Skanska Adds to D.C.’s Office Burden
- Jul 17, 2015
There’s a new office building coming to D.C., courtesy of development and construction giant Skanska USA.
The New York-based arm of the Swedish construction giant Skanska AB announced this week that it is investing $116 million to develop a Class A office building in Washington, D.C.’s Capitol Riverfront submarket. The 11-story structure will offer about 237,000 square feet of space, and will include ground-floor retail and four below-grade parking levels. The project is designed to achieve LEED Gold certification.
Construction is scheduled to begin later this summer, with completion expected in the fourth quarter of 2017. Skanska USA Building is the construction manager. Skanska has stated that it will add a contract value of $56 million to order bookings for the third quarter of 2015.
According to Marcus & Millichap’s Office Market Report for the second quarter of 2015, new office properties are being completed throughout the Greater Washington area despite the weak employment growth and underwhelming demand for existing space. Builders have delivered almost 3 million square feet of office space in the past 12 months. This year’s additions alone have increased the region’s total inventory by 0.6 percent, and there are still more than 7.3 million square feet in the planning stages.
Marcus & Millichap expects the area’s deteriorating vacancy to convince developers to take a break for the remainder of the year. The real estate investment services firm also predicts the number of completions for 2015 will be more than two times lower than last year’s levels.
Charts courtesy of Marcus & Millichap.