While residential real estate in the D.C. area is showing signs of life--housing starts are up, building permits are up--commercial real estate is still on the decline.
In Fairfax County, Virginia that means some development goals will have to be put on hold. The county is trying to revitalize some of its older commercial areas, such as Richmond highway and Baileys Crossroads. County planners want denser, mixed use development to anchor town centers. But few developers are in positions to build.
"To find financing for development is much more difficult today," says Krista DiLaconi, Senior Vice President of JBG Rosenfeld, a retail development firm. "Because of the risk inherent in development today, you're finding investors looking for higher returns but renters not wanting to pay higher rents."
Leonard Bogorad is a Managing Director with real estate consulting firm RCL CO. Like many developers, he says Fairfax County may see some development, but not the dramatic high-rise urbanization some hope for.
"It can often be a trade off between getting something we don't want at all and something that's realistic financially," says Bogorad.
There are 14 million square feet of vacant office space in Fairfax County alone. Some developers say new commercial development is at least five years away.
Sabri Ben-Achour reports...