The first slack in five years of strong leasing and pre-leasing activity for new office space in the D.C. area has appeared according to the Washington Board of Realtors.
"It appears that the Tysons Corner market may be slowing down temporarily There are several buildings substantially unleased and currently available. Space seems to be staying on the market for a longer period of time than in recent history," wrote J. Fernando Barruetta, chairman of the WBR commercial leasing committee, in a recent office space report.
Barruetta, expanding on his report, said the word "temporary" should be emphasized. He attributed the slowdown in real estate leasing in some areas and a general loss of confidence to the energy crunch.
The WBR report also said "an enormous amount of space has been leased in the past year and this lull may be a natural valley following peak absorption (of office space)." In recent years, the metropolitan area absorption of new space has increased from 2 million square feet a year to 3 million.
The WBR report also noted that "Prince George's County has a tremendous amount of space under construction and planned. Leasing activity seems to justify this boom, but absorption will have to be above average of the past few years if space is to be readily leased without substantial vacancies."
In regard to the downtown office leasing market, the WBR report noted "virtually no available space in 1979 and very little space in 1980," with leasing rates continuing to climb. The report concluded that "It may take a business downturn to create an oversupply of (downtown) office space in the foreseeable future."
In detail, the WBR report lists 2.4 million square feet of new office space coming onto the D.C. market in 1980, with 2 million feet still available for leasing, although 451,000 square feet are classified as pending. In 1981, 1.8 million square feet are expected to become available.
In Virginia, the report notes 1.1 millionn square feet of new space becoming available this year, with 408,000 feet still available and 2.2 million square feet as available among the 2.9 million expected to be completed in 1980.
In Montgomery Country, 1979 available space was calculated to be 733,000 square feet, with 576,000 square feet still available. The outlook for 1980 is 1.3 million feet of new space with 1.2 million still available.
The Prince George's report notes 518,000 square feet of office space available this year and 333,000 still available. Most of the 900,000 square feet scheduled to be built in 1980 and 1980 is still unleased.