High-end apartments planned in Alexandria.

Byline: William Morris

Developer Rob Thompson isn't worried about finding renters for his company's new apartment building in Alexandria.

Thompson, founding partner at Alexandria-based GoodNeighbor Properties, said there isn't anything currently in the city like what GoodNeighbor has planned: a 75-unit mixed-use building with above-market rents and top-tier amenities. But although GoodNeighbor's project will be the first at that level in the city, he suspects it won't be the last. According to market studies, the project will only meet about 20% of the demand for this tier of housing.

"There's a lot of apartments being built in town right now, but through 2018 the vacancy rate for Alexandria for apartments overall was less than 1%," Thompson said in an interview. "There's probably 200, 300 apartments being built now to fill that need, but they're mostly market-rate or low-income."

GoodNeighbor has a high-profile location for its project as well. The building will replace a vacant restaurant building on 2.31 acres in the southeast quadrant of Broadway Street and Third Avenue East, which Thompson said is the busiest intersection in the city of more than 13,700. It's within two blocks of Copper Trail Brewing, the Legacy of the Lakes Museum, the city tourism office and the downtown shopping district.

"It's kind of a cornerstone of the city, so this will be a premier project to showcase that cornerstone property," Thompson said.

Thompson estimates construction costs for the project will be $14 million, with total development costs of around $23 million. The city earlier this year approved a $3.9 million tax increment financing district for the project, and on...