Sun. October 2, 2006
A report on the future of the District of Columbia’s office market, built on projections of workforce development in the city, paints a short- and long-term picture of sustained growth. The Office of the Deputy Mayor for Planning and Economic Development and the Downtown Business Improvement District (BID) commissioned the report to assess DC’s office market place and determine what actions are needed to sustain growth. Delta Associates and the Center for Regional Study at George Mason conducted the study.
The report projects that the city can expect a growth rate of approximately 7,200 workers annually, of whom approximately 5,000 will be office-using employees, along with a six percent increase in office space per worker. This would support absorption of approximately 1.9 million square feet of new office space per year. In turn, during the next 25 years, this annual growth would result in 143,000 new office jobs, requiring an additional 48 million square feet of new space to be added to the city’s existing 110 million square feet of space. These are dramatic numbers that set Washington apart from almost every city in the United States, both in terms of employment growth and growth of office space. They represent 21% of the regional market’s office space growth during the next 25 years.
The study affirms that there is ample development capacity in DC to
accommodate the projected demand for office space – 60 to 80 million square feet in total. Current estimates show only nine million square feet of developable space in what is known as Downtown Washington, but the areas surrounding Union Station and the Anacostia Waterfront Initiative site provide an estimated 20 million and 15 million square feet of available space, respectively. And, these markets have already experienced considerable development. In addition, the Armed Services Retirement Home and St. Elizabeth’s Hospital sites represent potential areas for significant new office development.
According to the report, in the short term, market forces appear to be very strong and have a certain degree of inevitability given recent job growth trends. Still, policy leaders in the District need to focus upon several significant issues challenging the medium and long-term growth of the office market. These include:
- Metro’s ability to meet future transit requirements for expanding both maintenance and capacity.
- Regional competition for DC’s office market based primarily on the higher costs and greater difficulty of doing business in the District.
- An increasingly less diverse office tenant market as cost-sensitive tenants move out of the city.
- Reliance on federal employment and procurement, which are subject to changes in federal policy.
City officials and business and community leaders already have begun responding to these challenges by:
- Working cooperatively with Metro to secure dedicated funding.
- Expanding business development efforts under the Deputy Mayor for
Economic Development’s direction to grow the private sector tenant base
(to capture a larger percentage of regional growth) and assure the
continuing presence of federal office functions and related businesses.
Recognizing the report’s outcomes as having a positive fiscal impact on the city, DC officials and business leaders also understand the social pressures additional office development creates. Correspondingly, they are working together to address a range of important social issues, such as providing more affordable housing, improving job training and development programs, as well as bettering the city’s public education system.
To download the executive summary or full text of the study, please click on a link below. Please note that some of these files are large and may take several minutes to download, depending on your connection speed.