Northern Virginia Government Contractor Snapshot
Contractors make up a vital portion of the commercial office tenancy in the suburban Washington, DC Metro and over 30% of the overall tenant base in Northern Virginia and Suburban Maryland can be linked to the federal government and those private sector contractors that provide goods and services to it. With this in mind, federal budget austerity and sequestration have taken a toll on revenues for these firms. Contractor CEOs site margin pressure and increased competition for fewer contract dollars with more of those contracts being awarded on the basis of price alone. In turn, contractors are compelled to find cost savings in areas they can control – namely headcount and real estate costs. The result on the regional office market has been pronounced. With fewer seats to fill and technological advances allowing for further real estate efficiencies, vacancy for commercial office is at an all-time high in the suburban markets. There is a bright side, however. Not a day goes by without reports of another major data breach. Federal spending on cyber security, cloud computing, and healthcare IT will be areas in which federal spending will increase in the near term with the majority of the services to be performed by firms in the DC Metro region.
By: Nathan Edwards
Director of Research, Cassidy Turley - Washington, D.C.
Email Nathan: Nathan.Edwards@cassidyturley.com
Contributor: CJ Hardy, Research Analyst, Cassidy Turley
Follow Cassidy Turley on Twitter: @CassidyTurleyRE
More From Nathan Edwards: