Tenant concessions on the rise in D.C.
April 10, 2012
By: Daniel J. Sernovitz

Commercial landlords in downtown Washington have become increasingly generous with free rent and tenant improvements, a measure that has kept asking rental rates artificially high and is meant to preserve the value building owners hope to keep in their properties.

That’s the latest assessment of the real estate market by tenant brokerage Studley, which recently completed its annual Effective Rent Index. According to the report, concessions spiked by about 11.5 percent in the past year and now hover at about $111.50 per foot. ...

... “It’s a great time to be in the market, but you don’t have to jump at the first opportunity you see,” said Studley Executive Vice President David Lipson. ...

... Studley’s annual survey measures the gap between how much rent landlords publicly say they want for their office space and the effective rent tenants are actually paying when you factor in improvement packages and free rent. ...

... Having that kind of flexibility can help ease tenants' minds as few companies know how business will be, and how much space they will need, two decades from now, said Studley Executive Vice President Tom Fulcher. ...

... “These concessions aren’t killing landlords, they’re just making them less profitable,” Fulcher said.

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