Patriots Plaza III

WASHINGTON, DC-Brokers in the DC area market say that the federalgovernment – after finalizing several large, 100,000 plus leases inrecent months – is poised to do the same in 2010.Recently inked deals by the feds include the US Department ofAgriculture’s 330,000 square feet at a in SWnewly delivered380,087-square-foot Patriots Plaza III; the 167,000 square feet at 77 K St. , NE,that the IRS has just leased; and the close to 300,000 square feet that the Defense Department renewedin Rosslyn.

To be sure, these numbers are not very far off from typical Washingtonactivity by the feds – although they are higher due to the stimulusand other spending programs. “If you look at the DC area’s jobcreation figures from Feb. 1 to the end of November you will see wecreated over 40,000 new jobs — and 95% of those weregovernment-related desk jobs, Gerald Trainor, executive managingdirector with Transwestern, tells

Without federal activity Washington would be in the same boat as otherstruggling markets right now, CBRE’s Ernie Jarvis tells –so any bump up in activity is very welcome indeed. “When you take downlarge blocks of space the way that the government does, especially inemerging markets like NoMa or the Capitol Riverfront, it has a hugestabilizing affect. Without that activity, we would be in the sameposition as such markets as Dallas, Chicago and south Florida.”

Government demand is materializing, Jones Lang LaSalle’s Scott Homatells “It has taken a while for the stimulus to[translate into] significant occupancy growth, but it is finallystarting to happen.”

Homa believes the area will see additionalfederal growth in Northern Virginia in particular next year.Estimating the size of the growth, though, is more art than sciencedespite the relative transparency of the federal government for anumber of reasons starting with changing missions of federal agenciesand a likely painful operating budget. “I would say there will bemeaningful occupancy growth because of the government next year, butbeyond that I would hesitate to name a precise figure,” Homa says.