WASHINGTON, DC-It is little secret that the DC leasing market has been struggling and it is little secret why – the uncertainty of what is happening in the government and, to a lesser extent, BRAC. “We all know that in Detroit the main business is the auto industry and in Washington it is the government,” Jones Lang LaSalle’s Amy Bowser tells GlobeSt.com. “We are still dealing with BRAC-related vacancies and combine that with the significant defense spending reductions and we have a fairly significant damper on demand.”
That said, there are signs emerging that a turnaround may be on the horizon. These signs are anecdotal, but still heartening. JLL says that tour activity has been increasing and that leasing, while still slow, recently showed its first increase in seven quarters. Also, tenants in “emerging industries”, such as digital media, green energy and healthcare/life sciences have either expanded or entered the market with new requirements.
The large blocks of high quality space available are starting to diminish, Bowser says. “I think we will see a tightening of the market from the top down.”
Some of that is due to activity from these emerging industries, she says. “We are starting to see groups oriented around health care, for example, expanding. We are also seeing corporations starting to make news with respect to their real estate.”