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WASHINGTON, DC-GVA Advantis is set to release its Q1 report for the DC area market today. One main finding is that vacancy rates have edged up slightly as 12 buildings delivered over the course of the last three months totaling 1.4 million sf. This caused demand to drop slightly, the report concludes.

In Q1 the Washington office market recorded a vacancy rate of 9.4%. This compared with 8.9% in Q4 2006 and 8.9% 12 months ago.

“It is not that significant of a rise,” report author and research director Tonya Ginter tells GlobeSt.com. “As usual, government activity–leasing by government agencies and contractors–is keeping the Washington metro area strong.”

The larger-than-usual impact of the government, though, can be most seen in the rents for class B buildings, the favored space for contractors and the government. “We are seeing rents increase for class B buildings, because that is where these agencies typically go,” Ginter says.

In DC, in the CBD, class A and class B space, respectively, leased on average at $45.84 and $39.36 per sf. In the East End, those numbers are $47.08 and $39.41 per sf. The cheapest rates in the District were found Uptown at $40.25 and $29.22 per sf.

Few, though, expect to see vacancies creep much higher especially in the high prestige neighborhoods such as the East End. Law firms, in particular, are addicted to the K Street NW addresses. Ginter points to one of the largest transactions during Q1 as an example: Drinker, Biddle & Reath LLP inked a renewal and expansion totaling 93,171 sf in the Southern Railway Building, at 1500 K St. NW in the East End. It renewed roughly 60,000 sf and expanded by 33,000 sf, she says.

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