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Architecture DC
Fall 2004

Home Sense: How to Think Like a Developer
BY Hannah McCann

"Banks just shuddered" when developer Jim Abdo decided to bring new condos to the 1500 block of P Street in 1998. Foods stood in the bay window of one of the handsome new units and envisioned his store in the next block.

Wishing you had bought a house near 14th Street before the boom hit? You’re not the only one. Aspiring homeowners across the Washington area
are discovering that the city’s rebirth makes house hunting nearly impossible. Just when your real estate agent has convinced you to look in the newest up-and-coming neighborhood that you never heard of before, that neighborhood is too expensive...

...If you’re shopping for a home, condo, or investment property, it might be useful to borrow developers’ crystal ball. How can you get into the next hot neighborhood before it’s too hot to touch? And what Washington neighborhoods are next?

Clue #1: Intrinsic Value
Jim Abdo, President of Abdo Development, remembers his first bold
move as a DC developer: he bought on the 1500 block of P Street, one block east of 16th Street. It was 1998 and “banks just shuddered,” he recalls. No one went east of 16th. Abdo bought a crack-house and the vacant lot next door for two reasons. First, “I’ve always had a passionate attachment to beautiful old structures,” Abdo says, and the house was a grande dame fallen on hard times. Second, Abdo believes that “if
something of a significant quality of design is created, there will be a market.”

Abdo has architects on staff, who designed the respectful renovation of
1517 P Street and the handsome new building next door, creating seven condos total. The condos sold for record-setting highs in price per square foot in 1999.
Abdo asked one of the new condo owners if he could borrow his keys for an afternoon. He invited the CEO of Whole Foods to fly in from Texas and meet him there, where they sat on the sofa in the bay window of the graciously appointed unit. “This is the kind of clientele that’s coming to this neighborhood,” Abdo said. The CEO looked around and peered out the window up and down P Street, west towards Dupont and east to 14th.

A year and a half later, the Whole Foods a half block away was built, open, and busy. People say the store transformed the neighborhood almost
overnight. Abdo recently saw the CEO from Texas. “He gave me a hug and a handshake and said, ‘You were right. It’s one of our top stores in the entire country.’”

It’s a terrific success story—both for Abdo and DC—but also an illustration of Abdo’s approach to development. “What I did was to focus on the buildings first, if they spoke to me. You can exhaust yourself if you take a purely analytical approach,” he says.

Looking at the quality of a neighborhood’s architecture— it’s history and character—is a good way to gauge the development potential of a neighborhood. Buildings may be run down, but were they built to
last?...

...“Good housing stock” is the first clue to look for before investing in a neighborhood...

...Next, look for..."the hub.” You want to see a natural area of congregation...

...The most promising type of hub is a Metro station...

...There are other innate characteristics of a community that can indicate its potential for redevelopment...

...“the stability of churches... and ...the importance of a good political infrastructure.

Clue #2: Pride of Place
Explore the neighborhood where you’re considering investing. Check the pulse of the community. “If you’re seeing ladders and permits, you can get a sense that this is an area where investment is taking place; there’s pride of ownership,” Abdo says. “Frequent the location not just at four or five in the afternoon—go there at midnight, two in the morning, the weekend. Get a feel for the energy and activity.”...

...Another sign of pride of place are active neighborhood associations...

Clue #3: Tide Tables
“If you want to participate in the renaissance of Washington DC, look ahead of the wave,” suggests Abdo. Where are developers spending their dollars? That can be a good indicator of what neighborhood is next. For instance, Abdo recently spent $24 million to buy the Capitol Hill Children’s Museum site at 3rd and H Street, NE. You figure that with that kind of investment,Abdo has done his homework. “I’ve looked at a lot of areas all over the city,” he says. “I’m convinced H Street’s time has come.”

Tax records are also a good indicator of the tide in a neighborhood...

Predictions
So what neighborhood is next? Abdo, ... mention(s) the H Street Corridor. Abdo suggests looking “even further out the corridor, towards RFK stadium… there’s good potential in rowhouses.” Georgia Avenue/ Petworth is getting a lot of attention...

Excerpts from Architecture DC Fall 2004