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TYSONS CORNER, VA-What a difference a year makes. This time last year at the RealShare Northern Virginia event, both panelists and attendees were enthusiastic about both the submarket and national market. That, clearly, has changed–but both panelists as well as many of the 300 or so attendees at Tuesday’s conference are optimistic that Northern Virginia’s strengths will see the submarket through what is largely expected to be a rocky few quarters.

For starters, said Mark Levy, VP and market officer for ProLogis, the subprime crisis has been overblown in the media. The lending situation is bad, he acknowledged–but not to the pervasive extent that it has been portrayed. “I am more concerned about the perception of the situation than its reality,” he said during the keynote panel discussion.

“People don’t know what to believe,” Herb Mansinne, managing director of Jones Lang LaSalle, also a panelist, said. “I think a lot of us are getting psychological whiplash following events.”

Still, though, even if the national economy slips into recession, Mansinne noted that Northern Virginia may very well stay in the black. “When the country was last in recession in 2002, Northern Virginia was not.”

There are some obvious and not-so-obvious reasons for this. Government spending falls in the former camp, Levy said. At face value this is good for the region; however, as the panelist discussed next year’s presidential elections it became clear many expected that no matter which party wins the White House and Congress, fiscal restraint will be at the forefront of any spending plans. Homeland security and the Department of Defense, though, will be an exception, which will benefit Northern Virginia. Also, Mansinne explained, Northern Virginia has become more diversified within the categories of government spending, so it won’t feel a budget crunch too much in any one sector.

Other reasons less obvious but equally as important to Northern Virginia’s real estate market’s health: the growing interest on the part of foreign based investors in its assets. To be sure, the entire US real estate market is one sale now for buyers from Europe and Asia, said Jim Lee, president and CEO of Opus East, thanks to the dollar. Indeed, the day before the conference, Prudential Real Estate Investors revealed that it had acquired Boston Properties’ office portfolio in Loudoun County on behalf of investors in Munich-based TMW Pramerica Weltfonds. Northern Virginia, though, with its proximity to the DC market, will have special allure for many investors not interested in familiarizing themselves with second or third tier markets. “Foreign investors tend to gravitate towards trophy, urban assets,” Doug Fleit, CEO of America’s Capital Partners Mid Atlantic said.

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