Washington is still waiting to see what Congress does on spending.

WASHINGTON, DC-First the bad news. The DC area posted its worst year on record in terms of absorption, Jones Lang LaSalle reports: 3.3 million square feet of negative net absorption. Now the good news: more than half of that was due to BRAC, or the Base Realignment and Closure Act, JLL Research Director Scott Homa tells GlobeSt.com. “Much of that space was functionality obsolete and should have been vacated earlier,” he says. “So the numbers aren’t quite as bad as they seem.” In short, he says, 2012 was a challenging year but it felt more like a period of stagnation than sharp contraction.

Even with that caveat, however, the numbers are indisputably dismal. Leasing was down over 20% and tenants that did move took on average 15-20% less space. Also, renewals accounted for over half of the transactions in the market in 2012.

Then there is the resolution to the fiscal cliff – a resolution in which Congress addressed the tax side of the equation but temporarily punted on the spending. In other words, Homa says, “do not expect to see an outpouring of pent up federal space requirements. They will still all have to do more with less.”

Not that Homa is discounting the measure Congress did pass. The DC area market has been aching for some kind of certainty about federal policy and even delivering on just part of that is a welcome change, he says. “Obviously more fiscal battles are looming and hopefully with them we will get some kind of clarity.”