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|Central Business District
(35 million s.f.)
|Central Business District
If Washington, DC has a "business" district, this is it. More likely, it should be called the Central Law and Lobbying District (CLLD), due to the intense concentration of lawyers and lobbyists that populate this political town. From MacPherson Square to 22nd Street in the Northwest quadrant of the city, this vibrant business submarket is ground zero for amenities, restaurants, Metro, clubs and proximity to all things that are uniquely Washington.
With more than 34 million square feet of office space, it is one of the largest submarkets in the District of Columbia. Many of the existing buildings have been in place since the sixties and seventies, most having undergone significant renovation to comply with the Americans with Disabilities Act (ADA) as well as cosmetic improvement.
The current overall vacancy rate is 5.9% for new and relet space, with much demand put on the available spaces. It is rumored that a new transaction at 1725 Eye Street for more than 40,000 square feet is at $43.00 full service with approximately $60.00/s.f. in concessions.
The East End is the new bookend to the Central Business District. Characterized by newer, larger floor-plate buildings, it contains 30 million square feet of office space. Much of the same mix of tenants that you find in the CBD are also here; however, there is a different feel to this submarket. The vacancy for new and relet space is a tight 4.4%, with few large or medium-sized blocks of space available.
New buildings such as 1201 F Street, developed by CarrAmerica, have achieved rents on new transactions that approach $36.00 -- triple net! Similar numbers are being posted by Boston Properties at 801 9th Street and by the Lawrence Ruben Co. at 555 11th Street.
Georgetown (off map, immediately to west of Westend)
This small market is fully leased -- a 2% vacancy rate -- out of 2.7 million square feet. With no Metro access, and a active community containing development, this submarket is boutique. To the right tenant, it provides excellent access to Virginia via the Key Bridge and upper North West via Wisconsin Avenue.
Please watch the transformation of the retail in Georgetown, courtesy of Anthony Lanier of EastBanc. His team has been acquiring older, tired properties and turning them around with a much larger picture in mind. The incinerator site, which EastBanc is also developing, will provide retail, residential and theatres.
This is first Capitol Hill, home to associations and influence-seeking organizations, represents a small but significant 6.6 million square foot enclave, currently sporting a 3.1% vacancy rate.
Another small submarket which is a loose collection of small office buildings along the Red Line Metro up Wisconsin and Connecticut Avenues. Friendship Heights contains the most density for this market, which is an imprecise catchall for everything north of Massachusetts Avenue. Fannie Mae and Georgetown University tend to dominate the lower Wisconsin Avenue part of the Uptown market.
There is 6.8 million square feet of office space in the Uptown submarket, with a vacancy rate of approximately 5.2%.
This Federal ghetto is devoid of the culture and ambiance of many of the other submarkets of the District of Columbia. It is home to such groups as HUD, DOT, USPO, GSA and many other Federal tenants. Then there are the camp followers -- contractors that covet proximity to these agencies. In a nutshell, that characterizes this submarket, which has just over 10 million square feet and a vacancy rate of 6.6%.
Several development sites give this submarket the potential to grow: Republic Properties, landlord to the FCC, has approximately 1.8 million square feet of development potential. JBG bought the Blue Cross site, with the potential for 550,000 square feet.
A market that grew up in the late eighties, but never became significant in terms of size (currently 4.3 million square feet), probably due to an already entrenched residential community and lack of Metro. It is characterized by newer buildings, tree-lined streets, and hotels. This submarket is especially popular with lawyers that covet quick access to upper Northwest, Virginia and Bethesda/Chevy Chase, rather than fight to get in/out of the CBD or East End. You will also find the Bureau of National Affairs, a significant publisher, World Wildlife Federation and the European Communities, as well as the new World Bank building.
The new Ritz Carlton development at 22nd and M Streets will provide much needed character for that particular part of the West End. The market is extremely tight, with a 2% vacancy rate.
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