Rents are Rising in the Empire of Debt's Capital City
As The Daily Reckoning has anticipated for some time, a shift in power and money is taking place… office rents in Washington, DC are quickly becoming the highest in the nation, even more expensive than those in New York City. It’s yet another indication that the US capital, home to the political elite that controls the American purse strings, is becoming the new center of wealth generation for lobbyists, government contractors, law firms, and the like. Worse still, it’s a development that’s fundamentally taking place at the taxpayer’s expense.
Here are two recent examples from the New York Times:
“When law firm McGuireWoods LLP shopped for a new location this spring on K Street, the prime location for lobbying firms, it wasn’t expecting any bargains. ‘We were told that rents were not dropping dramatically so we weren’t expecting to save a lot of money on base rent,’ said Steven Kittrell, managing partner in the Washington office. The firm plans to increase its health-care and energy lobbying practice as well as its Securities and Exchange Commission enforcement and white-collar litigation practice.
“By contrast, it’s been a brutal year for New York landlords. ‘Rents have fallen faster and more furiously than in any other time in the last 30 years,’ said Mitchell Steir, chairman and chief executive of Studley, the tenant-brokerage firm.”
What was once a much larger gap in rents between the two cities has narrowed, and DC is expected to edge out NYC in 2010:
“… average rents in Washington were $41.77 per square foot, down 3% annually. Reis estimates that by the end of this year, rents in New York will come down to around $41.07, slightly below their estimates for Washington of $41.27.”
It’s a transformational time in the history of the nation. Washington, DC has made one more stride toward consolidating its role as both the political and economic center of the country… which is, of course, exactly the wrong way in which to reduce the frequency of shady dealings of money for political favor.
For more details see the New York Times coverage of how office rents are signaling the rise of DC and fall of NYC.