D.C. CRE market sends mixed messages

Commercial real estate in Washington, D.C., experienced positive and negative aspects.

Property management companies in the Washington, D.C., area may have experienced some difficulty getting tenants for office properties, despite overall vacancy rates at typical U.S. levels, according to Erica Champion, senior real estate economist with CoStar.

In the past two years, the national office vacancy rate has declined steadily. However, in the nation's capital, it rose over that time period, Champion explained, in an article for The Washington Post. In the greater Washington metropolitan statistical area, Northern Virginia has struggled the most. Approximately 3 million square feet in property has been vacated over the past 12 months.

Despite the struggles, within the city limits has showed a more positive situation, Champion noted. Vacancy rates fell since this point last year, even though approximately 1 million square feet of space was added to the district's total. In addition, 8.8 million square feet of space was occupied, and rents increased by approximately 1 percent.

Investment has declined in the region significantly, she added. In the first half of this year, close to $2.3 billion in property transactions occurred. However, that figure is 40 percent lower than the $3.8 billion which occurred during the same period in 2011.

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