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News release

WASHINGTON, DC

DC Office Market Regaining Strength but Stakeholders Should Prepare for Challenges According to JLL Study Commissioned by the DC BID Council


WASHINGTON, May 2, 2016 — The District of Columbia’s office market is regaining its strength after a period of post 2008 stagnation, though it has yet to return to its pre 2008 performance levels, according to a report commissioned by the DC BID Council and supported by the Office of the Deputy Mayor for Planning and Economic Development (DMPED) in the DC government.

According to the report led by JLL’s John Sikaitis, the District of Columbia office market sector’s improvement and its ranking as the strongest in the Washington region (and among the strongest in the nation) is due to economic diversification, private sector real estate rightsizing peaking in the current cycle, and the highest level of leasing momentum in nearly a decade.

At the same time, JLL states, “a slowdown in the growth of the federal government, competition from other jurisdictions and speculative development in the pipeline pose future challenges to the office sector’s continued health.”

The report highlights the overall DC office market strengths and weaknesses along with the unique characteristics and challenges of each DC office submarket. In response to DC’s office market challenges, JLL offers a range of neighborhood-specific economic development recommendations to position the market for continued momentum and cushion the city’s economy from future office market challenges.

“It’s clear that as the District of Columbia market continues to evolve, city leaders must remain attentive, creative and agile to respond to challenges and opportunities and ensure that the District remains a preeminent office destination,” said Joe Sternlieb, BID Council President and CEO of the Georgetown BID. Adds Leona Agouridis, Executive Director of the Golden Triangle BID, “JLL’s report contains a wealth of data, analysis and creative ideas to help BID and city decision makers understand and respond to opportunities in the District’s varied office submarkets.”

The BID Council joined forces with the Office of the Deputy Mayor for Planning and Economic Development to develop and oversee the study. “Quality research and solid data are key to fostering good policy,” says Brian Kenner, Deputy Mayor for Planning and Economic Development. “We supported the BID Council’s effort to gather the economic intelligence needed to shape an effective and meaningful strategy around this important sector of the District’s economy.”

The District’s office market hosts 488,500 office space using jobs (or 63% of DC’s total employment of 773,300 as of March 2016), including federal and DC government employees, lawyers, nonprofit and association employees and professional and business service employees. It generates approximately $1.1 billion per year in real property taxes, or 15% of the city’s total local general fund revenue of approximately $7.3 billion.

“A healthy office market is very important to the city’s economic and fiscal health,” says Neil Albert, President of the Downtown DC BID. “This study demonstrates the BID community’s commitment to partnering with city agencies. Individually, each BID has a wealth of knowledge about its neighborhood economy. The study drew on that knowledge to create an up-to-date profile of each office submarket. Putting this detailed information into a city, regional and national context will help BID and city leaders strengthen and diversify the city’s economy in ways that benefit all residents.”

“The big takeaway from the report is that continued growth and dynamism in the District’s office economy requires a keen understanding of the varied and nuanced factors that have shaped its evolution,” explains Robin-Eve Jasper of the NoMa BID. One of the themes that comes through in the report is the importance of public spaces, place-making and neighborhood vitality in tenant location decisions, "More and more,” says Jasper, “ office tenants want vibrant, walkable mixed-use neighborhoods with a range of amenities and transportation options. These qualities are key to the District’s competitive advantage in the region’s office economy, and a key component of what DC BIDs work to create.“

The study is available here.

About the DC BID Council
The DC BID Council is an association of Washington DC's ten business improvement districts. Collectively, our members spend $27 million dollars per year to help manage and enhance neighborhoods that are home to 70% of the DC employment base and 40% of the city’s tax base. The DC BID Council brings together BID leaders and stakeholders to collaborate on issues and concerns that cut across all of our boundaries and impact the entire city. For more information, visit www.DCBIDCouncil.org

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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 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.