The sign on New Jersey Avenue SE makes an attractive offer to potential office tenants. The coming development, it says, will have 190,000 square feet of office space, directly adjacent to the Navy Yard-Ballpark Metro station. There’ll also be 8,000 square feet of retail on the ground floor.

But that’s not what’s coming to the site at 1111 New Jersey Ave. SE. Instead, developer Donohoe Real Estate Service has changed its plans to build 394 apartments there, slated for completion in 2016.

The switch from office to residential development has characterized the Capitol Riverfront neighborhood in recent years. The arrival of both the national and District transportation departments helped put the neighborhood on the map for many D.C. residents. But since the recession, the office market has stagnated across the city as the federal government and private firms have opted to reduce their space requirements per employee.

As of last year, according to the Capitol Riverfront Business Improvement District, 50 percent of the eventual office development in the neighborhood was built out. By 2017, the BID projects, that figure will be 51 percent—-an increase of just one percentage point over four years. In the same time period, the BID forecasts, residential development will have jumped from 24 percent to 47 percent, hotel development from 16 percent to 58 percent, and retail development from 22 percent to 50 percent.

In other words, construction of offices—-the dominant form of early development in the neighborhood—-has pretty much ground to a halt, while other uses are quickly catching up and surpassing it.

BID President Michael Stevens notes that new offices for the National Labor Relations Board and CBS Radio will bring nearly 1,500 employees to the neighborhood, and he’s still aiming for a total office presence at the bottom end of the initially projected range of 15 to 17 million square feet. But it’s clear that it’s residential, and not office, growth that ‘s bolstering the neighborhood.

The population within the BID’s borders has grown from 1,100 in 2009 to more than 4,000 today and is expected to surpass 5,000 next year. There are six apartment buildings currently under construction. The neighborhood currently lacks a supermarket but will soon have two: a Harris Teeter set to open in September, and a Whole Foods that’s broken ground.

In addition, two developers have recently announced plans for condominiums in the neighborhood. PN Hoffman will build 130 condos at the Yards complex, and MRP Realty and CAS Riegler Companies won a bid this month to build 126 condos at the Metro chiller plant site. “That’s a really positive sign for the neighborhood,” says Stevens, who believes that ownership housing will deepen residents’ personal investment in Capitol Riverfront. 

There’s one additional development possibility aside from residential, retail, office, and the parks that form the heart of Capitol Riverfront: sports arenas. Nationals Park helped build hype around the neighborhood. The proposed D.C. United stadium is also within the BID’s boundaries, and Stevens thinks its impact could be “catalytic” on Capitol Riverfront and the broader waterfront area. But first the D.C. Council will need to approve it—-no sure thing.

Photo by Aaron Wiener