Government to Lead 2010 Office Market Recovery
- Mar 30, 2010
March 30, 2010
By Allison Landa, News Editor
In a research report, Jones Lang LaSalle predicts that the U.S. federal government will lead this year’s recovery in office space.
The company’s 2010 U.S. Federal Government Perspective, which is produced annually by its Research and Government Investor Services department, examines national and regional market trends for government-occupied space.
Among the findings: multiple large government space requirements – more than four million square feet – have hit markets nationwide, particularly in the metro Washington, DC region, as federal staffing related to financial regulation and restructuring needs has increased and agencies are receiving additional funding to execute new or expanded mandates. Additionally, the report says that the majority of federal government real estate growth that was realized last year and projected for this year will be concentrated in the DC region, with upwards of 5 million square feet of net new absorption.
“This is a significant concentration of absorption given net private and public demand across the United States (not including Washington, DC) combined does not equal 5 million square feet,” the report asserts.
Additionally, federal demand this year is expected to be stronger than last year. However, JLL says it will be mitigated after mid-term elections, likely moving into an austerity period beginning in the middle of next year.
“Government leasing typically leads the private sector by six to 12 months, so this robust federal activity stands to help stabilize certain market segments – particularly the DC metro market,” JLL managing director of the government investor services team Joe Brennan said while announcing the news. “The force of the federal government’s real estate need will continue and intensify over the next 12 months as the Obama administration shifts from the planning stages to implementation and execution of a broad spectrum of programs and initiatives.”