in 2017, and none of them are three bedroom units. In fact, only four three bedroom units delivered in 2016, and none of the 8,000 proposed units are three bedroom models.
This isn’t to say that a developer should go all in on three beds—a lender would have a tough time backing that—but allocating a modest amount of units to three bedroom models could be a good idea. Studios and one bedrooms will continue to flood the market. VITA, for example, which delivered in May of 2015, includes 64 three bedroom units—accounting for 15% of overall unit mix. These units current have 91.5% occupancy. Studios are at 94.8% and one bedrooms are 78.4% occupied.