are upgrading to higher-quality buildings and right-sizing
while they are at it.
WASHINGTON, DC-A handful of leases have been inked in the area in recent days, none of which broke the 50,000-square foot barrier. Or even 25,000-square foot marker. Not that these leases are being sniffed at by the industry and respective landlords—on the contrary, in a period of stagnant growth in the DC-area commercial real estate market they are very welcome indeed. They do, however, serve as markers in one respect—barring the occasional exception, for the time being they are the new normal for the DC area leasing market.
Everyone wants to see the days of 100,000 square feet deals return, but for the time being, the industry can work with this new normal, Cushman & Wakefield’s Brian F. Tucker tells GlobeSt.com. “Smaller tenants are more nimble, they need less advance time to complete a relocation, and more and more, they are taking advantage of a flight to quality.” Tucker, along with his colleague John B. Dragelin represented Lerner Enterprises in a 19,300 square foot lease signed with PNC Bank, who was represented by Doug A. Eliot and James T. Palmer of Avison Young. PNC is taking the space on the third floor of 1750 Tysons Blvd. in Tysons Corner, Va.
Other recent transactions include a 14,036-square foot lease extension signed by DC Business Centers at 10 G St. NE. Glenn Meltzer of The Ezra Co. negotiated the lease. The American Psychological Association owns the 258,000-square-foot building. Also this week, J Street Cos. announced the relocation of Reading is Fundamental, which took 10,000 square feet at 1730 Rhode Island Ave., NW. The transaction occurred concurrently with the sublease of Reading Is Fundamental’s 18,000 square feet at 1255 23rd St., NW to Plan USA International. The transaction was structured as a “space swap” between the two organizations. This transaction, in fact, reflects another trend that Taylor and many others are watching unfold here: the rightsizing of space. “What we are seeing is tenants taking the opportunity not only to upgrade their space but to right size as well. They are shedding space for a smaller footprint while upgrading at the same time to a higher quality building.” The costs remain the same because the market is very competitive, he adds. Even for deals under the 25,000-square foot mark.