WASHINGTON, DC-Strong federal activity, growing interest on the partof Sovereign Wealth Funds and positive job creation are making theDistrict and surrounding region the envy of the rest of the nation’sbattered commercial real estate markets. However, attendees at theWashington RealShare Conference, held Tuesday at the Grand Hyatt, didnot spend much time belaboring the obvious. Rather, panel after paneltouched in one way or another on a fundamental question: when will real growth start to occur and what can we do to survive until it happens. The RealShare Conferences Series is produced by ALM’s Real Estate Media Group.

Even in the District, survival is still a real issue for many real estate firms, especially the ones that are over-leveraged. The bottom lineanswer to these woes–leaving aside the government programs that areemerging to help the industry–is job growth. Unfortunately, fewpanelists said they expected to see strong growth in the next 12months. “[This year]will be better in the second half and growth will start in 2011,” predicted Brendan Owen, chief leasing officer forVornado/Charles E. Smith. “By 2012 we will see robust growth.”

In other ways the DC area is feeling the recessionary pinch. Forexample, while the federal government has been aggressively expanding,it has also been a savvy tenant, negotiating tough deals withlandlords, according to Joe Stettinius, president of Cassidy Turley. “Theyhave gotten some very aggressive terms,” he said, including 10-yearoptions on some leases. “They are really taking advantage of the factthat it is a tenant’s market.”

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