So, what do the largest leases tell us about the state of the leasing market in the Washington, DC Metro? A major theme emerges – the government may be down from a jobs standpoint, but they are certainly still a huge force in the office market.
Leases by the federal government have made up 6 of the 10 largest deals in the region so far this year. In the District of Columbia, two of the largest federal government deals executed so far this year - National Park Service (NPS) and Veterans Affairs (VA) have been short-term extensions – an all too common occurrence over the past two to three years. The District is not alone – Northern Virginia’s largest deal for the Department of Defense was a three year extension of over 600,000 square feet (sf).
There have been some exceptions to the short term extension trend, however. One example is the National Labor Relations Board (NLRB) in a move out of the District’s urban core into the emerging Capitol Riverfront submarket. In the suburbs, the Bureau of Safety and Environmental Enforcement, the Centers for Disease Control and Prevention and the National Institute of Child Health and Human Development (NICHD) all inked long-term deals. While being the largest deals in the market, a major drawback remains. Nearly all of the federal leases represent significant downsizing as the GSA continues to struggle to reduce its footprint among other new standards being enforced with new leases. Upon examination of large federal leases currently in the market, this reduction is not expected to end in the near-term. The extent to which the continual addition of relet space to the market negates net demand from job growth remains a big question mark.
The DC Metro real estate community holds out hope that more federal leases transacted will be like those NLRB, BSSE, NICHD and CDC - namely long term deals that lend certainty and confidence to investors in the market.
200 Stovall St.
GSA – Department of Defense
555 13th St., NW
1301 K St., NW
1201 Eye St., NW
GSA- National Park Service
1800 G St., NW
GSA- Department of Veterans Affairs
1015 Half St., SE
GSA- National Labor Relations Board
1500 Westbranch Dr.
2277 Research Blvd.
Client Network Services, Inc.
Northern PG County
3311 Toledo Rd.
GSA – Centers for Disease Control and Prevention
4040 N. Fairfax Dr.
6710 Rockledge Dr.
GSA NIH Child Health and Human Development
By: Nathan Edwards
Director of Research, Cassidy Turley - Washington, D.C.
Email Nathan: Nathan.Edwards@cassidyturley.com
Follow Cassidy Turley on Twitter: @CassidyTurleyRE
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