Mid-Atlantic Research Reflections 2021 - Federal Government Sector
November 1, 2021
At the core of all things Washington is the Federal Government, an economic engine with 374,800 employees (12% of total workforce) and $96 billion in annual contract spending (17% of total GDP) across the National Capital Region. With nearly 95 million sq. ft. of owned and leased properties, GSA remains at the centerstage of the region’s real estate landscape.
GSA has leased 4.0 million sq. ft. of office space across the region so far in 2021—more than any other industry sector while also already surpassing its 2020 and 2019 leasing volumes with two months left in the year. Despite continued uncertainty and impact from remote work, most GSA leasing activity has been longer-term renewals. In the largest lease of the year, GSA preleased 1.2 million sq. ft. on behalf of the Securities and Exchange Commission at Douglas Development’s 60 New York Avenue, NE project. The SEC will relocate from within the NoMA submarket to its new headquarters by 2026.
Despite the increase in 2021 leasing volume, GSA has continued to reduce its leased portfolio in the region, following the “Freeze the Footprint” (2013) and “Reduce the Footprint” (2015) policies. Additionally, GSA is temporarily halting select lease executions until December 3rd in response to the October Continuing Resolution of the FY2022 federal budget. GSA’s regional leased presence peaked in 2014 at 57.5 million sq. ft. and has since shrunk by 20% to 46.2 million sq. ft.—the lowest level since 2003.