D.C.-based Monument Realty LLC is one of the most active developers in the region. It has 2 million square feet of office space and residential units under construction or expected to break ground in the next six to eight months in Northern Virginia and downtown D.C. That makes it fairly bullish compared with many competitors, who fear the regional market may not continue to climb back from the trough it fell into in the last recession. Michael J. Darby, one of the principals of Monument, talks about real estate.

QWhat is going on in the real estate market now?

ARight now, everybody is trying to get as much done before something happens. I don't think they know what that something is, but they think something could happen. If there are major changes in the national economy, that could have an effect. I don't think it's going to happen quickly, but people are scared it could, and they're worried about the implications.

What are the implications?

D.C. is such a buoyant market, and a lot of people are enjoying that. If you get an economic downturn, it affects them and that's not a good thing. There are people who feel that residential pricing on condos, especially, is escalating too quickly. We see more investors buying condos, and they need to sell or rent them. The question is: Are there enough renters for the units? I don't think anyone in Washington knows.

What's the future of the real estate market look like?

If people believe things are going to keep going, they'll keep buying. If they get nervous, they'll stop buying. Right now there's a fevered pitch with buyers and investors [on condos]. People are telling stories of buying a place for $300,000 and flipping it 12 months later for $400,000. They put 5 percent down, and it turns into 20 times what they planned on making.

Can that intensity keep going?

It's going to get to a point where people just can't afford these units. We are starting to see people who are having sticker shock at the pricing. But then just when you think it's going to get hard to sell the units, you see three or four people coming behind the sticker-shocked guy to buy. People are moving downtown. They value their time and they're sick of commutes.

What is going on in the office market?

That's been a lot steadier and more normal. Right now, we're in a kind of hold mode. People are still waiting to see what happens with the elections, so things are slowing down. People are asking themselves, "Is the economy going to be okay? Can I afford to hire new people?" Along the Dulles Toll Road, there's a lot of vacant space, but not a lot of large blocks. There are still large companies which are expanding and they're looking for buildings. It's coming to a point where people are starting to scratch their heads and say, "We're running out of space. It's time to build new buildings."

What's happening in the D.C. office market?

In the District, it's trickier. There are lots of small blocks of space available. But for those looking for bigger chunks, that's hard to find. Look at Fannie Mae. They got creative and are going to Southwest. People are willing to go to areas that haven't been considered prime areas before.

So how is all of this going to affect the tenant?

The downtown D.C. office market is always tight because it's hard to throw up large amounts of office space quickly. Unlike in Northern Virginia, where when there was demand, there were buildings popping up everywhere. There were no limits to the number of buildings that can go up.

What are tenants facing then?

If you're a tenant, you don't have a massive amount of buildings to choose from. So if you're a bigger tenant -- looking downtown -- you've got to make a decision early on what size of space you'll need. If you're in Northern Virginia, and you're willing to choose from several locations like Tysons Corner and Dulles, then you will find there's space available. There are people who have been sitting on property and buildings who are ready to negotiate.

Closings

SRA International Inc., a government contractor, signed a lease for 191,000 square feet at 3434 North Washington Blvd. on George Mason University's campus in Arlington. Its 3,400 employees are now spread out in several office buildings in Arlington and Alexandria. Their new building will be done in July 2006.

The company was represented by Studley, a large brokerage firm.

Dana Hedgpeth writes about commercial real estate and economic development. E-mail her athedgpethd@washpost.com.

More investors are buying condos, said Michael J. Darby, a principal of Monument Realty LLC. Below, a rendering of Monument Realty's Odyssey Condominium, under construction in the Courthouse section of Arlington.