A veteran DC-area real estate expert is challenging the way institutional investors view the DMV market, particularly their outdated perceptions of Arlington and other close-in suburbs.
“I saw this during my time at Aetna,” says Chris Ott, now with the Keri Shull Team at eXp Realty, drawing on his experience managing a $400 million commercial mortgage portfolio. “We always considered Arlington like outside of DC, but once you’re here and you’ve been here, you realize that Arlington is built. It’s not just like an up and coming city.”
The Local Knowledge Gap
According to Ott, who spent years evaluating properties for institutional investors before moving into the local market, outside capital often misses crucial market dynamics that local developers inherently understand.
“Much more local investors that have been here for a while know the area,” Ott says. “Somebody coming in may not understand that with Ballston, Clarendon, and everything around it, it’s set up correctly. That is the place to be.”
Complex Market Dynamics
Ott points to a current project in Alexandria’s Huntington area as an example of why local knowledge matters. “The whole area is all duplexes, right? But what’s interesting is the whole area is also zoned commercial,” he explains. “It’s been originally zoned commercial the whole time, but some developer in the 40’s got a waiver to build duplexes and sell them as residential.”
This historical quirk creates unique challenges and opportunities that out-of-market investors might miss. “We’re now trying to sell a property and convince people that it can still go back to residential while dealing with Fairfax County in that process,” Ott says.
The Value of Market Experience
“It really takes somebody that knows the market, somebody that knows how to deal with the county,” Ott argues. “You’ve got to be smart. You’ve got to have a smart developer as well.”
His experience spans from analyzing nationwide commercial mortgages at Aetna to managing reporting for a $1.5 billion real estate private equity fund, giving him unique insight into both institutional and local market perspectives.
Looking Ahead
While institutional capital continues to eye the DMV market, Ott sees the greatest success coming from developers with deep local roots. “There is a strong push to convert these buildings to residential,” he notes. “The international market and the institutional market coming from out of state, coming from New England, New York – they don’t really realize that.”
