David Francis, The Examiner
2007-04-05 18:04:00.0
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WASHINGTON -

The office market in the Washington area experienced a slight slowdown in the first quarter of the year, according to a report from Delta Associates. The real estate research firm, in its quarterly report on the office real estate market, found an overall vacancy rate of 9.2 percent, up from 8 percent at the same time last year.

Despite an increase in vacancies, space under construction increased by 1.5 million feet from this time last year, from 18 million to 19.5 million. Of this new space, only 35 percent is expected to be preleased, down from 47 percent last year.

Even with an increase in space and a decrease in the amount of space rented, rents increased by 0.7 percent from the beginning of January to the end of March compared with the same period last year.

In its report, Delta Associates said because the amount of available space is greater than the demand for it, developers will likely lower rents to attract renters. The group also expects the pace of construction to slow over the course of the year.

Jane Quill, a commercial real estate agent in Northern Virginia and chair-elect of the Northern Virginia Association of Realtors, said an uptick in office vacancies is not an indication of problems in the commercial sector.

“As long as the economy remains good, I think [companies] are going to continue to come here,” she said.

dfrancis@dcexaminer.com