WASHINGTON, DC-Last week Skanska closed on a development site in NoMA for nearly $41 million. The 63,790-square-foot Capital Plaza II and III site is located at First and M streets, NE. It is the latest sign that the development cycle in the DC area has begun.

In many ways Skanska is the reverse canary in the coal mine indicator for the DC area’s commercial real estate market. Last year, before any other firms would even think of spec development, it announced plans to begin work on a eight-story, 165,000-square-foot office building in the East End. It also has plans to begin spec development of an office building in Rosslyn, VA.

There are other signs, though, besides Skanska that show the region is ripe for another cycle of development. While such firms as Skanska and Monday Properties--which is also developing in Rosslyn--are funding these projects at least partially with their own cash stores, debt and equity lenders are beginning to step up with financing again. 

The most prevalent examples are in the multifamily and condo markets, such as Donatelli Development’s recently-secured $116-million equity financing for the next phase of Highland Park, a 144-unit multifamily project located above the Columbia Heights metro station in the District, and Abdo Development's financing for a 120-unit luxury condominium project set to be constructed in the Rosslyn Ballston corridor. 

The most definitive indicator that the development market in the DC area is back is the return of spec office finance. For the moment, such lenders are occupying themselves with other projects, in large part waiting for high vacancy rates to burn off. That day, however, may be approaching faster than anyone might have expected even six months ago. Consider Washington Property Co.’s acquisition of 9.41-acre plot of site-plan approved land in Westfields, VA with the intent of developing it into an office building in the medium term. An overdeveloped submarket, Wesfields is still viewed as a good bet by WPC. Once it has a pre-lease in place, WPC head Charles Nulsen told GlobeSt.com in an earlier interview that it will move forward with development plans.