Pick an intersection in downtown Washington, any intersection. Pick a spot in Tysons Corner, or Alexandria, or Arlington, or western Fairfax County, or Bethesda, or Greenbelt.
The signs of a commercial building boom are visible in virtually every quadrant. New buildings, concrete-and-steel skeletons and construction cranes are reshaping the area's skyline.
The development of office complexes, retail space, major hotels and business parks is occurring at a record pace throughout metropolitan Washington. Banks, insurance companies and savings and loans are bankrolling one of largest inventories of new office space in major metropolitan areas.
Although law firms continue to expand here, developers no longer depend upon the three A's -- attorneys, accountants and associations -- to absorb the bulk of office space. Builders are influenced to a greater extent today by the growing requirements of the communications and high technology industries, defense contractors, financial and health services firms and corporations in general that want a presence in the nation's capital.
The development fraternity itself has become larger, as major national builders continue to increase their participation in metropolitan Washington's development sweepstakes.
At least 15 million square feet of office space are under construction in the Washington area, according to a recent survey by Smithy Braedon Co. Another 16 million square feet are planned for 1986.
Massive outlays for commercial construction and the expected spinoff effects are giving a major boost to the economy. Local government officials and commercial real estate experts are extremely bullish about the building binge and the absorption of space in new office buildings.
"I don't think the [leasing] activity has ever been stronger," remarked Ken McVerry, vice president and resident manager for Coldwell Banker's suburban operations.
"Our leasing activity is as good as I've seen it in the 15 or 20 years that I've been in the leasing business," observed Smithy Braedon President James L. Eichberg.
"We don't see a slowdown," declared Joseph Edwards, president of the Prince George's County Economic Development Corp. "As a matter of fact, it's accelerating," Edwards said of the influx of new companies seeking office space in the county.
Forty-one buildings are either under construction or are on the drawing boards in Prince George's, once considered the backwater of the region's office market.
In Fairfax County, the economic development authority reports a six-month record for office-leasing activity. More than 2.1 million square feet of space were leased between January and July, resulting in a 27 percent increase in the average monthly absorption rate, the authority says.
Amid all the euphoria, a small chorus is chanting a warning about overbuilding. Some experts in the commercial real estate industry, in fact, are quietly raising caution flags over what they refer to as "pockets" of overbuilding.
Bethesda, for example, has become a hotbed of building activity, but Braedon, among others, acknowledges: "I don't know if the [tenant] demand is there."
Overbuilding of the office market "runs in pockets" but "the warning signs are out there," cautioned Thomas J. Owen, chairman and chief executive officer of Perpetual American Savings Bank.
Landauer Associates Inc., a major national real estate counseling firm in New York, notes that office properties have been the most popular real estate investment. Yet, "At the midpoint of the 1980s, the office market remains quite fragile, when viewed in nationwide perspective," said Frank B. McBrearity Jr., managing director of Landauer's marketing and financial services division.
To be sure, the Washington office market has escaped the glut that has buried several major U.S. cities in unrented space. The vacancy rate in the District, for example, is only 10.4 percent, compared with a staggering 16 percent average for the top 20 cities. While the vacancy rate in Washington's suburbs is slightly lower than the national average, the 15 percent rate outside the D.C. boundaries should trip some warning signals.
Currently, more than 23 million square feet of prime office space are available in metropolitan Washington. More than half of that amount is in Northern Virginia. In 1984, tenants absorbed 4.4 million square feet of office space in the District, 4 million in Northern Virginia and a combined total of 1.75 million in Montgomery and Prince George's counties in Maryland. Through the first eight months of this year, space absorption totaled 2.3 million square feet, 3.5 million and 1.6 million, respectively, in the District, Virginia and Maryland, according to Smithy Braedon's research division.
Expansion-minded companies continue to snap up space -- some of it at less-than-market rates -- in Washington's hot office market. The big question is: Will they continue to absorb space fast enough to ward off the overbuilding blues in a year or two?