Hard to Find: Affordable Office Space In DC

FBI headquarters soon to be vacant and redeveloped. Photo credit: FBI.gov

Per a recent article in Bisnow, tenants in downtown DC office space–particularly from creative and nonprofit sectors–are feeling a sense of urgency to find affordable space. Here’s a quote from the article:

As office landlords look to increase their profits in a city that does not allow them to build higher than 13 stories, most are choosing Lenkin’s plan of repositioning aging Class-B buildings into trophy product. While this trend is good for landlords seeking higher rents, it is quickly depleting the stock of affordable product and pricing nonprofit and creative tenants out of DC’s core market.

As the article states, the boom in new trophy buildings that raise rents is happening at the same time as a spike in demand from the nonprofit and creative sectors. Those factors leave tenants in the aforementioned sectors to scrap for rapidly diminishing affordable options within DC core office market, where increased redevelopment continues.

Cushman & Wakefield’s own Matt Garcell related one of his experiences with a client facing this issue:

“We were proactive about it because we knew the building was coming down,” Garcell said. “We knew that, around this time, the market would be flooded with tenants looking for economic options. We went to market before the other tenants in that building knowing they could have been competing with their neighbors.”

He went on to say:

“They still have the ability to stay downtown, but those options are limited,” Garcell said. “It’s going to become more limited as you start to see more of these buildings get demolished. A lot of buildings in town are no longer low-cost options for these tenants, they’re just getting knocked down and turned into trophy.”

Read the entire article at Bisnow.