In focus: How Washington earns its place in the top 10
The city now has more to offer than just its rich political history, world class museums and House of Cards. As more workers look to base themselves in the heart of the action, developers have responded with new residential apartment blocks.
City: Washington DC, USA
Index ranking: 9
Share of national economy: 3.9%1
- After decades of decline, Washington’s population is booming
- According to the US Census Bureau, the area is the most educated in the US2
- Infrastructure: the Washington region is highly dependent on the Metro, the country’s second-biggest transport network (after New York) and it faces ongoing issues and falling usage
- The state has the lowest purchasing power in the US. The Tax Foundation, a think-tank, suggests that $100 will only purchase $84.67 worth of goods
Why Washington DC is a global city
Washington is ranked 9th in the Schroders Global Cities Index and it forms an important mega-city cluster with Philadelphia, New York and Boston. It’s home to the three branches of federal government and 176 foreign embassies.
The index seeks to identify those cities that have the most potential from a real estate perspective. Washington’s superior position is supported by a number of factors, including high levels of skilled employment and demand for real estate.
With skilled labour follows gentrification and the trend appears to be prevalent in a number of neighbourhoods. Moustached mixologists on “fixie” bikes (to capture all the clichés) appear to be moving in to previously run-down areas in their droves.
The city’s centre of gravity is shifting north away from the Mall and into the traditional business district, and 14th Street appears to epitomise the trend. The neighbourhood now offers bars, restaurants, galleries, music venues and vintage stores in a place where abandoned buildings and vacant lots had previously blighted the area for decades. In only the last few years, the neighbourhood has seen more than 25 new bars and restaurants, 1,200 new condos and apartments and 100,000 square feet of retail built.
We travel frequently to global cities to meet with the management teams of real estate companies and undertake primary research in the cities. Following our recent visit to DC to analyse the hotel sector, we believe the area remains vibrant and an attractive place to invest.
However as supply grows and potential tenants become ever-more discerning, developers and investors will need to offer innovative products to make the most of the opportunity.
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