Washington, D.C., CRE market may have notable trends this year

The commercial market in Washington, D.C., may have some specific trends occur this year.

There could be some significant influencers in the Washington, D.C., commercial real estate market this year, as many factors may determine how successful continued recovery ends up.

The overall level of demand for the market may not be exactly what local property management companies are looking for, as there could be continued hesitation due to economic uncertainty in the market, Sandy Paul wrote in a piece for the Washington Post. The office market may suffer from a lower amount of leased space, while the federal government does the same. There also may be a pricing issue in the multifamily market, as rental prices may be more in favor of tenants than property managers.

Despite this, there may be some positives for commercial property managers. The retail market may see some gains in the near future, as internet shopping may help grow the sector, the senior vice president and national research director at Delta Associates explained. There also could be some strengthening in the industrial sector, as technological improvements may help ramp up demand, while vacancies may drop due to the the increase of data center usage.

There also could be some issues in the job market, despite private sector experiencing a notable improvement in figures throughout the district during 2012, Paul noted. There was more than 27,000 jobs gained in the private sector last year, which was more than 10,000 higher than the average rate. Despite this, private sector issues remained, as the job gains were less than 7,000.

Total rent levels may fall by as much as 2 percent during the year, as vacancies may also continue to climb, Paul added.

Fannie Mae financing improves in 2012
More property investors in both the Washington, D.C., area and throughout the country may have taken advantage of financing in the past year. Lending levels from Fannie Mae improved markedly during that period.

There was more than $33 billion in financing issued from the government-sponsored enterprise, according to its report. This helped fund approximately 560,000 units in the multifamily market, overall. Nearly all of these financing agreements were completed through mortgage-backed securities, as well. Additionally, the GSE worked through its Delegated Underwriting and Servicing program in order to make these loans work, which is something that has been popular for more than two decades.

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