The rising tide of prices asked for yet-to-be-completed downtown office space has fallen in the past 60 days, mortgage banking executive Mallory Walker said this week before the area chapter of Lambda Alpha, a professional group interested in land economics.

Walker, the principal officer of Walker & Dunlop, added that expectation of continued inflation has contributed to fast-escalating office leasing rates in the past few years.

He also told the group that record land prices recently paid for development land in the old downtown area east of 15th Street NW are so high that leases in the range of $30-$35 a square foot per year must be signed to be economically feasible for developers and lenders.

Walker said that the main concern of lender-investors in commercial property now is hedging against future inflation, plus obtaining enough equity to be protected. He stressed the rising role of pension funds as sources for real estate development equity capital or mortgage loans. He added that foreign investors increasingly are important to realty development but that those off-shore investors tend to be "unpredictable."

Meanwhile, a report from an intercity office leasing network has reported that downtown space availability is far below the national average but that suburban office space is above the average.

The Office Newwork Inc., which includes firms from 17 major cities, reported that Washington and Los Angeles have only 0.3 percent availability in their central business districts. Average space in central districts climbed from $17 a square foot to $22.65 in the past year. Downtown rates here now reportedly are averaging $22. For uncompleted space, the figure is slightly higher.

Fernando Barruetta, of Braedon Companies -- the network affiliate here -- said that the 17-city report showed that Washington, Houston and Dallas have the highest growth rate for new ofice space, eclipsing both New York and Chicago. He said Washington, Houston and Dallas accounted for 43 percent of all new office space leased last year.

A report from Julien J. Studley Inc. showed 482,965 square feet of office space leased during January and February in the District, with 93 percent of that space being in new or uncompleted buildings. Studley's Stephen Goldstein said that many of the new lessees are small tenants who are expanding and relocating. The January-February leasing total was 20 percent more than the space leased in the previous two months.

The Donohoe Companies, which is developing a major commercial project at 500 C St. SW announced recently that it has leased the 298,000 square feet in a nearly completed building to the federal government for a total of $40 million. The 10-year lease for the space in the Federal Center Plaza was described as "the largest government elase made in the Washington area in some time." The rate of $14.65 per square foot does not include utilities or parking. The General Services Administration has not divulged the government agency that will use the space, but there is speculation that he Federal Emergency Management Agency will be the tenant. Occupancy is expected to begin in late spring. A second office building has been started by Donohoe in the complex that already includes a Holiday Inn.