WASHINGTON, DC-The bad news is that sequestration is almost surely going to happen. The good news, relatively speaking, is that the DC area may have suffered the worst of it already. For starters, the federal government has been rightsizing for years, Jones Lang LaSalle's Joe Brennan tells GlobeSt.com, noting that the administration has released memos directing federal agencies to cut real estate costs by at least 20% and freeze space portfolio expansion. Likewise, he continues, congressional appropriators have reviewed large space requirements that require congressional approval, forcing agencies to work with higher space utilization rates in their procurements.

Also, the region has been buffeted significantly by the uncertainty coming out of Washington, DC. To finally get some idea what will happen – even if it is across the board cuts – will, in a way, be a relief. "A lot of the real damage to the commercial real estate market has been done already with the scare tactics, " Brennan says.

The same can't be said about the local economy, which will clearly feel the pain of federal employees furloughed a day or more every pay period, or however the cuts come down. "That is something federal government workers are bracing for and it will have a ripple affect throughout the economy," Brennan says.

These furloughed days, though, won't impact landlords too much, though. "It is unlikely that there will be significant federal space contraction due to sequestration in addition to current mandated contraction initiatives," is Brennan's conclusion.

Other conclusions he makes:

• While there certainly has been progress towards leaner federal portfolios, federal holdovers and short-term extensions have become more commonplace as GSA prioritizes near term leasing decisions. This leasing triage allows landlords to take advantage of premium holdover and short-term extension rents and protects them from the immediate political threats of deficit reduction.

• A federal leaseholder with a lease that is in the middle of its term has little reason to worry about sequestration or federal footprint reduction as well. More than likely, Brennan speculates, stringent federal real estate scrutiny will have passed by the time the lease rolls.

• A federal leaseholder with a short-term lease expiration might find the lease is scrutinized more than it has been in the past, "but budget uncertainty might force your tenant agency to seek a short-term extension at a premium."