Presentation by

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STATE OF THE MARKET WASHINGTON, D.C.
Presentation by Wendy Feldman Block Studley, Inc.
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2008 Year in Review

• Tenants stick to fundamentals and renew current
  space and sublease excess space
• Federal government leasing major driver of growth
  in the District, comprising 56 of the top ten
  leases from 2008
• Department of Justice signs new largest lease
  since 2003, taking 521,000 SF in NoMa
• US Coast Guard signs largest renewal for 592,150
  SF at 2100 2nd St SW in the Capitol Riverfront
• NPR purchases 1111 North Capitol St NE for new
  headquarters in NoMa
• Stadium area doesnt reach potential-Nationals
  were last in The National League East Division
  and leasing activity was dismal
• Record high operating expenses taxes reaching
  as high as 29 PSF

PHOTO
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City Dynamics

• Few large contiguous blocks of space left in
  traditional locations
• Department of Justice and NPR moving to NoMa
  leads to expansion of tenants along red line and
  validates area
• Presence of federal government tenants minimizes
  full impact of the downturn
• Cautious optimism about new administration and
  for somechange in political party
• New construction at a stand still due to
  financial markets

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The District by the Numbers

• Office net absorption for 2008 was 546,000 SF
  compared to 1.7 Million SF in 2007
• Vacancy rates increase slightly in 2008 to 8.4
  up from 7.0 in 2007
• Construction pipeline remained static at 9.6
  million SF in 2008, rising only slightly from 9.3
  million SF in 2007
• Asking rents stay stable in 2008 with a modest
  rise over 2007 by 1.86 -effective rents
  declining
• Investment sales plummeted to 2.3 Billion in
  2008 compared to 3.3 Billion in 2007

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DC Historical Look
6
2008 Development Trends
7
2008 Largest DC Lease Transactions
8
2008 Largest DC Sale Transactions
9
So, whats going on in the submarkets?
Lets log on to get the FACTS.
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factbook
Wendy Feldman Block
Women In Real Estate
Join NOVA CREW!
Wendy is presenting her CREW presentation.
Wendy is attending CREW 2009 STATE OF THE MARKET
National Connections
Wendy is now friends with CENTRAL BUSINESS
DISTRICT (CBD)
Wendy is now friends with EAST END
Wendy is now friends with WEST END.
Wendy is now friends with UPTOWN/GEORGETOWN
Join NAIOP!
Wendy is now friends with NOMA.
Wendy is now friends with CAPITOL RIVERFRONT.
Get Office Standards
Central Business District
Wendy is now friends with SOUTHWEST.
West End/ Georgetown
East End
Wendy joined the group LEED THE FUTURE.
LEED The Future, Hospitality Club, Residential
Real Estate Club, Retail and Art Lovers, NOVA
CREW, NAIOP, BOMA
Southeast/Capitol Hill
NoMa
Southwest
Join BOMA!
11
factbook
The Central Business District (CBD)
Building for Sale!
Personal Info
I am traditional but an old favorite preferred by
many. I am the place to be, and where its at if
you are major player.
About me
Submarket Stats
1615 L St NW
Inventory 39 million SF Vacancy 6.6 Class
A Vacancy 9.1 Avg. Rental Rate 48.12 Full
Service 2008 Net Absorption (1,000,000) million
SF 2007 Net Absorption (250,000) SF Under
construction 2.1 million SF (48.5
pre-leased) Proposed 394,195 SF Existing
Blocks of 50,000 SF available 14
Looking to Lease?
Washington, DC
CBD is home to more available new space than
other markets.
1200 19th St NW
Class A Space!
The CBD has experienced a slight increase in
vacancy rates in 2008.
The CBD is now friends with FEDERAL RESERVE BOARD.
The CBD is now friends with THE WORLD BANK
801 17th St NW
The CBD is now friends with INTERNATIONAL
FOUNDATION FOR ELECTORAL SYSTEMS.
Cathy Delcoco
Kathy Keller
12
factbook
The East End
Building for Sale!
Personal Info
I am well-liked for my freshness and innovation.
I have evolved with the times and I am still the
most popular.
About me
800 K St NW
Submarket Stats
Inventory 42 million SF Vacancy 7.6 Class
A Vacancy 7.0 Avg. Rental Rate 51.02 full
service 2008 Net Absorption 386,000 SF 2007 Net
Absorption 1,940,000SF Under construction
1.1 Million SF (30.6 pre-leased) Proposed
2.7 million SF Existing Blocks of 50,000 SF
available 23
Looking to Lease?
Washington, DC
The East End still commands premium rates because
of its prime location and newer buildings.
1030 15th St NW
Class A Space!
The East End is getting ready for vacancy to jump
to 8.7 in 2009 due to new construction.
The East End is now still friends with
DEPARTMENT OF HOMELAND SECURITY.
The East End is now still friends with
PRICEWATERHOUSECOOPERS.
455 Massachusetts NW
The East End is now still friends with NATIONAL
LABOR RELATIONS BOARD.
Cathy Delcoco
Kathy Keller
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factbook
West End/Uptown/Georgetown
Building for Sale!
Personal Info
About me
Im rather stuffy and prefer to commiserate with
law firms, architecture firms and other
professional services, that are prestigious top
clients.
1050 31st St NW
Submarket Stats
Inventory 15.6 million SF Vacancy 7.4
Class A Vacancy 10.8 Avg. Rental Rate
40.83 full service 2008 Net Absorption 62,000
SF 2007 Net Absorption (430,000) SF Under
construction 430,900 SF (56 pre-leased) Propose
d 97,900 SF Existing Blocks of 50,000 SF
available 5
Looking to Lease?
Washington, DC
West End /Uptown/Georgetown likes the way it is
and is staying that way.
2300 M St NW
Class A Space!
The West End is preparing Hunton Williams to
join its neighborhood in 2011!
The West End is now friends with UNITED WORLD
INFRASTRUCTURE.
Uptown is now friends with CENTER FOR APPLIED
LINGUISTICS.
1255 23rd St NW
Georgetown is now friends with WHITE HOUSE
WRITERS GROUP.
Cathy Delcoco
Kathy Keller
14
factbook
NoMa
Building for Sale!
Personal Info
Emerged as a real player in 2008 with major
tenant deals (DOJ, NPR)!
About me
100 K ST NE
Submarket Stats
Inventory 8.8 million SF Vacancy 12.4
Class A Vacancy 13.8 Avg. Rental Rate
45.44 full service 2008 Net Absorption 47,000
SF 2007 Net Absorption 92,000 SF Under
construction 2.2 million SF (28.6
pre-leased) Proposed 9.9 million SF Existing
Blocks of 50,000 SF available 9
Looking to Lease?
Washington, DC
77 K St NE
NoMa is the new upcoming place to be for large
blocks close to downtown!
Class A Space!
NoMa is looking forward to NPR and DOJ moving
in!
NoMa is now friends with UNITED STATES DEPARTMENT
OF JUSTICE.
1100 1st St NE
NoMa is now friends with NATIONAL PUBLIC RADIO.
NoMa is now friends with YWCA.
Cathy Delcoco
Kathy Keller
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factbook
Capitol Hill
Looking to Lease?
Personal Info

• I pride myself on my history of the nations
  capitol. I am known as a center of influence for
  tourism and for powerful location to the nations
  decision makers.

About me
50 F ST NW
Submarket Stats
Inventory 6.4 million SF Vacancy 2.3
Class A Vacancy 0.5 Avg. Rental Rate
48.30 full service 2008 Net Absorption
(2,400) SF 2007 Net Absorption (98,000) SF
Under construction 524,476 SF (32.5
pre-leased) Proposed 2.5 million SF Existing
Blocks of 50,000 SF available 4
Class A Space!
Washington, DC
300 New Jersey Ave NW
Capitol Hill is the place to be for lobbying
firms and access to the Hill.
Capitol Hill is trying to build its own
statistical history now that it is on its own.
Capitol Hill is now friends with BUREAU OF
PRISONS.
Capitol Hill is now friends with CONSTELLATION
ENERGY GROUP
Capitol Hill is now friends with DEPARTMENT OF
HOUSING AND COMMUNITY DEVELOPMENT
Cathy Delcoco
Kathy Keller
16
factbook
Southwest
Looking to Lease?
Personal Info
Ive been known to have a bad rap in past. I am
a federal government enclave.
About me
370 LEnfant Promenade
Submarket Stats
Inventory 10.1 million SF Vacancy 20.9
Class A Vacancy 28.2 Avg. Rental Rate
49.30 full service 2008 Net Absorption
729,000 SF 2007 Net Absorption (1,251,860)SF
Under construction 932,819 SF (29.3
pre-leased) Proposed 1.1 million SF Existing
Blocks of 50,000 SF available 12
Class A Space!
Washington, DC
Southwest is awaiting the redevelopment of the
Southwest Waterfront.
425 3rd St SW
Southwest wants to be known in the future as the
place with cultural attractions.
Southwest is now friends with FEDERAL AVIATION
ADMINSTRATION.
Southwest is now friends with FEDERAL EMERGENCY
MANAGEMENT AGENCY.
Southwest is now friends with BOOZE ALLEN
HAMILTON.
Cathy Delcoco
Kathy Keller
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You have a new friend request!
Capitol Riverfront sent you a friend request
Accept?
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factbook
Capitol Riverfront
Building for Sale!
Personal Info
Birthday
2008
About me
The new kid on the block!
100 M ST SE
Submarket Stats
Inventory 3.9 million SF Vacancy 8.8
Class A Vacancy 7.6 Avg. Rental Rate
45.05 full service 2008 Net Absorption 11,900
SF 2007 Net Absorption Just Created Under
construction 932,819 SF (9.5
pre-leased) Proposed 10 million SF Existing
Blocks of 50,000 SF available 16
Looking to Lease?
Washington, DC
Capitol Riverfront has a new name and wants to be
considered a player!
1111 New Jersey Ave SE
Class A Space!
Capitol Riverfront is excited to finally be
considered a submarket!
Capitol Riverfront is now friends with US COAST
GUARD.
Capitol Riverfront is now friends with CACI
INTERNATIONAL.
20 M ST SE
Capitol Riverfront is now friends with GRYPHON
TECHNOLOGIES.
Cathy Delcoco
Kathy Keller
19
factbook
Wendy Feldman Block
Wendy is
Women In Real Estate
Join NOVA CREW!
Wendy is now friends with CAPITOL RIVERFRONT!
Wendy is preparing for her CREW presentation
National Connections
Wendy is attending CREW 2009 STATE OF THE MARKET
Wendy is now friends with CENTRAL BUSINESS
DISTRICT (CBD)
Wendy is now friends with EAST END
Wendy is now friends with WEST END/GEORGETOWN
Join NAIOP!
Wendy is now friends with NOMA
Wendy is now friends with SOUTHEAST/CAPITOL HILL
Know Office Requirements
Central Business District
Wendy is now friends with SOUTHWEST
West End/ Georgetown
East End
Wendy joined the group LEED THE FUTURE
My Groups!
LEED The Future, DC Hospitality Club, Residential
Real Estate Club, Retail and Art Lovers, NOVA CREW
Southeast/Capitol Hill
NoMa
Southwest
Join BOMA!
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LEED the Future

• 11 LEED existing properties totaling 2 Million SF
  in 2008
• 30 properties currently seeking LEED
  Certification, of which only six are under
  construction total 1.4 Million SF
• 800 17th St NW first building to achieve LEED
  Platinum Certification
• New Administration could positively impact LEED
  standards
• Economy is depressing some interest in LEED based
  on costs
• Costs could be an issue for recruitment and
  retention of employees, particularly law firms.

Wendy Feldman Block
Cathy Delcoco
Kathy Keller
Olivia Millar
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Hospitality Industry Club

• Highest price per room in 2008 was Renaissance on
  M Street key price of 398,000 per room
• Renovation of former Hotel Washington to a W
  Hotel underway best roof deck in DC,
  overlooking the White House
• Slow transaction market in 2008 attributable to
  credit crunch, investor uncertainty and lack of
  liquidity
• Gaylord National Resort in Prince Georges County
  opened March 2008 long term impact on DC Hotel
  industry unknown
• Financing not in place for proposed Convention
  Center Hotel. Marriott hoping for spring 2009
  ground breaking
• Comprehensive renovations of two of the largest
  hotels in DC - 100 million at the Hilton
  Washington and 100 million of the Marriott
  Wardman Park
• Tremendous concern about business travel and
  convention business over the next year

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Residential Real Estate Club
High population and employment has kept DC
housing market stable and strong
Basic Info

• Reasonable sales of condos pre financial meltdown
  (until Sept 08)
• Paralysis in condo market post meltdown
• Asking prices have held.for time being
• Jumbo mortgages hard to get and very expensive
• Limited supply of condos in desirable areas
• No new construction started, pipeline dry (24
  month cycle)
• Ongoing movement of condo projects to rental

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Retail and Art Lovers

• DC strong compared to suburban markets
• Not a lot of downward pressure on rents downtown,
  at present
• Hot areas Gallery Place, Connecticut Avenue
  between K and M Streets, 14th Street Corridor
• Recent announcement of 10,000 square foot
  restaurant lease by Buddah Bar at 455 Mass
• Stadium area hasnt delivered, yet literally
  and figuratively
• NoMa retail Harris Teeter committed but expect
  mostly tenant support retail rather than
  destination
• Question about long term viability about
  abundance of bank branches, could anticipate some
  consolidation and closing.
• Expect little demand for new bank branches which
  has been commanding the highest rentals.

Wendy Feldman Block
Cathy Delcoco
Kathy Keller
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Expectations for 2009

• Financial bailout could create need of 2-4
  million SF for the government in the District
• Investment sales market anticipated to decline
  further and through 2009 and possibly into 2010
• Operating expenses and taxes are expected to rise
  by 22.
• NoMa has redefined the acceptable markets and
  other tenants may follow suit behind NPR and DOJ
• Residential condo market will likely stabilize
  with limited new housing starts
• Capitol Riverfront will continue to struggle as
  it works to define itself
• DC expected to weather recession better than
  surrounding municipalities -strength of
  government and shift of financial center to area

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Whats Out and Whats In