PROGRAM SUMMARY

January Program:
The State of the Market – Yesterday, Today and Tomorrow

Moderator:
Natasha Stancill
Monument Realty

CREW DC commanded a sellout crowd at the Capital Hilton for its first program of 2008 – The State of the Market. Here's a summary of what the panelists had to say about some of the hottest topics in DC real estate.

Effect of the Credit Crunch

• Though a general slowdown is expected, the direct effect on the high-end condo product should be negligible, as buyers in every sector return to quality and top locations.
• The crunch lends opportunities for more creative deals and benefits the well-heeled buyers who have long-standing reputation in this market. The number of properties on the market in 2008 should decrease.
• As Stephen Fuller says, “r” stands for resilience in this market, not recession. Historic vacancy rates holding at an incredible 7% on average over the past decade is a great indicator of the strong fundamentals here. Leasing may slow, as some tenants may embrace a wait-and-see attitude.

Tenant Expectations vs. Market Reality

• Many informed tenants read the papers and believe that the sky is falling, and then look for better deals in the market that just aren't there. The Class B market is particularly tight, motivating some tenants to look at alternative new product in emerging tertiary markets or in Virginia. On the other hand, there remains a significant psychological barrier for many users in crossing out of DC, and other tenants simply need to be in the District.

Ballpark vs. NoMA

• The panel unanimously predicted that NoMa would stabilize faster than ballpark. Although both submarkets have significant promise, NoMa is an extension of an existing office market, whereas the ballpark area is defining an altogether new area and may have a more difficult time attracting tenants in the near-term. GSA leasing activity will play an integral role in establishing an office presence in either market, as demonstrated by the ATF anchor in NoMa. The announcement of the Department of Justice lease location may swing one submarket ahead of the other in the short run.

Going Green

• LEED Silver certification has become the new standard for office product from the developer's perspective. For tenants, green buildings are generally a consideration at this point but not a requirement. Ability to build out a suite to LEED standard is a keener interest. For residential product, the higher per unit cost and myriad user preferences decreases the profit margin of going green. While the residential sector may be slower in the chase, it is certainly following the green trend, especially if and when buyers begin to seek out green characteristics in their purchase choices.
  

Security Requirements

• After September 11, we expected a dramatic increase in suburban users, but this only happened in large numbers with Department of Defense (DOD) and its Base Realignment and Closure (BRAC) initiative. Most GSA users stayed where they were prior to the attacks. We expected many more whole-building and build-to-suit leases but that also didn't happen in large numbers simply because many GSA users did not present whole-building requirements. The most significant lasting security change is the 100-foot setback requirement. GSA has identified 12 million square feet of customers that will need that setback in the future.

2007 Trends

• Rents up in all classes
• Absorption down and also below historic average
• Operating expenses and taxes up
• Residential buyers waiting to see where the bottom of the market will be and watching interest rates

2008 Predictions

• Trophy class and B Class will stay very tight with rents increasing
• A Class will become less tight and rents will stabilize
• Higher construction costs, operating expenses and taxes
• Sublease inventory may increase as corporations downsize
• Increased telecommuting in longer-term
• Rental conversion will continue especially for projects with fewer than 60 units.
• Few construction starts
• Slowdown in tertiary markets
• Fewer deals in development due to high land price
• Flight to quality, mixed/use and transit-oriented development

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EVENT SUMMARIES

Jubilee Wine Tasting

The Jubilee Support Alliance hosted its annual Jubilee Wine Tasting on October 19, 2007. Over 100 wine enthusiasts reviewed wines, sampled delectable foods and bid on auction items -- all in support of a great cause. Michael Franz, a popular wine writer, educator, and consultant, was the featured speaker. Guests reviewed wines from cool climate regions in Australia.

The event raised nearly $39,000 to help Jubilee Housing continue their vital operations and services in our local community. Jubilee Housing offers low-income families the security and stability of a safe and affordable home, support services and a sense of community.  Proceeds from this year's event will provide critical funds for Jubilee Housing's new Youth Services Program, an after school program which will offer youth opportunities that support personal growth and leadership.

Please visit www.jsadc.org to learn more about Jubilee Support Alliance's programs and events.

Networking Roundtable: Senior Housing

The  attendance  was good and the discussion was very well received. The moderator for the program was Dan Gorham, Senior Consultant and Partner from Fountain Square Properties. Dan described Senior Housing as a near core investment in today's real estate market. Seniors want to be near family, amenities and in active locations and not be segregated like in the past. It is critical to integrate operations with the design and location to create the right product. Cornelia C. Hodgson, the president of Dorsky Hodgson Parish Yue Architects, stressed on the importance of good design. Light-filled interiors, full height windows, views, indoor-outdoor connection, independent living combined with care facilities were some of the design features in the 2 projects she presented. Her designs create an interconnected community and spaces for well being. Harley Cook, Partner at Fountain Square, touched on the development of Senior Housing. Seniors should not be treated as a separate class. Fox Hill, is an example of an Alternative Senior Development . The facility has condos for seniors as well as assisted living. Of the 16 acres of land, 6 acres are dedicated to walking paths and wooded areas. The club level has everything an individual would need in a non-urban site, including game rooms, club room, performing arts center, salon and spa and recording studio. Carolyn Floyd, VP of Operations at Sunrise, portrayed the new product as selling a lifestyle and not just real estate. Enhanced Programming gives a new meaning to resident life. Seniors are provided with a safe and secure environment, healthcare and entertainment facilities. The sales process is geared to help Seniors make the right decision. Success of such a project entails early participation of the Operations Committee in the design process.

CREW DC Clothing Drive Benefitted "Suited for Change"

CREW DC kicked off summer in style by holding a clothing drive to benefit "Suited for Change" in conjunction with the June meeting at the Capital Hilton. "Suited for Change" is a Washington DC based non-profit that provides professional clothing and ongoing career education to low-income women who have completed job training and/or job readiness programs and are currently seeking employment.  Donations from the event filled the Jeep Cherokee of CREW DC member Stephanie Hixson of Jones Lang LaSalle to almost overflowing as she and co-worker Whitney Sanger collected donations both at the Capital Hilton and at the internal clothing drive Jones Lang LaSalle held in conjunction with the CREW event.  After dropping off the clothes, Stephanie and Whitney were treated to a tour of the Suited for Change store by Office Administrator Joyce Thomas.

CREW DC member Phyllis Fordham of Tiny Jewel Box serves as Secretary on the Board of Directors at "Suited for Change" and worked closely with Susan Strom of Nelson Architects, who leads CREW's community action committee to organize the clothing drive.  Another influential member of the "Suited for Change" Advisory Council, Kathleen Matthews, award-winning journalist and guest speaker at the CREW 25th Anniversary Gala, was instrumental in raising awareness of the synergies between the two organizations, sparking the idea for the drive.  Based on the success of this event, this may become an annual tradition!

Site Tour of Waterview

Thirty members of CREW DC gathered at the Waterview complex in Rosslyn, Virginia on May 11, 2007, to hear Kathleen Webb of JBG describe the project and lead a hard-hat tour of the site.

The Waterview complex is comprised of a 633,908 square foot trophy office building, the upscale Hotel Palomar, a luxury, boutique hotel featuring 154 rooms and a high-end restaurant and luxury condominiums on 17 floors above the hotel ranging from $400,000 to over $5 million.

	Waterview's iconic presence on the banks of the Potomac offers the most spectacular views of downtown Washington, the monuments, the Potomac River, Georgetown and the National Cathedral. This complex is one of the first of a number of commercial and residential projects which will transform the Rosslyn market.
With these projects the streetscape and tenant mix will vastly improve as premier tenants choose to relocate their operations to Rosslyn. The population will also soar as residents make Rosslyn their home. The reality of Waterview's delivery and occupancy allows future tenants and residents in Rosslyn to see and walk into this new vision for Rosslyn.

CREW DC Dine Around Event - May 1, 2007

What a fabulous success! Four board members from CREW DC graciously hosted dinner for members at four of Downtown DC's top restaurants. The evening was complete with impressive women, great energy and conversations, and an excellent selection of food and wine. The board members each invited two special guests, creating a wonderful opportunity for CREW members to network. Limiting the dinner group to 12 guests at each location provided an intimate and relaxed setting for members to get to know each other. A good time was had by all which was obvious from the stream of complimentary emails including requests for an increased number of Dine Around Events each year!

Kinkeads with Jeanne LaBelle; Director of Communications Special Guests: Tanja Castro; Susan Longstreet

PS 7 with Kathleen Allgiers; President Special Guests: Erica Leatham; Louise Zimmerman-White

Ten Penh with Helen Haerle; President Elect Special Guests: Janet Davis; Roberta Levy Liss

Zengo with Elaine Gray; Past President Special Guests: Mark Bisnow; Marjorie Nesbitt

At Zengo, in front row, from left:  consultant Trish McHugh, Greta Perry Construction Management's Greta Perry, Capital Design's Susan Denner.  Second row: Knoll's Barbara Rathmell, SmithGroup's Elaine Gray, Studios' Jane Gustafson, Cafritz's Margie Nesbitt, and Nelson Architects' Susan Strohm. Back row: M3Edge's Cathy Bobrow and Woodmark‘s Jennifer Tuten.

At PS 7, seated, left to right:  Peterson Companies' Louise Zimmerman-White (past president of CREW Virginia), McGinnis International's Linda Mortensen (past president of CREW DC), Tiny Jewel Box's Phyllis Fordham, Stark Meyers, Eisler Leatham's Erica Leatham (past president of  CREW Suburban Maryland), Hickok Cole's Holly Lennihan. Standing: Akridge's Jaime Calabrese, Pillsbury Winthrop's Soha Mody, Jones Lang's Kathy Allgier, TKC Integration Services' Barbara Isaacs , and JLL's Stephanie Hixson.

Photos courtesy of Bisnow on Business, CREW DC media partner

Jubilee Support Alliance Gala 2007

Monopoly was the name of the game at this year's JSA gala. JSA created another fantastic event this year, with a near-capacity turnout, a host of great silent auction items, and a healthy dose of fun where one might normally expect to find haughtiness. Attendants collected monopoly money throughout the night for bidding on items, or winning at gaming tables in a side room. Top prize for the “richest” player at the end of the night was a Playstation 3. But the fun didn't stop there – it was pervasive in the gala details. Monocles and ring-pops were sold to add some “flare” to tuxes and gowns. Some arrived dressed as the monopoly man himself, or as various properties on the playing board. Flower arrangements were rooted in a vase full of little red houses. Of course, the seating arrangement corresponded to monopoly properties that had been given a DC twist, complete with napkins and desserts that matched one's board color! (This correspondent was seated at Purple Benning Road).

Claude Thomas presented the Jim and Patty Grouse Award to Greta Perry of Gretta Perry Construction Management, LLC. Ms. Perry has contributed to Jubilee for over twenty years. She has supported all fourteen Jubilee Work Day events as a volunteer, to cite one example. The JSA writes “Greta is a leader that raises the bar on the contribution of individuals in making the city of Washington a better place to live, for everyone.”

Jim Knight presented the Jubilee Corporate Community Services Award to Enterprise Community Partners. Enterprise was one of the leading financial supporters of Jubilee Housing. Since that time, “Enterprise has grown to be one of the nation's leading national non-profits in affordable housing and community development, investing more than $7billion in communities across the country its founding.”

While this festive gala provided a fun night out for honorees and attendees alike, the true winners continue to be the residents of Jubilee Housing homes and the staff that strives to carry out the Jubilee mission. For this reason, CREW DC is proud to be a long-time supporter of Jubilee Housing.

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