For two decades, Southwest Washington was largely ignored by developers, but in the past four years it has become a mecca for office development because of its cheap, city-owned land and proximity to the Capitol.
Structures comprising approximately 2 million square feet of privately built office, hotel and display space have sprung up in Southwest. The boom has come to the place that was the city's first urban renewal area.
The new development is concentrated in a small triangle bounded by Third Street, Maryland Avenue and the C&O Railroad tracks. Since 1980, three large buildings have been completed there and a fourth, just on the other side of the tracks, will be finished in February.
"For years, people thought of Southwest as a redevelopment area," said Lawrence Press, planning chief for the city's Department of Housing and Community Development. "Now it's finished."
Steve Goldstein, vice president of the Julien J. Studley real estate firm, explained the mini-boom in these terms: "The developers are able to buy the ground cheaper, so the rent is cheaper. The Metro access is convenient and, if you go to the right location in any one of those buildings, the view of the Capitol is spectacular."
Since the land in question was owned by the city, developers were able to buy it at below-market prices and did not have to pay to tear down existing buildings. The new office triangle is served by two Metro stations, one at Seventh Street and Maryland Avenue and one at Third and D streets.
As a result of the boom, office workers who used to have a choice of the basement cafeterias in their buildings, Danker's or the Market Inn for lunch now have a dizzying array of establishments ranging from the Vie De France bakery and sandwich shop at 600 Maryland Ave. to the continental fare of Smithson's Restaurant in the Holiday Inn at 550 C St.
At Federal Center Plaza, along C Street between Fourth and Sixth streets, the tenants are government agencies. The U.S. Information Agency, the Federal Emergency Management Agency, and the Federal Labor Relations Authority have come to roost here.
There also is the Capitol Gallery, at 600 Maryland Ave., which is filled with associations, public interest groups and other private organizations that like being close to the federal government buildings.
The Design Center, at Third and D streets, is something new in the forest of boxy undistinguished concrete buildings. The center is housed in an old refrigeration warehouse that has been transformed into a showroom of top furniture and fabric manufacturers.
The fourth building, the half-finished World Trade Center at Fourth and School streets, is rising on privately owned land that had been occupied by some one-story buildings built after 1960.
"The Trade Center is really an indication of the confidence the developers have in Southwest," Press said.
The confidence may be paying off. Gary Faigen, leasing agent for the Smithy Braedon Co., which is handling the Trade Center building, said that one tenant has already snapped up one-fifth of the nine-story structure. Faigen said that other organizations are showing interest. The building is scheduled to be completed in February, he said.
One reason for increased tenant interest is price, Goldstein said. Rents in the new buildings average $22 to $27 per square foot. That compares with a price of roughly $35 per square foot at Connecticut and K streets NW.
"I don't think you'll find the cream-of-the-crop law firms going to Southwest, but associations without a specific need to be in downtown will go there," Goldstein said.
The location, once a drawback, now is seen as a plus for groups that lobby Congress, according to some real estate brokers.
But the boom has not brought an increase in jobs for Southeast residents, said Gottlieb Simon, director of the Southwest Advisory Neighborhood Commission. He said ANC members have not been successful getting residents hired on construction projects or in finished buildings.