Republic Properties Corp., a District-based developer, has started construction of a large office building, the third part of its Portals site development in the city's Southwest quadrant, company officials said yesterday.

Officials of Republic Properties, best known for developing Georgetown Park and Washington Harbour, said they do not have a major tenant for the space. But they decided to proceed anyway because of the improving economy and growing interest in Southwest by a number of other developers.

The Portals site is bounded by D Street SW on the north, 12th and 14th streets on the east and west, and Maine Avenue on the south. It sits in the Southwest area that city planners have long targeted for high-end housing, shops and offices.

Republic Properties launched the Portals project more than 20 years ago. The development is supposed to contain 3 million square feet of office, retail and hotel space by 2010.

The first phase was launched in the late 1980s, when Republic Properties built an office building that now houses the insurance giant CareFirst Blue Cross and Blue Shield and the Department of Energy. The second office building at the Portals was built in the 1990s and is the headquarters of the Federal Communications Commission, which fiercely fought efforts to move it there.

This spring, the 400-room Mandarin Oriental Hotel, a luxury complex, opened at the Portals complex, although it was built by a different developer.

The new building will be 500,000 square feet. It is unusual for a developer to begin construction of such a large office building without a major tenant. But Steven A. Grigg, president of Republic Properties, said: "We believe it's a good time to do it because there's an uptick in the employment numbers and we've got the financing in place."

"You're seeing the private sector come into Southwest," said Peter J. Cole, a senior vice president of development at Republic Properties. "JBG is there; [Charles E. Smith] is there. They give us comfort to see they too are investing and seizing the opportunity that is in Southwest. We're becoming more of a frontier developer."

JBG Cos. of Chevy Chase is upgrading L'Enfant Plaza, where it persuaded the Capital Children's Museum to move. Developer Charles E. Smith is trying to lure Fannie Mae to a building it owns near the Southwest waterfront as part of its plans to spruce up the Waterside Mall. Boston Properties Inc. and Trammell Crow Co. are also building large office projects in Southwest.

Some developers working in the area acknowledge that demand for office space in Southwest may not keep up with the growing supply. In the next three years, about a quarter of the office space that is expected to be built in the city is being built in Southwest.