The project, which is in lease this year, is a hit, according to Grant Montgomery, a vice president at Alexandria, Va., real estate consulting firm Delta Associates. “It’s leasing up at really high rents and absorption,” he says. “It’s one of the few projects delivering this year in D.C.”

That kind of success could only serve as impetus to bring more office developers into the market.

Multifamily Reaction

Now that the multifamily ship has righted, Kettler says he’s back out talking to office and retail developers about mixed-use projects. “They’re building mixed-used in intense areas where housing and employment and high-end retail and transit are co-existent,” he says. “If they have land or portfolio or parking lot, it frequently works to be part of a mixed-use project.”

In fact, Kettler estimates that mixed-use elements create a 5 percent premium in the value of the apartment. “One of the things we’ve come to realize in mixed-use is that the retail adds a lot more value than the other uses provide to the retail,” Blocher says.

Missing out on that type of value creation could be why some multifamily developers privately express concern that retail developers will push more fully in the apartment development space. And by doing development themselves, they’re taking away opportunities from multifamily developers.

“More people in the marketplace doing what you do is competition,” says one multifamily developer who didn’t want to be quoted for this story.

The retail view, though, is if they’re creating value with the restaurants, bars, entertainment, and retail, why not enjoy that value?

“If we create the lifestyle and the community, then we can capitalize on the value of the residential,” Goldman says.

Even if a company like Federal decides to build its own apartments, there’s still room for a pure apartment guy, eventually. Federal still uses apartment managers to run its apartments once they’re built.