CPN - February 2009 - (Page 12)

MARKET INTELLIGENCE WASHINGTON, D.C., MARKET PROFILE ly has not found debt financing but is so far moving forward with equity in the meantime. Market sources disagree both on whether it will eventually obtain financing and whether it will be able to finish the project. Nonetheless, the lease represents one of several votes of confidence cast last year for the growing NoMa market. Another top lease was the GSA’s renewal of the Coast Guard’s headquarters occupation of the 592,000square-foot Transpoint Building at 2100 Second St.in the still-emerging Southwest district.The 10-year deal allows for a move after seven years and the Coast Guard is said to be planning an eventual relocation to the St. Elizabeth’s Hospital campus across the Anacostia River in Southeast Washington, where Mayor Adrian Fenty last year advanced plans for the mixed-use redevelopment of the 173-acre east campus to complement plans for the 183-acre west campus to become the future home of the Department of Homeland Security. Nonetheless, property owner Monday Properties sees potential for continued growth of the Southwest, anchored by a new ball field and further supported by residential and retail expansion, according to executive vice president Tim Helmig. Government expansion elsewhere has included the Federal Reserve Board’s recent expansion of its space Downtown from 30,000 to 90,000 square feet, according to Trammell Crow Co. managing director Tom Finan. The National Institutes of Health is seeking to consolidate a number of facilities in Montgomery County, Md., put in Cassidy & Pinkard Colliers senior managing director William Collins.The Department of Agriculture is also considering consolidation, he noted, as are several finance-related agencies. The FBI recently announced significant expansion plans, and local opinion is generally that the Washington, D.C., area will benefit significantly. Overall, job growth, while at half the level of previous years, remains positive,as 24,000 jobs were created last year, according to Transwestern executive vice president of tenant advisory services Pete Larson. And Collins noted that an increasing percentage of those jobs are in offices, which suggests that the jobs are in higher pay brackets, as well. Ten years ago, he noted, 40 percent of local jobs were in offices, but that number is now above 50 percent. Further growth may come as companies seeking to benefit from the execution of the Troubled Assets Relief Program expand or enter the market. So far, though, office leasing has been minimal—at 5.2 million square feet last year, its lowest level in a decade, according to Cushman & Wakefield Inc.—and a slew of large space users are seeking alternatives as they anticipate lease expirations in 2010 to 2012,though they are not committing, according to Studley Inc. senior vice president Tom Fulcher. A number of law firm leases are expiring between 2011 and 2014, which will eventually require further decisionmaking, he added. Meanwhile, a spate of law firm mergers and consolidations have contributed to a rise in sublease space since fall 2007. The lack of activity has driven landlords to offer concessions that Cushman & Wakefield estimated to be as great as 16 months of free rent and $80 per square foot in tenant improvements. The developing areas of NoMa and the Southwest are most likely to be offering free rent and lease assumptions, according to Keith Lipton, executive vice president & managing director for Grubb & Ellis Co.’s D.C.-area offices. On the other hand, Hunton & Williams L.L.P recently signed a 15. year commitment for 190,000 square feet in Boston Properties Inc.’s Square 54, a 430,000-square-foot office building under construction at 2200 Pennsylvania Ave., N.W., in the central business district. And Arent Fox L.L.P plans to occupy 255,000 . square feet in the 370,545-squarefoot 1000 Connecticut Ave., N.W., Continued on page 13 ® For more on D.C. development, visit www.cpnonline.com/search and enter key words “development spigot” in quotation marks. 12 Commercial Property News • February 2009 • www.cpnonline.com http://www.cpnonline.com/search http://www.flaglerdev.com http://www.flaglerdev.com http://www.cpnonline.com

Table of Contents Feed for the Digital Edition of CPN - February 2009

CPN - February 2009 Contents Starting Line Buzzworthy Office Data/Analysis Washington, D.C., Market Profile Ranking: Mortgage Banks & Brokerage Firms Top Deals of 2008 Mortgage Banking Mexico Brokerage Sustainability CPN-Nielsen Claritas Special Report Resource Guide

CPN - February 2009

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