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WASHINGTON, DC-Government leasing activity–one of the mainstays of DC’s commercial real estate community–slowed down in the fourth quarter, causing vacancy rates to rise. The rise itself–a 0.4% increase to 6.5%, according to GVA Advantis figures–is still slight. However, the trend is worrisome especially as it is widely assumed that the government is not likely to abandon its fiscal restraint until at least after the presidential elections.

There were other contributing factors to the vacancy rate rise, which at Q3 was hovering at 6.1%, according to Tonya Ginter, director of research and marketing for GVA Advantis. The government pullback, though, is one of the biggest factors, she tells GlobeSt.com. “This has been happening for the last six months but we saw it much more so in fourth quarter. There just isn’t the same level of government spending on leasing activity as there was six months ago.”

Not that the government has completely ceased to rent space here. The Justice Department is keeping local property owners on tenterhooks as it takes its time deciding where it will lease out the 500,000 sf of space it still has pending. Areas of time reportedly under consideration, according to Ginter, include NoMa, Silver Spring and Southeast. There have been other deals inked in Q4 as well. The Department of Defense renewed for 106,559 sf at 901 North Stuart St. in the Ballston submarket of Arlington. Also, the US Army Corps of Engineers renewed for 218,638 sf at 1500 Wilson Blvd. in Rosslyn.

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