WASHINGTON, DC-Jones Lang LaSalle recently reported encouraging statistics for the DC area. For the first time since the second quarter of 2008, all three jurisdictions of the greater metropolitan area recorded positive net absorption. The uptick in demand coincided with ever-dwindling development pipeline--tightening vacancy rates by about 40 basis points during the latest quarter.

The emerging markets of the District--Southeast and NoMA--are perhaps benefiting the most from this, Scott Homa, research director for JLL, tells GlobeSt.com. "It's definitely a landlord's market in Southeast right now, and the balance of power is quickly shifting in that direction in NoMa. Large blocks of space are being leased at a rapid pace in both markets." Tenants are continuing to find small blocks available, he continues, but the leasing environment is getting much more competitive in those areas.

The government--largely federal but also the District--is the driver behind this growth, of course, with the most recent illustration provided by the US Customs and Border Protection agency last week. It is occupying 85,000 square feet at 90 K St., NE in a 10-year lease--or 21% of the building, owned by a joint venture between Trammell Crow, Crow Holdings and Cottonwood Partners.

Constitution Square in NoMa is perhaps the most emblematic of this trend. GSA recently took 40,996 square feet at One Constitution Square to temporarily house workers as renovations on its headquarters are underway. The Department of Justice has taken all the space in the sister building, Two Constitution Square. 

The federal government accounted for nearly half of the city’s total leasing volume during the second quarter, Homa notes.