WASHINGTON, DC-At the close of yesterday's RealShare Washington, DC, the roughly 500 local industry attendees walked away with a thorough assessment of the state and future of the local market. Sponsored by Real Estate Media Inc.--the New York City-based publisher of GlobeSt.com and Real Estate Forum--this local stop on the national traveling RealShare road show touched on a variety of critical issues, for Washington, DC, Northern Virginia and Suburban Maryland. But all basically reached the same conclusion: the Metropolitan Washington, DC region is hot and there's no tangible end in sight.

The day kicked off with opening remarks by Real Estate Media editor-in-chief Michael G. Desiato, followed by the Town Hall Meeting. Advantis/GVA president and CEO Petch Gibbons moderated the panel that included: Opus East LLC president and COO Jim Lee; Douglas Development president Doug Jemal; Monument Realty principal Jeff Neal; and Transwestern Commercial Services senior managing director Clifford Mendelson.

The panelists addressed questions posed by Gibbons and the audience ranging from relationships with their investors to their most notable deals. To the question, "What keeps you awake at night?", Jemal's reply was "interest rates." An increase in rates would ultimately curb development and sales. Alternatively, Neal responded by pointing to the possibility of what he called a "cliff mentality" among developers; a potential trend in which developers would begin to build too much, and even more developers would follow their lead. And Mendolson's response brought a dose of harsh reality about the world we live in today and the vulnerability of the market. "All the talk about dirty bombs; one in Downtown DC and all bets are off," he notes.

The panel also pondered the question of whether or not there is a real estate bubble in the local market, a bubble that could burst just as the Internet bubble did in the late 1990s. The general consensus was that there is no bubble. Both Neal and Mendelson pointed to the same explanation--jobs. "There is no bubble because of job growth," he explained. "But rates are going to go up, cap rates are going to go up, and if there were no job growth and rates all went up, we're all dead."

The conference also included a keynote segment headlined by Peter Linneman of Linneman Associates and Albert Sussman Professor of Real Estate, Finance and Public Policy at the University of Pennsylvania's Wharton School of Business. He made some bold pronouncements and took no prisoners in his depiction of government spending and condominium investors.

"This is as close to a recession-proof town as there is in the world," Linneman declared. "The government never cuts spending, let's just be really brutally honest. They just slow down growth and call it cuts; the increases are just not as big as increases they planned, so that will feed this economy going forward."

On the subject of absorption in the national office market, he noted that, contrary to some assessments, there was significant absorption of space nationally last year; close to 120 million sf. Net positive absorption, he said, is on the horizon, pointing out the keys to achieving this state: filling up office desks, continually adding new jobs and maintaining the backdrop of corporate profits.

"This year will far exceed any prediction I've seen of national office absorption," Linneman asserted. "This area won't see as much because it already had so much."

Marcus & Millichap managing director Hessam Nadji then addressed attendees, providing a detailed look at the foundation of the sizzling local investment market through facts and figures, and concluding that the Washington, DC region "is definitely a turbo-charged area."

"Inside the Real Estate Mind," hosted by Desiato, featured soon-to-retire industry veteran John Donovan Jr., senior managing director of CarrAmerica Realty Corp. With regard to the local market, Donovan said, "I can't imagine a better driver for the economy than the government; its' not going anywhere." And as for favorable markets outside the District, he pointed to Northern Virginia's Reston Town Center community and Alexandria, VA's Old Town, where there is an increasing prevalence of live-work-play developments. Looking beyond the District is vital, he insinuated. "We are in a bubble right now in terms of investment sales; when the music stops, there are going to be some people in some uncomfortable places."