DC Office Market May Sag as Federal Government Contracts
Wall Street Journal reports: Has the window of opportunity already closed for selling an office property in Washington, DC? According to a recent article in the Wall Street Journal, that may not be true yet, but momentum in the capital’s office market will likely not sustain the strong results posted in recent quarters.
One of the leading causes of Washington, DC’s pending slowdown will be increased federal government dispositions as executive agencies eliminate any unneeded properties to reduce the oversized national deficit. Additionally, congressional leaders have made clear they will be slashing the federal budget by selling real estate and reducing leased space in the capital. Government-related activity has driven momentum for Washington, DC’s office market through the downturn, but government contraction may stifle activity and depress pricing metrics in the future.
Regarding this possible reversal of fortunes for the capital's office market, Real Capital Anlaytics’ Dan Fasulo remained confident that it could weather a reduction in government-occupied space. Recently, one of Washington, DC’s largest office buildings – David Nassif Associates’ 1.4 million-square-foot Constitution Center, located in Southwest DC near L’Enfant Plaza – was placed on the market. Mr Fasulo evidenced this offering in support of Washington, DC’s strength, remarking that, “Recent sales of prime property have fetched as much as $905 a square foot…If investor appetite for Washington property stays strong…the Constitution Center could fetch as much as $640 a square foot, for a total of about $900 million” He added that he expects …”some heavy action” in terms of competition for the property’s sale.
View the full article on Wall Street Journal: DC Office Market May Sag as Federal Government Contracts
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Posted by: Nina Turner