WASHINGTON, DC-Dotcoms account for only 7% of the leasing in institutional quality space in Internet-heavy Northern Virginia, according to a new study by Trammell Crow Co. It’s far less than brokers expected but it’s useful news to investors in the booming market, where credit concerns have made owners warier of high-tech tenants and pushed deposits up to as much as two years’ rent in this market of 120 million sf. “When we got done we were shocked,” said Joseph A. Callanan, director of institutional sales for Dallas-based firm’s Washington office.

The study looked at the 617 tenants using more than 20,000 sf, which account for almost 48 million sf in the market. That’s where Trammell Crow found the small fraction of pure-play Internet content and commerce companies. Another 15% were in computer-related businesses, while the rest were a variety. About 30% are Standard & Poor’s rated companies, 14% are government tenants, 4% are associations (a strong type of tenant in this market), and he remaining 29% are a variety of companies.

“The data says that the market is not some house of cards built on shaky credit,” Callanan said. That’s important in an area where memories of the last real estate recession still sting almost a decade later.Owners can read the data two ways, Callanan said. First, it means that the market is safe for investment. Second, if there are so many other types of tenants out there, owners can hold out for better credit tenants.Callanan became interested in the question after reading an article on how quickly dotcoms were “burning” through their cash. He decided he wanted to inventory the local market and see how big a risk these companies might pose.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.