WASHINGTON, DC-Rising office rents in key markets like Downtown DC and the Rosslyn-Ballston region could pose problems for federal agencies that have imposed caps on office rents.
Market rents in those areas and surrounding regions have risen significantly and those rents are in some cases in excess of the federal government's self-imposed caps, which limit the lease price it will pay per square foot to $50 in DC, $39 in Northern Virginia and $35 in suburban Maryland, according to the Washington Business Journal.
Some local governments wishing to land State Department and Defense agency lease deals for new development projects have decided to subsidize developers so they remain below the caps.
“You can see it in the District, and you can see it in Virginia,” says Greg Meyer, senior vice president of Brookfield Office Properties Inc.'s DC region. “If there is a rent cap, generally it's low enough that it's forcing the GSA to go to fringe locations. It's forcing them further out to places like Fairfax County.” See story in the Washington Business Journal.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
