"We are still seeing a lot of capital flowing into the area," Elizabeth Norton, director of Research, Mid-Atlantic Region, for Delta Associates, tells GlobeSt.com. Indeed investment sales performance for the first half of the year—which registered some $8.9 billion—is on track to exceed 2006's record $13.8 billion, she adds. "If you 'annualize' 2007's first half, that number would be $14.2 billion."
Investment sales in DC were bolstered by two portfolio sales and one company sale: Normandy Real Estate Partners acquisition of the US Army/Air Force Mutual Aid Association's real estate portfolio, called Starco Properties, for $157 million; JPMorgan Asset Management's Special Situation Property Fund's $502 million acquisition of Columbia Equity Trust Inc.; and Blackstone's acquisition of Equity Office Property Trust.
Investment sale prices have risen as well, closing in on $382 per sf in Q2, compared with $358 per sf in Q1—a 6.7% increase.
The fundamentals of the DC market are weakening, albeit only slightly. Norton notes that vacancy rates are now 9.1%, up from 8.3% one year ago. That is still less than the national average of 10.3%, she says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
