With commercial construction money dried up, no offibe building projects have started in Washington, D.C. since last October.
Written by Kevin Doyle
How’s this for a conundrum? While President Barack Obama signed the American Recovery and Reinvestment Act into law last month, construction in Washington, DC is at a total standstill.
According to The Washington Post, not a single office building has been started in the District since October, a sign that the slowdown that began in the far-out suburbs has now reached prime city locations. Most of the projects were financed before money for commercial construction dried up.
"Things are frozen. Nobody's doing anything," said Gerry Widdicombe, director of economic development for the city's Downtown D.C. Business Improvement District. It is the first time in nine years that there's been such a long period with no groundbreakings, according to the brokerage firm Cushman & Wakefield.
One $1 billion development was halted when two large equity institutions backed out because of their own financial woes. Another developer was unable to secure $400 million in financing to to turn several blocks next to the new convention center into restaurants, shops, offices and housing, but says he can't get a loan.
The Post reports it's not just over-the-top projects in far-out suburbs that are hurting. Well-located projects with deep-pocketed developers are having trouble getting financing, according to analysts, brokers, lenders, investors and developers.
Even with the Department of Justice -- a gold-plated tenant -- signed up for part of a 2.2 million square-foot project at First and N streets NE, it took Bethesda-based developer StonebridgeCarras more than seven months to close on a $193 million construction loan.
One prominent architect said he's trying to collect $3 million on bills that are four months late from developers. Layoffs are becoming more widespread at development companies, brokerages and law firms. Locally, more than 200 architects and engineers have been laid off, according to trade groups. And 25,000 construction workers in the area are out of work.
Source: The Washington Post