While office-space leasing downtown continues to be strong this year, Maryland and Virginia are overbuilt, according to one study.
In a recent report, the Washington Board of Realtors said construction of new buildings scheduled for occupancy in 1981 and 1982 is "not sufficient to meet the average demand for quality office space of approximately 2 million square feet per year."
Joel R. Cannon, chairman of the WBR commercial leasing committee, said high interest rates, excessive costs for construction and high land costs are "inhibiting the delivery of new space."
The same report indicated, however, that new buildings scheduled for completion in Maryland and Virginia suburban locations "may exceed the average demand." But it was noted that suburban projects located close to major transportation corridors and adjacent to Metro stations "have leased very rapidly."
Julien J. Studley Inc., whose Washington office handles leasing of office spaces, tended to agree with the WBR report. Studley said District leasing through April totaled 511,002 square feet of space in new buildings compared with 465,700 square feet leased during that same period in 1979.
Leasing activity in suburban Maryland is "quite different," Studley said. It was pointed out that 106,600 square feet of space is available for immediate occupancy and that 1.9 million square feet of new space will be available by the end of this year. Nonetheless, 558,388 square feet of new space was leased through April compared with 426,573 square feet in the same period in 1979.
In Northern Virginia, where millions of square feet of new office space has been created in recent years, Studley reported leasing in the first four months of 1980 to be 775,000 square feet in the same period in 1979. f
The report from the Washington Board of Realtors indicates that 1.2 million square feet is available through 1980 against a total expectancy of 2 million square feet being constructed in the District.
The WBR report for 1981 indicates 1.9 million square feet of new space being completed, of which 1.8 million square feet is available. In 1982, the projection is for 1.6 million square feet of new office space, all of which is currently available.
Available space in Northern Virginia and suburban Maryland will be considerable in both 1981 and 1982, according to the WBR report.
Increased construction and financing costs, coupled with escalating operating expenses, have pushed future leases in the range of $20 a square foot in prime District locations. Generally, suburban leases are between 25 percent and 30 percent less.