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WASHINGTON DC-One common thread emerging from NAREIT’s REITWeek conference in New York City is that owning real estate in the Washington DC area is a great panacea against the larger economic woes and still vicious capital markets credit crunch.

Case in point is Vornado Realty Trust. Steven Roth, who is stepping down as CEO but will remain as chairman, told listeners during his company’s presentation that “as I far as I can tell there is no recession in Washington DC.” He allowed that the submarkets in the “second rim” , or outlying suburbs may not be faring as well. “But where our assets are–Crystal City [VA] and the District” the market is performing well. “We are very constructive on Washington.”

Washington Real Estate Investment Trust’s WRIT’s CEO Scott McKinsey echoed that theme of gradually increasing vacancies in the outer-lying suburbs. The overall market, he says, consists of concentric circles, with those markets close to the Beltway experiencing 11% to 12% vacancy rates. The further out one goes vacancies rates rise sharply to as much as 17% to 20%.

Still, though, WRIT is faring well, McKinsey says. Like many REITs it has resorted to the equity market to raise capital–it has raised $107 million in common stocks recently. He also pointed the sale of Avondale Apartments in Laurel, MD–a trade that closed within the last two weeks. WRIT achieved a net book gain of $7 million on the sale of the property, bringing the total capital the company has raised this year to date to $127 million.

Then there is Corporate Office Properties Trust, the poster child for REITs that seek to leverage the DC’s stability. Randall M. Griffin, COPT president and CEO, noted that its number one tenant is the government, with a heavy emphasis on intelligence operations. “We are the largest owner of secured building in the country” with “67 leases inked with a federal agency.” COPT’s strategy has been to own large office parks adjacent to government drivers, he says. By 2010 it hopes to have 65% of its revenue coming from the government.

Not all of these companies fit into the investor profile, of course. REITs that have a nationwide exposure–such as AvalonBay Communities–have been bloodied up a bit from the economic forces. Still, though, as these companies recite their geographic performance, it is clear that a DC presence is providing some ballast.

The nationwide job losses are taking a toll on renter demand, Bryce Blair, chairman and CEO of AvalonBay Communities, says. As such the company offered guidance at the beginning of the year that its expected revenue and NOI would decline. Which it did: in Q1 it dropped just under 1%. So far, through in Q2 its year-over-year decline has been 2.5%; year to date it is 1.5%. All of the regions are registering declines, Blair says, with California dropping the most. “DC is holding up the best with a 1% decline” in year-over-year measures.

On the other side of the specialized REIT spectrum is DuPont Fabros, which owns data centers to wholesale their operations. Its prospects couldn’t be brighter, CEO Hossein Fateh says, who predicts even more demand for these services, due to ongoing Web 2.0 services, the higher barriers to entry and tech developments for servers.

“Our returns on unlevered yield are 12 to 15%,” he says. Another benchmark he offered: At time of the company’s IPO in 2007 its biggest asset was ACC4, a data center in Ashburn, VA. “We predicted it would yield 12%–and now it’s yielding 15%.

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