D.C. BUILDING BOOM CREATES THOUSANDS OF EMPTY OFFICES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00244R000100140030-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 9, 2016
• Document Release Date: July 3, 2001
• Sequence Number: 30
• Publication Date: June 19, 1971
• Content Type: NSPR

By Linda Wheeler-Tht Washington Post
Building at 18th and K Streets NW adds to glut.
Approved For Release 2001/08/09 : CIA-RDP86-00244R000100140030-8
By Margaret Thomas-The Washington Post
New office buildings line section of L Street west of Connecticut Avenue.
D.C. Building Boom Creates
Thousands of Empty Offices
By Kirk Scharfenberg
Washington Post staff writer
The boom in office-build-
ing construction in Washing-
ton has left the city with
enough vacant office space
to relocate half the Penta.
gon.
Ten new office structures
scheduled for completion
this year are nearly half va-
cant and an equal number
have substantial floor space
to rent, according to a re-
cant survey by a real estate
brokerage firm.
The buildings are scat-
tered around downtown
Washington and include lo-
cations at L'Enfant Plaza,
McPherson Square and sev-
eral in the "new downtown"
bounded by K and M and
17th and 20th Streets NW.
Several real estate men
estimate that more than 2
million square feet of office
space is vacant in the city.
That is equal to almost 15
per cent of all the office
space built in the city in the
last 10 years.
The vacancies extend be-
yond the District line to the
suburbs and, according to
several property managers,
there is more empty space
in the metropolitan area
than ever before.
In addition, buildings con-
taining another 2 million
square feet, including one
with 550,000 square feet at
6th and D Streets NW, are
scheduled to be completed
in the next three years, and
little of this space is rented.
Most office buildings here
are built on speculation
without firm commitments
from tenants, according to
Irving H. Berman, an eco
nomic consultant. "And once
you start, it's not like yo-yos.
You can't just shut off pro-
duction."
Robert Kogod, of the
Charles E. Smith Companies
which manage or own more
than a dozen downtown of-
fice buildings, said the high
vacancy rate is a result "of
periodic over-building. It's
only temporary. It's a ques-
tion of how long, and that is
basically a function of the
economy."
Ten other real estate and
development professionals
interviewed agreed with Ko-
god's analysis.
Mike Windsor, in charge
of leasing for the Blake Con-
struction Co. which owns
six major downtown build-
ings, said small office ren-
ters are closing, or tighten-
ing their belts, and large
corporations are not expand-
ing their Washington of-
fices.
The latest building boom
began in 1969, according to
R. Robert Linowes, a Mont-
gomery County zoning law-
yer familiar with develop-
ment patterns throughout
the area.
At that time, money was
tight and major investors
surveyed the market care-
fully. For the most part, ac-
cording to Linowes, they in--,
vested in office buildings
after finding high rates of
apartment vacancies and no
available office space.
Now, two years later, the
situation is reversed.
See VACANT, A6, Col. 1
Approved For Release 2001/08/09 : CIA-RDP86-00244R000100140030-8
 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100140030-8
iudding Boom Bri
o
ngs Clut ices
ton
VACANT, From Al
The PMI Land Develop-
ment Co., of Washington,
backers of the proposed
$150-million Falkland com-
plex in Silver Spring, for ex-
ample, is redrawing its
plans to cut back on office
space and increase the num-
ber of apartments.
To entice office renters
s,3 into the available space,
some owners are offering
bonuses such as four months
ree rent on a five-year
lease, wall-to-wall carpeting
and free remodeling of
\ older buildings.
Beal estate agents who
1 andle office rentals said
that any move to the sub-
urbs hurts the city some-
what but added that such
movement in Washington is
significantly lower than the
mass exodus from other ci-
ties, such as New York.
"Most people still prefer
the prestige of downtown
Washington," said Phillip
Carr, vice president of
Oliver T. Carr, Inc., a major
downtown office builder.
In fact, according to a
study by the Washington
Board of Realtors and the
National Capital Planning
Barbara Pryor, assistant Commission, released this
vice president of Julian J. month, office building conStudley, Inc., a real-estate struction has been a rela-
brokerage firm, said the tively healthy industry in
downtown caThy rate was -the city for thepast decade.
aggravated by the slow The study, which surveyed
movment f office renters office construction from
to the suburbs. 1959 to late 1970, found that
the present boom (24 build-
ings were under construction in October, 1970) was
simply the latest surge in a
series of cyclical ups and
downs.
Further, the study found,
the present intensive devel-
opment in the area west of
15th Street NW and along
K, L, and M Streets NW is
part of the general west-
ward movement of the city's
business district that began
in the late 1950s and is not,
in itself, a new trend.
Between 1959 a n d late
1970, according to the plan-
ning commission study, 186
office buildings were completed in Washington. Together they provided 17.9
million square feet of floor
area, five times that of the
Rosslyn office complex in
Virginia.
Ninety-three per cent of
the office buildings com-
pleted from 1959 to late 1970
are owned by profit-making
organizations and are taxa-
ble, according to the study.
$11.4 million in real estate
taxes, 10 per cent of the total
million in real estate taxes,
property tax collected by
the District.
Ninety-four of the 186
buildings are located in a
70-block area located gener-
ally to the north and west of
the White House. Fourteen
of the 24 buildings under
construction last October
were also in that area.
"We're moving some peo-
ple around downtown," said
Miss Pryor. "We're moving
them out of perfectly decent
older buildings into newer
ones. But if you move 40,000
square feet, you're really
not doing much."
Several property manag-
ers, such as James Eichberg,
of the Braedon Companies,
said that thesituation had
improved somewhat over
the last month and that the
Approve
d For Release 2001/08/09 : CIA-RDP86-00244R000100140030-8