- Steve Kenney, Cherry Bekaert LLP - Waiting to see what happens with the tax bill, what will be effective and when it will become effective. Everything or most everything is still on the table in terms of tax negotiation. Client concerns have waned, but are still there. Many are wondering if the bill(s) will pass before new years. Clients are putting in offers but are being out bid by people who are converting to residential real estate. However, in many cases, the numbers don't seem to be working. (DC metro area)
- Brian Ball, NAI KLNB - Parking lots are full since the metro is not being used.(fears of covid likely) However, offices in the area appear to be at 30-40% building usage. In their own office they have seen 50%. However, these people have been there since the beginning of then pandemic. There are a lot of people showing up for in-person tours and concessions are still abundant. Makes little sense to buy a non institutional grade office building as there is no cash flow. You better have a good lender who will work with you to make it through the years you aren't making black or green.
- Marc Tasker, NAI KLNB - A nice flurry of commission pre Omicron and hopefully there will be a first quarter pickup in 2022. $242/ft square foot is now looking small, $300/ft in PG county and $244/ft industrial for 40K feet. Rental rates are great 14 -15 triple net. Might hit 20$ by the end of next year. Data centers are taking the space that warehouses are looking to expand into per ecommerce expansion. As long as the lenders are lasting (especially in the industrial sector) there are plenty of people with money but there is no product to buy.
- Nick Mills, CoStar Group - For clients, a full remote hybrid is something that is important for talent retention. Still the Net new demand for the city is emerging. Meeting with the finance team of DC, appraisers are expecting conflicts for new values vs actual value per revenue generated. While also, retailers have switched to percentage based revenue. Many are taking spaces and turning them into residential. Sales volume is the smallest it has been in a while. For the rental housing market in DC, Most residential buildings are stabilized and the concessions are evaporating. Parking in apartments is at a premium. Some have long waitlists for parking spots. DC hospitality is one of the worst performers in the country.
- Andrew Cooper, Van Ness Feldman - Convention went well. Hotels and casinos in Vegas don't seem to be suffering. The convention was downsized and few entities. Derek was in attendance and the Mayor. Since the mayor has a few years under her belt, the city is in a good position to deal with large corporations and other offers. There were events and attendance was effective.
- Anne Purcell, CoStar Group - Trump Hotel (ground lease) may be the highest price per key ( if it closes ) ground lease. The long term fundamentals are good across different asset types and there doesn't seem to be long term bets against DC. These assets have performed pretty well in previous cycles.
- Derek Ford, Washington DC Economic Partnership - National companies have such a matrix of different points to meet and check off it is a hard and lengthy process to bring them in. Grocery stores are a huge thing, Harris Teeter located on Potomac Avenue in Southeast D.C. is closing after almost 14 years. Their option year was coming up and they chose not to sign. The benefits within the 3 mile radius were too dense The mayor is pushing food access with food access grants of 250K per entity. (second round) Economic focus is to give money out. However, what about three years from now. Therefore, tax writing to keep companies here is important.
