Apr 23, 2024 - Real Estate

D.C.'s most expensive street is no longer downtown

A man walks along the Wharf neighborhood in Washington, D.C.

A pedestrian pathway in The Wharf, the development bordering Maine Avenue. Photo: Amanda Andrade-Rhoades/The Washington Post via Getty Images

The Wharf's Maine Avenue has ousted downtown's Pennsylvania Avenue as D.C.'s priciest commercial street, per a new study by real estate group JLL.

Why it matters: It's another sign of downtown's suffering office market — an issue squeezing city finances and forcing leaders to get creative with vacant spaces.

The big picture: The Wharf's No. 1 spot comes as employers are increasingly trying to coax workers in with shiny new offices in bustling mixed-use areas full of housing, dining, and entertainment.

  • It's the first time in almost 20 years a street that doesn't run through D.C.'s downtown has snagged the top spot: Pennsylvania Avenue NW was No. 1 in 2019 and 2015, per JLL data. In 2010 it was 17th Street NW; in 2005, New York Avenue NW.

This follows a national trend of prime office corridors migrating from central business districts post-Covid and into "off-core peripheral urban neighborhoods," per the report.

  • 54% of the country's most expensive streets were located in such peripheral areas last year, as opposed to only 39% in 2005.

By the numbers: Maine Avenue SW is the country's 10th-most expensive street, clocking in just below Miami's Brickell Avenue, per the report.

  • The Wharf avenue's average asking rent in 2023 was $80.44 per square foot, with its highest hitting $95 per square foot.
  • It had a 2.5% vacancy rate at the end of 2023, compared to Pennsylvania Avenue's 15.3%. Meanwhile, D.C.'s overall office vacancy rate was 21.6% in the first part of 2024.

Zoom in: The Wharf only opened in 2017, with its second phase finishing in 2022, meaning it's filled with the kind of glitzy new trophy buildings employers are looking for.

This shift also comes as downtown struggles with concerns about crime, even though numbers are down compared to the same period last year.

Yes, but: This isn't to say Pennsylvania Avenue's days are over — it's still the second-most expensive street in the city, while New York Avenue NW is third.

  • However, this is just the first year Maine Avenue has hit the necessary inventory threshold to be included in JLL's report — meaning it's possible it could have snagged the top spot sooner.

What we're watching: D.C. is unleashing a slew of initiatives to help downtown find its groove again and compete with 24/7 neighborhoods like The Wharf.

  • The $400 million Downtown Action Plan imagines a new entertainment and cultural district, with lots of open, walkable green space.
  • Mayor Muriel Bowser recently announced a pilot program to convert empty storefronts into art pop-ups, while empty office buildings are being turned into apartments and food halls.

Meanwhile, the Washington Post recently ran an op-ed declaring that the decision to keep Capital One Arena in D.C. could kick off a downtown revival.

avatar

Get more local stories in your inbox with Axios Washington D.C..

🌱

Support local journalism by becoming a member.

Learn more

More Washington D.C. stories

No stories could be found

Washington D.C.postcard

Get a free daily digest of the most important news in your backyard with Axios Washington D.C..

🌱

Support local journalism by becoming a member.

Learn more