The Washington metropolitan area "continues to enjoy a spectacular real estate market" despite a depressed regional housing market, according to a report authored by local real estate analyst Gary J. Kopff and recently released by Laventhol & Horwath.
The industry's strongest sector remains the booming office market. Washington, with 46 million square feet of space in the central business district, now ranks third behind New York and Chicago in downtown office space, the report says. Construction has been spread over a wide area of the city due to local building ordinances that limit the height of buildings to 130-160 feet. New office additions to be delivered by the end of next year will exceed 20 million square feet, "thus increasing total space in the entire metropolitan area to 90 million square feet." The vacancy rate for completed office space in Washington has dropped to less than 0.1 percent, a level matched only by San Francisco.
Development in the business district is "moving dramatically eastward from 15th street NW," the report notes, referring to a recent landmark auction of property at 14th street and New York avene that brought the sellers $535 a square foot. Suburban development in widely dispersed corporate office parks, such as McCormick Properties' new complex in Largo, in areas surrounding future Metro stops, and in Alexandria "marks a departure from the 1970s when a high percentage of all new space was concentrated in the 'office towns' of Rosslyn and Crystal City."
Concerning the regional housing market, Kopff attributes a decline in the metropolitan area's total population and an increase in the number of small households as factors contributing to making Washington the nation's leader in condominium conversions.
Future prospects for the Washington real estate market, Kopff predicts, "are rosy indeed." If the current real estate boom does collapse, "the real culprit will be interest rates that affect the entire nation," he says.
Arthur Rubloff & Co. has been appointed exclusive agent for the subleasing of 125,000 square feet of available space on the top five floors of 400 Army Navy Drive in Arlington. The 10-story structure is the closest private building to the Pentagon. It was built for highest security, and is approved for top secret presentations.
The National Press Club has leased three floors at 1319 F St. NW, where Julien J. Studley is the exclusive leasing agent. The building, developed by Rozansky & Kay Construction Co., is one of the first buildings in the new downtown area to be renovated that is not under the guidelines and control of the Pennsylvania Avenue Development Corp.