Rents for office space in downtown Washington doubled between 1975 and 1980 from $9 to $18 a square foot and are expected to double again by 1983 to between $32 and $38 a square foot, according to a report recently presented to more than 300 area real estate professionals by James B. O'Brien, first vice president of Coldwell Banker, and other staffers from the commercial brokerage.
The Coldwell Banker report also estimated that rents for prime new office space in Washington will be six times higher by 1985 than the average $6 to $7 price prevailing in 1970.
The leading leaser of downtown office space is the federal government, according to the Coldwell Banker report. In descending order of importance, other major leasers are nonprofit groups, attorneys, accountants, consultants, banks and communications concerns.
The difference between average downtown and suburban office rents was $1 a square foot in 1975 but had risen to $5 to $8 by 1980, according to the report.
The differential was projected by Coldwell Banker as likely to increase to over $16 by 1985.
The report estimates that downtown Washington has 46 square feet of office space, as compared with 44 million square feet in the suburbs.
Suburban space now is increasing at a rate of more than 4 million square feet annually, although only about 3 million feet each year are being absorbed.
Thus, Coldwell Banker predicts a decline in 1982 in construction of new office space in Maryland and Virginia.
Growth areas for office space there currently are concentrated in Montgomery County and in Arlington-Rosslyn, Crystal City and Tysons-McLean.
In terms of industrial real estate, the Washington area as a whole now has an estimated 105 million square feet of industrial space occupied mainly by firms using more than 10,000 feet each, according to Coldwell Banker.
High-technology firms now comprise 65 percent of the users of these low-rise, quasi-office-industrial buildings that have become "viable, lower-cost alternatives to pure office buildings."
Almost all future expansion in this type of real estate is expected to be outside the Beltway but near it.
In contrast to reasonably upbeat forecasts for most other types of commercial real estate, Coldwell Banker's report was far less optimistic in terms of apartment and retail development.
Construction of new rental apartments is termed not feasible economically; owning and operating rental apartments is less profitable because operating expenses increased 47 percent over the three-year period from 1977 to 1980 while rental income increased by only 34 percent during the same period.
Construction of new apartments would require rents of $750 a month to become economically feasible, but the figure is nearly double the average $405 now charged for a rental apartment in this area.
Coldwell Banker indicated that rapidly growing pension funds hold the key to the financing of future commercial real estate development. He said the goal of those funds is to increase holdings in real property to more than $100 billion by 1985.
In the Washington area, Canadian investors -- along with West German, Dutch, French, British, Japanese and Middle Eastern -- interests -- are the most active in commercial real estate investment.
A Canadian firm has a major stake in the Investment Building here and other Canadian investors are active in office and apartment building redevelopment.