X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-A recent report by Grubb & Ellis indicates there were 46 completed commercial office real estate transactions of $1.35 billion for the first half of 2001, compared with 60 transactions for $1.92 billion for the same period last year. At this rate, only 66% of pace at this point last year, deal flow might not approach 2000′s total of $4.14 billion, but the firm still sees deals ahead.

“There is no shortage of capital looking for real estate,” Steve Gichner told GlobeSt.com. The report was completed just before the Sept. 11 terrorist attacks, but Gichner, a vice president with Grubb & Ellis, is not significantly altering his view. He pointed to the city of Washington, as a major reason the region is still attractive. “It is one of the few markets with potential for rent growth. It still has significant barriers to entry, little [is] under construction.” As a testimony to his comments, the firm sites some completed deals during the first half in the District, and they include the sale of the William Rogers Building at 2001 K Street NW to Bernard Spitzer from Louis Dreyfus-Apollo Real Estate for $95 million, or $409 a square foot. The firm’s research only reflects deals that have closed, not deals that have been announced, but not completed. But the reports said over 20 properties are currently on the market in the District. Specifically, the report said Class B properties have set record prices on a per square foot basis, with an average price per square foot of $234.71. The firm reported there are over 14 Class B properties on the market in Washington.

But while the District remains one of the nation’s hot markets, with one of the lowest vacancy rates in the country, Northern Virginia saw a big drop in deal flow, explaining in part why this year’s pace is so different from 2000. Through the first half of the year, 15 office buildings were sold for about $457 million, compared with 36 office buildings sold for about $1.1 billion for the same period last year. Not only has deal flow decreased sharply, but also Gichner said values had declined about 10% to 15%.

Meanwhile the pace picked up significantly in Washington’s Maryland suburbs. In that submarket, 13 deals for $300 million were completed, versus 7 deals for $42 million for the first half of 2000. The pace through June 2001 is equal to all of 2000, dollar-wise, and Grubb & Ellis does not expect a slowdown, citing eight other buildings that are on the market right now.

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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

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 © 2020 ALM Media Properties, LLC. All Rights Reserved.