Good News in D.C.
Commercial Observer
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In some rare good news for the Washington, D.C., office market, a law firm has signed a lease for 120,000 square feet that government agency Fannie Mae is vacating. Also for today: The construction pace of life sciences real estate is slowing as demand for it ebbs.
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— Tom Acitelli, Deputy Editor
ArentFox Schiff Signs 120K-SF Office Lease at D.C. Trophy Building
Out with Fannie Mae, in with ArentFox Schiff. The latter, a Washington, D.C.-based law firm, has signed a roughly 120,000-square-foot relocation lease for Carr Properties’ Midtown Center in Downtown D.C., taking up a chunk of the building’s footprint that Fannie Mae intends to vacate. ArentFox Schiff’s change of scenery represents a roughly 43 percent size reduction from its 208,000-square-foot headquarters just two blocks away at 1717 K Street NW, which the firm has occupied since 2013. The law firm’s new, long-term lease at Midtown Center will include three floors at the 14-story, 869,000-square-foot property’s east tower, according to Carr. The complex, which was completed in 2017, is notable for the three zigzagging pedestrian bridges connecting its two halves 100 feet above ground.
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Life Sciences Construction Slows to Meet Tepid Demand, Higher Costs
Life sciences developers may need some lifesaving therapies of their own as demand dries up. Increasing costs of construction materials and equipment coincided with a two-year decline in the amount of lab space being built — a saving grace for commercial real estate in recent years — according to a report from CBRE. With those construction costs climbing between 20 to 25 percent on a national level since the beginning of the pandemic, the development pipeline is expected to decline to pre-COVID levels by 2026, the report found. It may not be all that bad, as 72 percent of the 21.2 million square feet under construction is still unleased, according to a report from CBRE.
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