Demand Growing in Washington, D.C., Office Market, Columbia Property CEO Says

Nelson Mills, president and CEO of Columbia Property Trust, Inc. (NYSE: CXP), participated in a video interview at Nareit’s REITworld: 2018 Annual Conference in San Francisco.

Mills noted that Columbia Property has repositioned itself from a 32-market portfolio to one that focuses on just three core markets: San Francisco, New York, and Washington, D.C. He said the company focuses on “dynamic neighborhoods” that attract growing tech companies and advertising and media tenants, as well as traditional financial clients.

Turning to individual markets, Mills said San Francisco is “stronger than ever” in terms of capital demand, as is Manhattan. Although the New York market has softened in the last couple of years, there’s “still an incredible amount” of demand there, according to Mills. Washington, D.C., meanwhile, is the softest of the REIT’s three markets, but demand there is growing.

Mills noted that the tenant base in Washington, D.C., has expanded beyond government affairs and law firms to incorporate tech and media tenants. “The demand side is significantly improved; however, there is substantial new supply and new development that we’re absorbing. It’s going to take some time before we really start to see an increase in net effective rents,” he said.