The need for a different approach to office development and for more housing downtown were two central themes echoed during a business forum Thursday morning.
In its sixth year, the Leesburg 360 forum was held at K2M’s headquarters off Miller Drive. Representatives from the real estate and land development sectors joined with the town staff to examine current market conditions in the county seat.
Economic Development Manager Marantha Edwards began the forum with a glimpse into town demographics, and local agents spotlighted some of the available office, retail, and restaurant space available or under development in town. Edwards noted that commercial vacancy rates in town stands between 12 percent and 15 percent, a number some disputed is high.
During a panel discussion, speakers traded observations on trends in the commercial market in Leesburg and elsewhere.
Leesburg Executive Airport Manager Scott Coffman shared his thoughts on development around the airport. He noted that decades ago the airport was strategically located far from populated areas of town, but now more development is headed the airport’s way. He pointed to the ongoing construction of a commercial center featuring a Super Walmart near the airport’s runways. Concerns about commercial development near the airport is that lights or tall buildings could obstruct the path for pilots.
Rounding out the speaker list were Molly Novotny, a planner with Cooley LLP; Don Knutson of Knutson Companies, which was responsible for the Crescent Place development; and Bob White of Landmark Commercial, the developer behind Courthouse Square downtown.
Asked for his opinion on the lagging office market, White pointed to relatively flat rents and abatements or concessions given by property owners as reasons that market has not recovered from the recession in the same way that other segments have.
“This has been a long, tough slog,” he said. “When rental rates creep up, I think you’ll have a different situation.”
White also noted that there has been little new office construction, with an exception being build-to-suit spaces, as such as the location of the forum, K2M and the new EIT headquarters set to open nearby. There has been a sea change in how office space is used, with company’s scaling back their per-employee space needs. That number stands now at an average of 170 square feet per employee and is threatening to go lower, White said.
“We’re densing up the existing office space. We have more people and less space,” he said.
Novotny concurred, saying users are looking for less space than they were before. However, she said the town has an advantage in its large supply of boutique office space. “Leesburg should try to cater to that, not change.”
On the retail end, Novotny said that market is also changing. With the rise of the online commerce and the ability to purchase goods with the click of a mouse, the public is choosing to patronize brick-and-mortar establishments that offer experiences. She pointed to grocery stores that also offer a café or restaurant component, and recreational spots like Pump It Up and CraftyStitches.
On the residential and mixed-use end, Knutson said more people are looking for the type of developments like Crescent Place, which offers residential living within walking distance to downtown Leesburg, as well as retail and restaurant establishments. He said he is a big proponent of adding more residential development in and near downtown Leesburg, and said he has seen an increased interest from young professionals in the downtown.
To that end, White said he hoped Leesburg leaders do not take the attitude that residential development is bad for the town. Particularly in the downtown area, it puts feet on the street, he said.
“If downtown Leesburg is to remain economically viable, those people are needed,” he said.
Novotny also said that with few large tracts left to develop, the town should prepare for redevelopment. The City of Falls Church has been fully developed for many years, but recent redevelopment has re-energized the area, she said, and the same can be true for Leesburg.