Yes, much of DC's commercial real estate market is comprised of national and international actors
So the Washington Post reports, in "Foreign investors snap up Washington real estate at an accelerating clip." From the article:
Rather than waning as sequestration cuts began to hit Washington in March, interest from abroad appears to be strengthening. Foreign sales account for 75 percent of all investments in Washington commercial real estate this year, after not topping 30 percent in the previous three years and registering just 1 percent in 2006. On average, foreign firms accounted for 17 percent of all sales since 2001.
Companies from countries such as Korea, China, Germany and Saudi Arabia have been scouring the Washington market for fully leased downtown office buildings, said Bill Prutting, managing director at Jones Lang LaSalle.
In years past, when a building went up for sale, “the investor used to be the local family or the domestic pension fund,” Prutting said. “Now, we have a lot more exotic investors from overseas who are coming into especially our market and other markets as well.”
I have made this point for awhile, most recently here, "Revisiting the issue of neighborhood commercial district tax methodologies."
Like any city, DC is actually comprised of a variety of "submarkets" like Downtown or Takoma or Fort Totten or H Street NE, Capitol Hill, etc.
The reason the nature of the market is important is that the participation of global actors reshapes the market for commercial property across the city, even in submarkets that don't normally have international or national actors.
And if they buy in part on the basis of other criteria (such as a safe haven for investment vis-a-vis their home country), they bid higher and the prices rise beyond the normal vicissitudes of the market. Which is why the "lede" of the story misses the point:
Foreign investors are pouring money into downtown D.C. office buildings even as many properties in the Washington suburbs struggle with stagnant leasing and growing vacancy.
Of course, foreign investors are buying properties in DC and not the suburbs, DC's central business district is recognized within the global market, while the suburban submarkets are not (Grosvenor, a British company, is active in the suburbs and likely Tysons will become a submarket with increasing global interest).
The submarkets comprising the Central Business District are decidedly global real estate markets, with nationally and internationally active developers, financing, and property owners.
Typically, the non-CBD markets in the city have been very much local, with small properties, local/regional owners with ties to the city, local developers, local tenants, and local patrons.
But because of the participation of global actors and how the city doesn't weight "global" vs. "local" property markets in terms of property tax assessment methods, prices in the non-global submarkets are higher than they would be on the basis of what the properties are worth as going businesses.
This is why a lot of the property has been vacant or in sub-optimal use (storefront churches, office, etc.), because it is overvalued tax-wise compared to the revenue prospects for the space.
But now there is a second stage of development and change for submarkets in the city that hadn't before attracted global/national players.
As the Central Business District is built out, in order to stay active, some developers are taking on projects in secondary submarkets in the city, especially at sites near subway stations, mostly residential multiunit housing, often with retail on the ground floor, so it qualifies as mixed use. Typically these locations aren't attractive for office use.
Typically the financing for these new projects in these districts is national. For example, Pritzker family interests financed the construction of the Monroe and Market development in Brookland, adjacent to the subway station there as well as to the Catholic University of America campus.
And that will end up reshaping these secondary submarkets in other ways, because the retail space in these projects ends up getting plugged into national credit markets, likely this will lead to more chain and franchise outlets, and fewer independents.
So once your central business district is part of the global real estate market, expect other changes in other submarkets. Better yet, anticipate the changes and take steps to ward off the negatives.