District Office Market Leads the Country

WASHINGTON, DC-In an advance version of its year-end 2001 MarketBeat series, Cushman & Wakefield has concluded that the Washington, DC office market stood head and shoulders above most other regions despite the economic downturn and the emotional hurdles caused by the terror attacks in September. The area’s office market had a strong performance that is expected to continue well into 2003.

Speaking to GlobeSt.com, Cushman & Wakefield Senior Associate Scott Keeton says “the report certainly shows that, without a doubt, DC has proven itself to be one of the strongest markets in the country this year.” Most notable among the area’s commercial real estate achievements is its standing as the metropolitan area with the lowest Commercial Business District vacancy rate, 5.7%, in the entire country as of the end of the third quarter 2001. Cushman expects the District to hold first place in this category for the next 18-24 months.

Also, despite decreases in demand, absorption rates and leasing activity, average Class A rental rates increased by 3% to $34.46 per-sf. “We’ve heard [the DC market] is recession-proof,” Keeton notes. “While that may or may not be true, it certainly weathers the storm better than any other market for several reasons: primarily because of federal spending in the area, and the diversified business sectors.” The report also notes two significant occurrences that effected the market: a resurgence of interest in the District after rapid growth of the high-tech industry in the outlying suburbs; and Vornado Realty trust’s acquisition of Charles E. Smith Commercial Realty, which makes the company the area’s largest commercial property owner.