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News release

WASHINGTON, DC

Robust Labor Market Suggests “Happy New Year” On the Way for Metro DC Office Market


WASHINGTON, Jan. 6, 2016 – With the Washington region’s unemployment rate at 4.2 percent, the lowest it has been since October 2008, a new report from JLL suggests there will be substantial leasing activity in the office market across the Washington region in 2016.

The professional and business services sector, which accounts for about half of total office-using employment, has consistently seen year-over-year gains in excess of 20,000 jobs since mid-2015.

“In our experience, office demand typically follows employment growth but is six to 12 months behind,” said Doug Mueller, Managing Director, JLL. “Given the rate of job growth in the region, we are already starting to feel the increased demand for office space.”


Some of the pending office demand was felt in the fourth quarter of 2015 as the volume of deals over 20,000 square feet increased 69.8 percent over the past quarter. Increased leasing activity in submarkets such as Capitol Hill, CBD, Georgetown and Southeast pushed vacancy rates below 11 percent and in Crystal City and Rosslyn-Ballston helped push vacancy down by 4.5 percent and 1.4 percent, respectively, year-over-year.

“Given a resurgence in private sector hiring and restored stability in government spending due to the passage of the 2015 Bipartisan Budget Act, we anticipate that 2016 will be a strong year for the Metro DC office market,” said Scott Homa, Mid-Atlantic Research Director. “The issues related to BRAC and sequestration are largely behind us, so this year the market should turn the page and see the return of normalized levels of tenant demand. Combined with a restrained development pipeline, supply-demand dynamics in most submarkets should hit an inflection point in which concessions top out and moderate increases in asking rates signal a balanced, but strengthening, market.”   

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $57.2 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.