WASHINGTON, DC-The Washington DC area's commercial real estate market has much going for it--it is still a top destination for foreign investment for instance; it still is home to a highly-educated workforce; the federal government plans to invest in $9.3 billion on its real estate portfolio under the new budget agreement. But the bottom line for 2014, according to Delta Associates and Transwestern's Trendlines report, released last week, is this depressing projection: Investment sales volume in the metro area for 2014 will be "modestly" lower than in 2013.

Indeed, office market pricing plateaued in 2013 due to a combination of several performance challenges, to say nothing of the economic uncertainty caused by Congress. The Trendlines report notes that the average sales price per square foot for 2013 was $352 compared with $355 in 2012. On the other hand, pricing for apartments increased last year for both high-rises and garden apartment.

The upshot is that opportunities exist, but investors have to be strategic and long-sighted as they go after them. Trendlines' recipe-- or rather, playbook--for success in 2014 can be broken down into the following steps:

1. Improve revenues: Renovate and reposition

2. Reduce costs: Invest in enhanced asset performance

3. Sustain net cash flow: Finance while interest rates are low

4. Repurpose obsolete assets

5. Leverage demographic shifts: Invest in seniors housing, medical office, and retail

6. Seize market opportunities: Selectively invest in and develop industrial and condominium projects

7. Acquire and position sites for next cycle of office and apartment development

Some—many, even--property owners are already this formula or parts of it at least. Among the numerous examples the Trendlines report singled out was the $20 million Rockrose Development Corp. has spent on repositioning 1776 Eye St., NW, to appeal to the "modern tenant."

"We expect it will not be until 2015-16 when the Washington metro area will experience meaningful office market growth," the report states. "However, the savvy investor can be successful now by investing in repositioning older, underperforming assets at superior locations…."