It's only a warehouse in Southwest Washington, but to Julien J. Studley, it's a symbol of where Washington's commercial real estate business is going.

Chicago's Merchandise Mart is planning to buy the seven-story structure at Fourth and D streets SW and turn it into a wholesale center with showrooms for 200 to 250 merchants.

The decision of the Merchandise Mart to move to Washington reflects the most important new trend in District of Columbia real estate, says the president of Julien J. Studley, a commercial real estate firm with offices here and in five other cities.

The Merchandise Mart is coming to town not to be near the seat of government, but because "more and more, business is beginning to recognize that Washington is the place to be," said Studley, who gathered executives from his six offices here last weekend for an annual business conference.

"Companies are looking at Washington as a place to put important operations," added Studley. "As time goes on, the Washington area will be less influenced by government."

The bureaucracy's demand for office space is no longer the driving force behind the Washington area's commercial real estate market, he said. Nor will the future of the market be dominated by businesses geared to government, such as the so-caloled "Three A's" -- accountants, associations and attorneys.

The Merchandise Mart's migration to Washington, its first step out of Chicago, "is an extremely strong endorsement for this ciry," Studley said.

The Chicago Mart is owned by the Kennedy family and is a $5 billion a-year operation that houses 26,000 workers in 97 acres of showrooms. The Washington Mart, a 430,000-square-foot center for 500 workers, will be a mere bud on the family money tree.

Washington's Redevelopment Land Agency plans to hold a hearing next month on the sale of the city-owned warehouse and property adjacent to the Mart. Plans call for building a 190,000-square-foot adddition to the present 240,000-square-foot warehouse.

Studley said more than half the showroom space already has been spoken for.

Besides the Merchandise Mart, he cites these examples of the trend toward businesses setting up major operaitons in the Washington area: the leasing by Gannett Company Inc. of 10 floors of a building under construction in Rosslyn, the move of Time-Life books to Alexandria a few years ago, anbd the ongoing shift of Mobil Corp. management to their complex in Reston.

"I think you will see more things like that," Studley predicted, saying the Washington area will continue to draw such firms because of "the terrific business environment."

The District and its Maryland and Virginia suburbs have managed to strike a delicate balance between the development philosophies of the Northeast and Southwest, he contends, a balance between restriction and encouragement. Local development regulation is somewhere between that of Houston -- "where you can build anything, anywhere" -- and Boston, "where you can't get anything done," Studley said.

The Studley firm has offices in both those cities. Its headquarters is in New York, but Washington is the biggest and most active office, accounting for about 40 percent of the company's business.

The firm publishes biweekly reports on office space, and Studely said Washington still has a backlog of demand, with little evidence of overbuilding.

Suburban office buildings with rents half those in downtown Washington are providing competition that relieves some of the pressure on rents, Studley said. "I don't see rent increases continuing at the same percentage rates. I see more even increases, more closely related to the rate of inflation."