Mid-Atlantic Research Reflections 2022 - Aerospace & Defense

Washington D.C., Virginia, and Maryland all ranked in the top 10 states for defense spending as a percentage of state GDP and defense spending per resident, according to the most recent data available. Home to the Department of Defense, Virginia claimed the top spot for total defense spending at $62.7 billion. Additionally, Fairfax County received more defense dollars than any other county in the nation.

Despite the industry’s strong foothold in the region, A&D activity in Greater D.C. has been a mixed bag this year. While the FY 2022 National Defense Authorization Act authorized a 2.4% increase in national defense spending, Department of Defense contract obligations declined 16.4%. Gross leasing sits at 1.2 million sq. ft. year-to-date, muted from peak levels recorded in 2017-2019 and down from the historic annual average of 1.4 million sq. ft, but on pace with the average of 2020 and 2021.