The English, Dutch and Canadians have surrounded the White House, and the British have taken over the Board of Table building. The Japanese are in the fields of Olney, and Germans have landed on the Eastern Shore.
In short, well-financed foreign developers and investors are continuing their impressive invasion here, and real estate experts here see them as a permanent and increasingly important factor in the Washington market.
New signs of this are appearing every day. Jones Lang Wootten, a British firm that calls itself one of the oldest real estate advisers in the world, is planning to open an office soon in Washington, the sixth U.S. city it has entered. This is a good indication that the firm's foreign clients see this as a prime area for future investments.
Foreign interest in property has risen rapidly throughout the country. Last year for the first time real estate overtook manufacturing as the major U.S. investment by foreigners, according to the Commerce Department's International Trade Administration.
At the same time, international purchases of real estate will be made easier throughout the United States and around the world when a new computerized international property listing, called REINET, is inaugerated this month by the National Association of Realtors.
No one is quite sure just how much of Washington is owned by foreign interests, and the best guesses of the experts now range from under 5 percent to perhaps 15 percent of all the buildings in the city--and on the rise.
Canadian developers have advanced the most aggressively here. Their investments spread from huge commercial building projects at 13th Street and New York Avenue NW and on the Pennsylvania Avenue redevelopment corridor, to ownership of the Four Seasons Hotel in Georgetown and massive residential/commercial complexes planned in Fairfax County. One Canadian firm, Trizec Corp. Ltd., last fall bought a 25 percent interest in the Rouse Co., the Baltimore developer that built the new town of Columbia.
Western Europeans, predominently large institutional investors such as British and Dutch pension funds, form the second-largest block of foreign real estate interests here. They have captured partial interests in L'Enfant Plaza as well as in that prominent American political landmark, the Watergate complex.
"Washington is a very exciting place for many of the institutional clients we have," Jones Lang Wootten partner Larry Baucom said. "It looks like a European city; its height restrictions give it a European flair. It's a very important city in our plans of expansion throughout the U.S."
For the first half of 1981, the ITA identified $3.8 billion in foreign investment in real property throughout the U.S., representing an increase of 41 percent of aggregate value over 1980.
The figures are tiny compared with what Americans put into real estate, but experts also say all the official numbers grossly understate the true level of activity, because much foreign investment escapes disclosure.
At the same time, several experts see the level of foreign investment in the United States stabilizing now and foreigners becoming more cautious in their purchases. This is because the dollar has strengthened--cutting out profit gains merely from favorable exchange rates--and because of the recession, they say.
One of the most recent purchases was the Board of Trade building on 20th Street between L and M streets NW by the Prudential Life Assurance Co. of London. A couple of blocks away, a French banking group bought another office building in a prime downtown location, at 1019 K St., just two weeks ago, according to Mallory Walker at Walker & Dunlop.
Within a cannon shot of the White House, the Dutch-owned Savage/Fogarty firm of Alexandria is developing a 10-story building at 18th and H streets and is building another 12-story one at 1023 15th Street. Last year the Walker Building on 15th Street adjacent to the Treasury Department was bought for about $10.5 million by British pension funds through American Property Trust. Olympia & York, a privately held Canadian firm that likes to keep a low profile, last year bought the Investment Building at 15th and K streets NW.
The specter of the oil-rich Middle Eastern investor gobbling up unlimited amounts of U.S. property with petrodollars is largely a myth, experts say, at least in the Washington area. But these same experts warn that Arabs take pains to keep their purchases secret so there may be many more of these deals than are readily known.
The rising foreign presence in this increasingly international city generally is welcomed by city leaders, who see the fresh sources of development capital as a boon. Some locally based developers have viewed the incursion with some apprehension--and say that commercial land prices soared because of extravagent foreign buys--but several are trying assimilation and have joined the newcomers in ambitious international teamwork here.
Most foreign investors are interested in commercial properties such as office buildings, shopping centers, hotels and apartments buildings. But more are starting to get involved in building homes.
A British company, operating here under three subsidiaries--Globe U.S.A., Hilbery Chaplin Inc. and Tristar--since 1978 has built several subdivisions near Burke, with names that all start with "Georgian." The firm soon will expand to Maryland, according to Bruce Berlage, Globe executive vice president.
The sun never sets on one truly cosmopolitan partnership, formed in 1981 by firms from Great Britain, Japan and Baltimore. Through the Baltimore firm, IMG Homes, the partnership is building eight housing developments in the Washington suburbs, including a huge, mixed-use complex in Olney called Town Center that is to include 727 homes, with sales expected to start in 1983.
IMG President Douglas Nyce sees foreign investment soaring during this decade.
"Whatever has happened so far will pale with the flood tide of the '80s," he said.
One major advantage of working with foreign partners is the longer-range view and patience in making profits that he and others cite as characteristic of foreign investors. Only with that attitude could his British and Japanese partners, Y.J. Lovell Ltd. and AOKI Construction, invest in housing during the current deep slump, Nyce said.
Other local developers are getting involved in more joint ventures with foreign firms, as well. Among these are developers Gary and Scott Nordheimer, who are partners with Olympia & York in a conversion of Arlington Towers in Rosslyn to the River Place cooperative. Across Rte. 50 at the Prospect House condominium conversion, they are partners with Cadillac-Fairview, a Canadian development firm.
Julian Josephs, a British investment adviser, has put together joint-venture interests and second-mortgage loans on four properties, with Dutch investors providing the funds for projects with Washington developers Rozansky and Kay. These include office centers at Tysons Corner and in Bethesda.
Developer David Evans is one of the few local developers who says he has been involved with Middle Eastern investors, having bought three properties in a joint venture with them.
Coakley & Williams Inc., another locally based development firm, has had talks recently with German and British investors about joint ventures on commercial properties, company officials said.
Why is the Washington area attracting so much foreign money? The most frequent reason named by investment experts is Washington's economic stability and its heavy service sector, which is seen as having a better future than manufacturing.
"They want to be in a stable area, and Washington is considered stable," said Jullian Redele of Savage/Fogarty, which invests European money in commercial buildings and development. "People who used to go to New York are now coming to Washington."
Savage/Fogarty, which began business here as a locally owned property management firm, has more than $100 million in development in progress in this area, and Redele said it plans to significantly increase its operations here.
Others have recently intensified their efforts here, as well. Two Canadian firms, Costain and Cadillac-Fairview, last year separately bought huge tracts of adjoining land in Fairfax County along the Beltway at Rte. 50 on which they plan to build large office, housing and shopping complexes.
Cadillac-Fairview finally made its presence in Washington official in 1981 by opening an office here. Costain has built homes in the Virginia suburbs since 1978, including one at Lee's Crossing where the company evokes the "distinctive history" of General Lee marching to Antietam in selling its Colonial and Plantation-style homes. The firm expanded into commercial operations here for the first time last year.
Among the major commercial investments that have been made here by foreign investors, according to government records and interviews with commercial property experts, are these:
Cadillac-Fairview has perhaps the largest development in the city at 1001 Pennsylania Ave. NW, where it soon plans to break ground on a $160 million, 15-story office and shopping complex.
Daon Corp., another large Canadian firm, has planned a $180 million, 730,000-square-foot project at 13th and New York and intends to "change the face of New York Avenue," according to Dave Rathe of Daon. It also is involved in converting the Westchester Park apartments in College Park to condominiums.
Savage/Fogerty's investments here include the planned TransPotomac office complex on the Potomac River in Old Town Alexandria, a 12-story office building set for 1023 15th St. NW, and the conversion of the 304-unit Auburn Village apartments in Alexandria to condominiums.
Political turmoil abroad is named as one reason foreign investors chose the United States, according to experts in the field. The Thatcher government in Britain now is allowing funds to leave the country, so much is coming here. The Mitterrand government in France has tried to stop the outflow of capital, but many French investors are said to have pulled huge quantities out as soon as the Socialist president was elected.
Marika Sumichrast of the Homer Hoyt Institute, a land research organization here, says that many Germans, including from the eastern sector, are buying large chunks of property on the Eastern Shore of Maryland as a sort of haven. Sumichrast herself left Europe in 1948 to repatriate in the United States.
"I know how they feel. You live more defensively. All of these people know what it's like to lose property."