Not unlike the trend here, business rents in the central business districts of major U.S. cities are rising. As a result, less expensive, readily available space in rapidly growing suburban office areas is becoming the only competitive alternative.
For instance, Perpetual American Federal S&L recently announced that it plans to relocate its fiscal operations division to a new complex in Alexandria next year. About 325 employes will be affected by the move. And the area's largest S&L also plans to redevelop its own headquarters site at 11th and E streets NW with an office-retail complex of nearly 300,000 square feet, replacing a building that now had 75,000 square feet.
District property values in the once-depressed downtown area have been escalating wildly in recent months because of convention-center construction in the old part of downtown and rejuvenation along and north of Pennsylvania Avenue between the White House and Capitol Hill.
On a national basis, Dun's Review reported recently that prices for office space have more than doubled in the past five years to an average $17.59 per square foot in existing buildings and $22.45 in buildings being completed. The rates are slightly higher in prime locations in downtown Washington.
While land and construction costs have risen sharply, some major lenders -- especially insurance companies acting for pension funds -- have become partners in prime new office building projects in major cities.
One of those firms is Equitable Life Assurance Society of the U.S., currently involved as a partner and lender for the three-phrase International Square office complex at 18th, 19th, I and K streets NW; the newly started Metropolitian Square at 14th, 15th, F and G streets; and the newly completed Westbridge office building at 25th and M streets NW.
All have been built in conjuction with developer Oliver T. Carr, who also have a joint venture with Equitable for an office complex over the King Street Metro station in Alexandria.
For the past 13 years, Robert L. Blakeman has been divison manager for Equitable in the Washington area. Blakeman, who now is completing 25 years with the third-largest U.S. life insurance firm, has had a hand in part of Equitable's many investments in Washington-area real estate and financing of major projects. The firm's loan portfolio here includes nearly $790 million in outstanding investments.
Currently, Equitable also is committed to a joint venture on the Vista International Hotel being built next to the Madison Hotel on M Street, just west of Thomas Circle. The circle's southwest quadrant is being redeveloped. The new 420-room hotel, for which International Developers Inc. is codeveloper, will be a $50 million structure with a 420 rooms. Completion is scheduled early in 1983.
Giuseppe Cecchi, president of IDI, which has been associated with Equitable and Blakeman in other projects (such as the Rotonda and Montebello condominum complexes in Northern Virginia), said Blakeman is a man who understands both financing and marketing. "His opinions are always worthwhile and I like to pick his brains," Cecchi added.
Elsewhere on the land, building and leasing fronts:
Coldwell Banker announced the sale of the property at 918 10th St. NW for $2 million from the Expeedite Service Inc. to New Center Associates, a Washington development group that plans to replace an older building with a new one.
Julien J. Studley Inc. announced Paul, Weiss, Rifkind, Wharton & Garrision, based in New York City and one of the 25 largest law firms in the nation, has leased the building at 1714 Massachusetts Ave. NW for a Washington office.
The Charles E. Smith Cos. announced that Lockheed California Co. is relocating its Washington office to 12,000 square feet in One Crystal Plaza in Crystal City.
Shannon & Luchs announced that INSLAW will establish a computer facility in 11,000 square feet in the Washington Business Park development in Lanham, Md. Shannon & Luchs also said that the office building under construction at 1101 14th St. NW will be available for occupancy in February 1982. Already 46,000 square feet have been leased to Attorneys Office Management Inc., which provides sublet space for attorneys, accountants and other professionals.