Real Estate Riffs: Alan Kline, Senior Editor at Washington Business Journal

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John:  Al, welcome to Real Estate Riffs. 

Alan: Happy to be here. 

John: It's a pleasure to have you with us today. You and I have known each other for, I think, maybe 27 years. And as I was recalling, my whole career has mostly been in commercial real estate, but my first personal investment was with you. We were 50-50 partners on a house in Capitol Hill, which I think we bought in December of 1999. 

Alan: Right, exactly.

 John: As a matter of fact, I think we both got our deposits back. 

Alan: We did. First time home buyer credit, I think.

John: First time home buyer credit at $5,000 and we each put $5,000 down.

Alan: And I think I had to borrow the money from my dad at the time too.

John: Same here. So, I mean,

Alan: Think about when we first lived in Capitol Hill, right? Like there was, there was nothing on H Street, nothing down at the Navy Yard, nothing down at the waterfront.

John: Even Chinatown was just then coming around when they put in the arena and the Capitals were coming into DC to play. And to give some context to today's conversation, we're going to talk a lot about Washington, DC. And obviously over the last five years, starting with the pandemic, then with the major shift in the office environment and how people use office and what that's done to small businesses. And then most recently last year with the change of the administration and a lot of swift changes taking place. Tell us real quick a little bit about yourself, if you don't mind, and then maybe for our viewers/ listeners, you as a journalist, what it's like starting every week facing deadline after deadline.

Alan: All right, I've been a journalist for over 30 years, and I've been with Washington Business Journal for almost four years now. Before this, I was an editor-in-chief at American Banker, so I covered banking and finance for a number of years. And now I'm covering local business, which is very interesting to me, especially at a time like this. Our big deadlines are 8:30 in the morning and 3:30 in the afternoon. That's when our emails go out. So, we want to have fresh stories for every e-mail.

John: So that's why I saw the 8:30 news about the Commander's Stadium renderings being released.

Alan: And you know, that was interesting because we got that at 8 o'clock this morning. So, we just wrote quickly two paragraphs with the renderings, put that in the e-mail, and then we have then we can update the story. And that's what you can do in this world right now. 

John: Right. 

Alan: You know, in the old days, there's no way we would ever get that story in.

John: Yeah.

Alan: I mean, we still have print, but It's mostly just putting the stories that have already appeared on the web, because some people still like to read the stories in print.

John: Yeah. As do I. And I get made fun of it at home. I enjoy having the newspaper and sitting down and taking a break from the screen.

Alan: Yeah, I still get the Washington Post delivered every day.

John: Yeah, great. Well, let's start off with what you found as a journalist to be most surprising in 2025.

Alan: I mean, for me, it was just the speed at which everything happened. like this administration came in and every day the FBI is ditching Greenbelt and going to the Reagan building, dismantled USAID like in a matter of days. Oh, like HUD taking over the NSF building in Alexandria. I mean, it was just every day there was something like--some giant news story, it seemed, basically coming from this administration, and it had, oh, in knocking down the east wing. Like that happened in what, two days. So, for me, it was just the speed. Like you've never seen anything like it.

John: And what we were faced with last year, to your point, before you even had an idea that there was a thought happening, that news would break. And it's not just a thought, but it's actually action put in place and the implications are being felt immediately.

Alan: Yeah, I mean, from a news perspective, this has been like drinking from a fire hose every day, since the inauguration a year ago.

John: Yeah. And so I have to imagine as a journalist and you're not even focused on politics and the federal government, but if you're doing a story on anything related to downtown Washington, the story might completely change because of something external or some executive order that has a complete and direct implication.

Alan: Absolutely. in, yeah, you said it, you hit the nail on the head. We typically, as a business journal, haven't really covered the federal government that much, but this administration has said had such an impact on everything. Like, you know, day one, executive order signed, you know, return to work. You know, that was a big deal, right? And then a few days later, it's all these executive orders like, slashing agencies and cutting federal contracts. And that just the impact of that was profound.

John: Yeah. And I think we can talk, we can talk a little bit about what that meant for the city. I think the numbers show it was a 4.5% direct drop in federal employment.

Alan: Yeah

John: I felt that, even though there was a direct impact, I felt like Washington DC is rather resilient. I feel like it's always been, I think the community stood up and supported one another. I think the city is in a better place than what most people outside of DC thought it was. So, I think there's a big gap in perception versus reality.

Alan: You know, I still worry that a lot of these jobs aren't going to be absorbed as quickly by the private sector. And that has ripple effects, right? I think we're already seeing it in some of the apartment vacancies, homes lingering on the market a little bit longer. And, just anecdotally, like I certainly know people who really struggle, especially contractors, to find work. On the positive side, some of them are starting their own businesses, but it's, I think it's, not, I think it's, there's some challenges.

John: Yeah, and I think the ripple effect too, everyone's talking about the downtown DC environment and how all of this has had an impact on, take restaurants, for example. I think there were 95 restaurants closed last year. Yeah. And more are expected to close this year because you just don't have the daytime traffic.

Alan: And the expense.

John: The expense, yeah. Right. What are your thoughts on when the trajectory of DC changed? And I think I already know the atmosphere video. Was it sudden or were there any subtle effects?

Alan: The inauguration is when, to me, like that's when every that's when everything changed and it wasn't it wasn't subtle. You know I mean it, like I said before, it I mean it it's it affected everything; it affected employment, it affected…it affected foot traffic, and then then you bring in the National Guard and take over the police, and then that affects perception. I think that scared people away. I think it's scared away tourists. It's certainly, I think it certainly affected the restaurants in those months, people who are living in Virginia, Maryland.

John: Yeah, and the convention business. I read there, I think over 40 conventions were canceled last year, right? And a lot of it, I think, was the perception.

Alan: Yeah, exactly.

John: I think a lot of people out outside of Washington…it could be a Supreme Court hearing. It could be an executive order. It could be the shutdown of US, right? You hear that news and then obviously you're going to see a number of protests around it. And I think outsiders perception is the city's just in a state of turmoil. It's in chaos. You know, why would you ever go into that environment? Whereas I think for a lot of people, you go through your day-to-day routine, obviously you're aware of it and it's impacting you. But still, it's a very diverse economic environment here.

Alan: Yeah, for sure. And I saw, I saw that, I was taking, I took the Metro here and there are National Guard troops all over the Metro Center. And it's not, it should, that shouldn't be scaring people away, but for it seems to be.

John: Right. Yeah. And I think hopefully we'll get to, we'll get to this. I think there's an opportunity for the city this year to change its perception. and give tourists a reason to want to come back. Do you think there were any events outside of the nation's capital that sort of came back and had a direct impact on the city? Like I think about from a commercial real estate point of view, the office sector was obviously not one where capital was focused. In fact, a lot of capital is retreating. I think that exasperates the issues where you've got not just downtown, but the suburbs around Washington, office in general, and it's not just isolated to DC, it's a nationwide issue. But when you have the problems and then you confound it with lack of investment from a national perspective, right, then I think that makes it even worse. And then the trickle down effect continues, right? And the office vacancy in DC is already very high. It's been impacted more. But are there any national headlines that you would think about that you felt like also came in and impacted the city?

Alan: This has maybe be more of a good news story, I think, for the city. You know, one thing, you know, we talked about some government contracts and everything, but there are some sectors of government contracting that it's a good time to be in that business. And that, the Trump-- this administration is spending so much money on defense national security. And if you are-- and it's really making a conscious effort to spread that money around to these, a lot of these younger, smaller companies that you may not even heard of. So now, because of that, you're starting to see investment really pour into this market for some of those companies. Like, you've saw like 9 figure rounds just in the last few months, all related to defense and national security. You see venture capital firms moving here because of that. And so, you know, for the, and that, with all, you know, with all that's going on in the world, and you know, you can, have your opinions on, these conflicts around the world, but it has been good for the defense, for the defense industry, and even, and I'm not just talking about the Lockheed Martins of the world, I'm talking about a lot of these smaller companies that you may not, that you may, they do, they make technology for military drones or autonomous vehicles and things like that. And it's, for those companies, this is the place they want to be.

John: Right. Well, I think we owe it to the city to talk about a couple of other positive things that happened in 2025. A couple that come to my mind are more sports related. That is the city getting the deal for the new stadium. Obviously, we talked about the renderings came out today. I think the target deadlines 2030 stadium to be open. I think that'll be great for the city. Ovie tied and broke the record. So, you know, that was something the city's been watching for years. So that was great to see. And then maybe not such a positive thing, but a sports-related change, and that is Trump taking over the golf courses in the city.

Alan: Yeah, I don't know if that's a positive change or not. I play Cain's Point all the time, and I like that I can go there and play 18 holes for $42. I have a feeling that if the administration takes it over, I'm not going to have that, I'm not going to enjoy that luxury anymore.

John: I’ve always enjoyed it. That used to be a place I would go when I worked downtown. We called it nine before 9. We'd do 9 holes before we'd go to work at 9:00. Back then, I think it was $12 to put a 9 hole. Well, let's pivot a little bit and let's talk about what's next for Washington, D.C. We talked about perception. We talked about people's thoughts on crime. I'm downtown A lot. I feel like in my mind, there's been some incidents. They're not great, but it's a major city and like any major city, you just got to stay on your toes and be aware of your surroundings, right? So, let's talk a little bit about the big 250th birthday. Washington, DC has a whole slate of events planned throughout the year. I think it's a great opportunity. I think it's a great opportunity for the city on two parts. One is to bring in the tourism, generate a lot of economic benefits through hotel nights and revenue through our restaurants and our small businesses, but also, I think for the local community as well to gauge and to showcase neighborhoods. So, I think it's a really interesting opportunity. Do you have any thoughts on whether this is going to be a boom or bust or?

Alan: This is a tough one, for this they're predicting 50, I think there was like they're predicting 50 million visitors to the region this year. That would be double what it's like, I think, what it is as an average year, but so I mean it that does-- that does feel a little ambitious to me. I think there's still a lot of people who don't necessarily want to come here. Maybe it's because it's July and it's DC, right? It's hot. But also, because of the perception that we were just talking about. And then you have, you know, this administration is going to be like front and center on the celebration. And then, you know, right or wrong, there are a lot of people who don't approve of this administration. So, they could be like, I'm just, I'm not, I don't want to bother to go to DC. But then again, you have a lot of supporters too, so who may come. And there's going to, there's going to be cool stuff. There's going to, there'll be the fireworks are obviously going to be awesome. There's, you know, ultimate fighting on the South Lawn is going to be here, right? And that's all, like I said, the tall ships. I mean, there will be lots of reasons to come here.

John: No, I mean, it's January, but I, you know, a million a week, a million people per week on average. It feels ambitious. It would be great to see it. I always think it's great when you go downtown and you have people from all around the world coming to see the city.

Alan: We're often away on 4th of July. Usually, we're up in New England. And this year I really want to be here, you know, just to experience the celebration.

John: Right. I mean, it is, you know, it's relative to other major developed countries. We're very young, but 250 years is something to celebrate.

Alan: Yeah.

John: So as far as the future of DC, We talked about where you and I started when we met, how much positive change we've seen. Lots of different neighborhoods emerged and grew and developed. The focus today is really, I think the conversation around Washington is downtown, right? And what it means for a lot of the federal agencies that might relocate, that might consolidate or be shut down, right? One of those three options. There will be immediate impact on the city and jobs and demographics. Do you think that creates a big opportunity as well for the city? And where do you think the government should be focusing its efforts to incentivize development and growth?

Alan: Well, I mean, I think the DC government is already, I mean, offering incentives to accelerate the conversion of upstate office buildings, right? And so, I think that's, I think that's a good thing. And you, how do you feel? I mean, you're in that business.

John: Yeah, I like, they've got the office to do anything conversion program. I think there's already, you know, maybe a dozen properties, you know, being put through that plan. Conversions are very challenging. A lot of these buildings in my mind are obsolete. You know, it's, you're going to get to a point where it's more economical to tear them down and start from scratch versus trying to reinforce.

Alan: I mean, maybe it maybe makes them open space too, right? Like that, probably wouldn't be a bad thing for livability right downtown, right? I mean, that is something I think obviously I think conversions are a great are a great thing, but not everybody wants to live in high-rise apartments, right? And we've talked about there's a housing shortage for sure, but we still have to build the right kind of housing, right?

John: No, there's a massive housing shortage. I think the last number I saw for Washington, DC, the region was we have a 390,000 unit shortfall of housing, right? And it's one reason why I think the market was so resilient during this past year. I have not seen anything drop. There's always so much pressure on single-family homes and housing and rentals here that you never really see boom or bust in Washington, DC. But I think the opportunity is, downtown, I don't think downtown Washington, DC should be the epicenter of the federal government. I think the less it's defined by the federal government, the more healthy we become as a city.

Alan: Yeah, like what industries, right, can you attract? That's the question. I mean, the city is certainly trying to attract tech companies, and they have incentives there, but everybody wants to attract tech companies, Montgomery's goes after all the life sciences companies and Northern Virginia seems to be more of a tech hotspot, so there's a challenge there, but if they, if that could be successful, like why not? I mean, if I'm a tech company, I'd love to be downtown. Right? Where there's just a lot more action. There's a lot more, there's a lot more to do for your employees, right?

John: Maybe the focus then is on, defense tech or cyber security or.

Alan: Yeah, I mean, something. Wouldn't it be nice to see like a lot, I mean, I live in Virginia and I don't want to knock North Virginia, but wouldn't it be nice to see some of these firms’ kind of migrate into this idea instead of migrate out?

John: Right.

Alan: Which is really what you've been seeing.

John: Yeah. And you're seeing a lot of, I was in San Francisco and right, you get the Bay Area, but there's a lot of hot tech companies now. They don't have space there and San Francisco has a lot of space and there's a lot of startups in San Fran and they're getting a lot of support from the city and getting a lot of investment. So yeah, there's a number of different ways to look at it. There will be a void, but I think if we're going to think about where DC should be in 10 years, this is the opportunity to start thinking.

Alan: Yeah, I think so. And like you said, we talked about the defense and national security stuff. I mean, you know, maybe not the federal government downtown, but the industries that are supporting it, you know?

John: Yeah. And yeah. Playing off of that a little bit, maybe you and I should be the ones talking about what young people want today. I'm just, when I travel to other cities and you see how vibrant they are, DC is a little different, right? It has its own vibrancy, but it feels a little different. Do you think Washington, DC is a place that young people want to be and to live?

Alan: I do. I think DC is a very livable city and I think it has great neighborhoods that may be underrated. You know, a lot of people don't venture out to them, but there are some great neighborhoods in the city. There's great culture. I don't know. I mean, I'm a fan and I lived in the city for a long time and being a young person in the city, I would recommend it to anyone.

John: Yeah, it's a very functional city in my mind.

Alan: Yeah, and it's easy to navigate to like, you know, that I think that's a big deal, right? Like, yeah, you live in New York, but you know, it's a pain to get out, In DC, it's not like that. It's very walkable. It's easy to get around. So anyway, I would recommend it. I didn't think I'd be here more than three or four years. And it's, you know.

John: And that part, you know, I will say, when I first moved here, it felt very transient. It was very transient. People came here for a purpose and that purpose was three to five years. And then they took that experience and then they went elsewhere. And I think over time, what I saw was more and more people coming here and deciding to stay in DC. And I think to your point, it's very livable. It's very walkable. And it also offers so much outside of the city that's, you know, that's very convenient, right? You're not going to drive, if you drive an hour outside of Manhattan, where are you going to be?

Alan: Yeah, exactly. But you know, what we have to hope is that people do stay. Like we did talk about the loss of these jobs. And can the market absorb these jobs is going to be the big question, I think, going forward. And if not, are we going to see a little bit of an exodus, both from the city and from the surrounding suburbs? So, I guess that is, that's something, as a journalist, it's something we're keeping a close eye on.

John: Right. Yeah. Okay. Well, let's look out into the future. And so, if I were to ask you if we're sitting here in three, four years, what would you say might be a major turning point for the city?

Alan: Getting more activity downtown in…if whether that's whether that's through housing or through new, just attracting new industries. I mean, I think that's really the key because it's, you go to the neighborhoods around DC and they're still kind of thriving, like people living in them, people walking around, they go to the bars and the restaurants, but downtown still feels pretty lifeless. And I don't know what that turning point is, but that's, I mean, that's really what the focus has to be. It's great. It's great that the city was able to fight to keep the Wizards and Capitals. That was huge. And even though I live in Alexandria, right, and that would have been a big benefit to my community in terms of tax base, whatever. And I was furious. I'm like, Virginia should not be poaching the Capitals and the Wizards. When Virginia has so much going forward and everybody should be, everybody should be supportive of a thriving downtown DC. It's A thriving pin core.

John: Yeah, I think that was my biggest surprise of 2024 when that news broke. I think it was in 24. And I agree. And you know, I live in Arlington. And my thought was “I don’t wanna go to Alexandria, especially that location.”

Alan: Exactly. There was one way to get there. 

John: There's one way to get there. It's a bit isolated. And then, you know, I like--I went to the hockey game Tuesday night. I got to see The Great; they were down to nothing going into the third against the Canadians. I got to see a wonderful win in overtime. But I met some folks, you know, for dinner and there's 15 restaurants to choose from there. They're all unique and different, right? And I like having that experience and going to the game. So, I was in the same boat as you. I was not thrilled that they would be moving to the Potomac Yards area of Alexandria. And I'm glad that they were able to keep it. But to your point on the future, I do think it's, I think the opportunity is there. I don't think there's going to be one or two things you say, that's what did it for DC. I think it'll be incremental. I think we'll be depending a lot on the private sector, the private developers who are going to come in and help create some space that we think invites people into downtown.

Alan: But I think it's really important for everyone in the whole area to be supportive of it.

John: I agree. I mean, whether it's an interesting dynamic when you have Northern Virginia, which has its own right desires, economic and else. You have Montgomery County, Maryland, you have Prince George's County. DC, everybody has their own sort of thoughts on what they desire and what their incentives are. But you have to recognize that DC is the center.

Alan: Right. It's why we're all here. 

John: And it's why we're all here, right? And so, I think there's got to be a community of support around DC. I agree. Yeah, I was downtown last Friday. Meetings finished at 4:30 and I walked outside. I had to walk five blocks to my car. Years ago, you would have heard horns blaring, people screaming, traffic. Everyone's trying to get out of downtown. It's Friday, it's 4:3/5 o'clock and streets were empty.

Alan: Yeah. Fridays especially.

John: Yeah. And it just felt it didn't, felt a little bit of a…

Alan: Yeah. So, I saw PNC yesterday and said that they were calling all employees back to work five days a week.

John: Yeah.

Alan: So maybe other companies will start doing that too.

John: Right. I think that helps.

Alan: Oh yeah.

John: You know, I think that helps with on a number of fronts. Any other predictions for the future that you feel very confident about or predictions that you might feel unsure about or?

Alan: This is totally unrelated to what most of what we're talking about, but in the business sense, I think you're going to see a mini wave of bank consolidation this year. That's my bold prediction for the local economy. It was kind of expected last year, it didn't really happen, but it's going, it's happening nationally. The climate is very favorable for this administration, very favorable for M&A. And there's a lot of banks out there kind of chasing the same deals and a lot of them need scale. You have some CEOs who are nearing retirement. So, from the local business community, in the local business scene, I think that's one of my big predictions.

John: I haven't heard the details on the bank M&A. What I have heard is there is a very, very positive sentiment throughout the business community about what 2026 has in store. A lot of folks feel like the groundwork has been laid for a lot of economic growth. I've heard some predict GDP 5 to 6% for the year. Inflation- 

Alan: In this region?

John: For the country.

Alan: For the country, okay.

John: Yeah, inflation remaining below 3%. Yeah. I think a lot of people feel like when Powell leaves in May, that sets the stage for maybe future rate cuts, whether you agree with that or not. And the Fed being independent or influenced by the president is one thing, but I'm getting a sense that there's a lot of optimism and its no longer just optimism.

Alan: I agree. I think--six months ago, it was you heard there was a lot more trepidation right from business leaders, but I think now they understand this is the world we live in now, and they're learning how to adapt and to navigate it. And so, I think you're right. I think there's the I'm feeling I'm hearing the same thing. I'm definitely, I'm definitely sensing that same kind of optimism. I do think the growth here is going to lag a little bit, though, for the next couple of years. And I think even the DC CFO is, said that the city is going to certainly lag national GDP for a couple of years until it can absorb all these jobs. So, but I mean, in general, I think there is a feeling of optimism.

John: I do think Washington DC for the near term will be perceived as the city of uncertainty.

Alan: Yeah.

John: Because you just don't know what you're going to wake up to tomorrow.

Alan: Yeah.

John: So maybe it makes, it's good news for you. It's a lot for you to cover.

Alan: Exactly. Like we have, yeah, there's never, there hasn't been a shortage of news for us to cover, for sure.

John: Yeah. Great. we'll wrap up. I've got one last question for you can share with our audience. I like to ask this question to folks. If you, as you've started your career, would have taken a completely different path, and I mean a non-traditional business path.

Alan: So, does it matter if I like…being paid money?

John: No, it doesn't matter. No, it doesn't mean you're successful or unsuccessful.

Alan: No, family to support or anything like that.

John: No, you're single, you don't have bills, you can do whatever you want.

Alan: I would have been a ski instructor. And maybe more specifically, I think I would have been a helicopter ski instructor.

John: Yeah. And that's something you've not an instructor, but you've heli skied numerous times, correct.

Alan: I've done it three times. Yes, in Canada and New Zealand of all places.

John: Right. Yeah. Well, that would be quite the lifestyle.

Alan: Yeah, so yeah, that wouldn't be so bad. Is it too late for me? Sixty-one years old? No, I could. The old man ski instructor. Yeah.

John: You'll have a different clientele.

Alan: Yeah, exactly. All right.

John: Well, great. Well, Al, thanks for being with us today. I thought we've had a great, insightful conversation. There's a lot going on. My final prediction is that by the time we end this and check our phones, there's going to be a new headline, something else for you to cover.

Alan: Yeah, I need to get back to the office.

John: Yeah, absolutely. Well, thank you very much.

Alan: Thanks.