Building an Awareness of Office Condos

JBG wants to build an office condo on L Street, Shister said, instead of a traditional office building because few developers are building office condos in the District and the market is less crowded with product. None of the condos has been pre-sold, but Shister said she has had inquiries from several nonprofit groups and two unions. Construction starts in the fall and the building is expected to be finished in December 2005.

Office condos have disadvantages for developers and tenants, too. If interest rates rise, it might price some buyers out of the market, taking the steam out of the business, said David B. Gast, a first vice president at CB Richard Ellis in Tysons Corner.

Tenants who outgrow their space may have trouble finding more next door. And if they cannot, it will not be easy to just pick up and move.

"It can cut down on a company's flexibility," said David Loeb, an analyst at Friedman, Billings, Ramsey Group. "Buying your office space is risky because it assumes you're going to be in business and occupying that space for the long term."

John Forrest, owner of New Dawn Distributing LLC, which sells soaps, brushes and equipment to car washes, said he stopped paying $2,000 a month in rent and bought a $385,000 space in a small warehouse in Herndon. His mortgage payments are about $2,500, but because he's locked in a low interest rate for 20 years, he said he will save money over the long term as rents rise.

"Owning it is a way of building some long-term equity, as opposed to making our landlord a little wealthier," Forrest said. "If our business doesn't continue, we could lease it or sell it."

Pressing for a New Hotel

A big professional association says it might not show up for a major convention in 2009 unless Washington gets another big hotel near the convention center.

The American Academy of Orthopaedic Surgeons is expected to bring 28,000 surgeons and other health professionals to the convention center at Mount Vernon Square in February 2005, then is expected to return in 2009. But the organizers say they worry that without a large new hotel next to the convention center, they will not be able to accommodate the 30,000 attendees for the second meeting, said Susan McSorley, director of convention and meeting services for the group.

Mayor Anthony A. Williams (D) and the D.C. administration are planning to build a big hotel next to the convention center to open around 2008. But in April local architect Ted Mariani proposed putting a hotel on the nearby site of the old convention center instead. The administration opposes that plan, but some council members say they want to consider it. While people on both sides confer, the administration said it expects to present to the D.C. Council by the end of the month a plan for financing its hotel.

McSorley, meanwhile, said the orthopedic group is to decide in a month or two whether to come to Washington in 2009.

Dana Hedgpeth's e-mail address is hedgpethd@washpost.com.