There is a really important article in today's Washington Post ("Region's Office Space Vacancies Soaring" by V. Dion Haynes) regarding office building vacancies in the metro area.
For many years (if not decades) the development discussion in Falls Church City has been infected by what I like to call the "magic office building syndrome". This is the belief that the only type of development we should have in the City is 100% commercial office buildings that would shower us with revenue without imposing any costs. Further, we can easily get such offices built in the City just by concentrating and "wanting" them hard enough -- without regard to the dictates of the market. All we need is a pair of ruby slippers.
I never understood why the people who thought this way believed that the City had real potential for office buildings to begin with. (i) We aren't in D.C., (ii) nonetheless, our land (and therefore rents) are a lot higher than in outer suburbia, and (iii) our commercial areas are not within walking distance of a metro station. Why build an office building here and not in D.C. or Ballston or Manassas?
A couple of key points made in the article, that in addition to competition from the trend in subleasing:
"... The recession has changed how office buildings are built and sold.
In the boom days, developers would build on spec, certain they'd have tenants by the time the projects were finished. Now banks are requiring developers to have a portion of the building leased ahead of time.
Before, building managers could get top-scale rates on leases. Now many are cutting rents for buildings with the most amenities from more than $60 a square foot to $50 and below, often to draw federal agencies that are limited in what they can spend. Moreover, many are offering three or so months of free rent and kicking in thousands of dollars for build-out costs. ..."
At any rate, hopefully articles like the one noted above will dampen -- if not extinguish -- the view that office buildings are the only worthwhile development model for the City.
