There are 71.5 million sf of vacant office space in the Washington D.C. region. The national real estate brokerage Marcus and Millichap expects one-fifth of metro D.C.’s total office space to be empty by the end of this year. And another 1 million sq of office space could come onto this market over the next several years as businesses vacate older buildings once their leases expire.
The D.C. suburbs are fast becoming the latest American ghost towns, according to the Washington Post, as work styles have changed, preferences have shifted toward walkable commutes, and government—the area’s biggest employer—has shrunk.
The corporate campus is far from dead—just ask Google, Facebook, and other Silicon Valley companies that are building massive new headquarters and reinventing this concept to be transit-oriented and Millennial-friendly.
The D.C. suburbs are fast becoming the latest American ghost towns, as work styles have changed, preferences have shifted toward walkable commutes, and government—the area’s biggest employer—has shrunk.
The U.S. Bureau of the Census’ latest estimate for the value of private office construction put in place was up, year-to-year, 24.6% in May to $55.4 billion. Spending on public office construction in May rose 26.9% to $46.6 billion.
But in certain states, there have been mass evacuations of office spaces. In New Jersey, pharmaceutical firms that once operated sprawling suburban campuses have left millions of square feet of office space, warehouses, and labs deserted.
Empty office buildings have been a fact of life in D.C. and its suburbs for a while. By mid-2014, 11 Montgomery County, Md., office buildings totaling 2.25 million sf stood almost or totally vacant, and another nine, totaling 1.4 million sf, were “almost totally available”.
A portion of vacancies is attributable to federal government cutbacks. The Post reports that government agencies have been evacuating office and warehouse spaces in droves. They vacated 7,315 buildings with 47 million sf of office space in 2014 alone, reports Federal News Radio.
Still, office construction continues in D.C., and some developers and AEC firms view this market’s office space surfeit as an opportunity, although most of the recent activity is occurring within the city’s limits.
Skanska disclosed last week that it is investing $116 million in a new office building in D.C. The giant contractor will develop and build a new 11-story, Class-A office building with ground floor retail and four below-grade parking levels in Washington’s Capitol Riverfront submarket. The total leasable space will be about 22,000 sm (237,000 sf). Construction is scheduled to begin later this summer.
Tishman Speyer recently paid $30.5 million to acquire 2020 M Street N.W., the longtime D.C. bureau of CBS News, which it will redevelop into a modern office, newsroom and studio space for the media giant.
On July 21, Carr Properties, a local owner/operator/developer, acquired Columbia Center, a 393,815-sf, 12-story Class A office building in Washington D.C., for an undisclosed amount. In May, the Post reported that Carr Properties had raised $300 million from Alony Htez Properties and Investments, one of Israel’s largest real estate investment companies, to invest in local office buildings and development projects.
Related Stories
Office Buildings | Feb 18, 2015
Why the mobile workplace isn't always mobile
Perkins+Will’s Janice Barnes addresses the nuance in mobility types and explains the importance of defining terms upfront.
High-rise Construction | Feb 17, 2015
Work begins on Bjarke Ingels' pixelated tower in Calgary
Construction on Calgary’s newest skyscraper, the 66-story Telus Sky Tower, recently broke ground.
Mixed-Use | Feb 13, 2015
First Look: Sacramento Planning Commission approves mixed-use tower by the new Kings arena
The project, named Downtown Plaza Tower, will have 16 stories and will include a public lobby, retail and office space, 250 hotel rooms, and residences at the top of the tower.
Codes and Standards | Feb 12, 2015
New Appraisal Institute form aids in analysis of green commercial building features
The Institute’s Commercial Green and Energy Efficient Addendum offers a communication tool that lenders can use as part of the scope of work.
Office Buildings | Feb 12, 2015
Is Houston headed for an office glut?
More than 13 million sf could be completed this year, adding to this metro’s double-digit vacancy woes.
Architects | Feb 11, 2015
Shortlist for 2015 Mies van der Rohe Award announced
Copenhagen, Berlin, and Rotterdam are the cities where most of the shortlisted works have been built.
Office Buildings | Feb 6, 2015
6 factors steering workplace design at financial services firms
Grossly underutilized space and a lack of a mobility strategy are among the trends identified by HOK based on its research of 11 top-tier financial services firms.
Contractors | Feb 6, 2015
Census Bureau: Capital spending by U.S. businesses increased 4.5%
Of the 19 industry sectors covered in the report, only one had a statistically significant year-to-year decrease in capital spending: the utilities sector.
Office Buildings | Feb 3, 2015
5 trends transforming workplace design
RTKL's workplace design expert Jodi Williams foresees healthier and more technologically enabled offices that allow productive worker interaction, wherever they happen to be.
Office Buildings | Feb 3, 2015
Bjarke Ingels' BIG proposes canopied, vertical village for Middle East media company
The tensile canopy shades a relaxation plaza from the desert sun.