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Government Expansion Will Fuel 2010 Office Absorption
The federal government will lead the office market recovery, especially in Washington, D.C. According to Jones Lang LaSalle’s 2010 U.S. Federal Government Perspective, the federal government will need at least 4,000,000 SF of new space nationally this year, though the lion’s share will be in the Washington, D.C. market.
The need will be driven primarily by adding staff related to increased financial regulation and restructuring, which are receiving funding to carry out new or expanded mandates. “This is a significant concentration of absorption given net private and public demand across the United States combined does not equal 5,000,000 SF” according to the report.
Jones Lang LaSalle predicts that federal demand will slow after the November 2 mid-term elections. “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 D.C. metro market,” said Joe Brennan, director of Jones Lang LaSalle’s government investor services team. “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.”