Washington,
DC
ACCORDING TO A REPORT BY DELTA
Associates, overall economic conditions
in the Washington, DC area are sturdy,
with new jobs continuing to come on
line and the metro area ranking seventh
among US cities in terms of job growth.
Local businesses added 41,900 new
positions between October ’06 and
October ’07. The suburbs of Northern
Virginia account for 48% of all new
payroll positions, the report says.
Professional and business services
are likely to lead job growth, Delta
relates, with government contractors
and law firms leading the charge. If a
Democrat is elected president in
November, the firm adds, government
procurement spending could shift
away from Virginia’s defense contractors and toward Maryland’s health
contractors.
The DC area remains one of the top
investment markets in the country.
According to Delta, a Transwestern
affiliate, the top four real estate investment vehicles in the metro area are
class B CBD office buildings, indus-trial/distribution facilities, class A high-rise apartments and grocery-anchored
shopping centers. Cap rates increased
by 25 basis points for all product types
in 2007, after declining 326 basis points
since 2002. Hotels saw the largest cap
rate increase— 66 basis points—while
grocery-anchored shopping centers
were up only 10 basis points. Delta
expects cap rates to keep rising in 2008,
albeit modestly.
Institutional investors continue to
demonstrate a strong interest in DC-
area properties. However, Studley
reports the market is slowing overall,
which means a growing disparity
between the submarkets inside and outside the Beltway.
The Washington metro area’s net
office absorption in 2007 was 5. 4 million sf, down from 6. 8 million sf in
2006, says Delta. This pushed the overall vacancy from 8.5% to 9.1%.
Nevertheless, rents rose 2.2% in 2007.
CB Richard Ellis points out that a
sharp drop in federal government
demand in 2007, coupled with economic uncertainty, led to the dramatic
reduction in leasing volume as well as to
a decrease in average lease size. The
decline was so sudden, the firm suggests, that developers had no time to
adjust their pipelines—and the consequences for 2008 remain uncertain.
Currently in the development
pipeline is 20. 6 million sf, up from 16. 8
million sf the prior year—but only 28%
A New Networking Event for a New Real Estate Economy
Introducing JUNE 3, 2008
Grand Hyatt, Washington, D.C.
Agenda Topics and Featured Sessions Will Include:
• Town Hall Meeting: The State of the Green Buildings Market
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• Corporate Perspectives: Tenants Discuss the Importance of Green
• Smart Growth: Managing Best Practices in Design and Expansion
• From The Ground Up: Greening Up During Construction
• Green for Green: Financing and Investing in Green Buildings
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• Networking Breakfast, Luncheon, Refreshment Breaks and Cocktail Reception
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FOR MORE INFORMATION GO TO: www.realshareconferences.com/green/
PRODUCED B Y: Association Sponsors:
