Washington, DC Office Market Bucking National Trends

WASHINGTON, D.C., July 22, 2009 — Although the recession is weighing on the Washington, D.C., employment base and office market, both have endured economic stresses better than expected, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Indeed, the year-to-date reduction in employment has not been as detrimental to the metro’s office market, as most of the losses are in blue-collar industries.

“Tight lending markets, fewer institutional buyers and fears of a deepening recession have all contributed to tepid office investment activity in the Washington, D.C., metro,” says Ramon Kochavi (top right photo), regional manager of the Washington, D.C. office of Marcus & Millichap.

Following are some of the most significant aspects of the Washington, D.C. Office Research Report:

· With work force reductions projected to peak in the second and third quarters, local employers will cut 25,200 positions, or 1 percent, from payrolls in 2009, following the elimination of 1,700 jobs last year. Roughly 4,300 office-using personnel will be let go this year, a 0.6 percent decline.

· After inventory expanded by 7.5 million square feet in 2008, construction output will fall to 6.5 million square feet this year, in line with the five-year average.

· Continued losses in office-using employment sectors will underpin a 220 basis point rise in vacancy in 2009 to 13.7 percent. Last year, vacancy increased 240 basis points.

· Metrowide asking rents are projected to decline 2.1 percent to $35.66 per square foot this year, while effective rents will recede 2.7 percent to $30.64 per square foot. In 2008, asking and effective rents gained 3.3 percent and 1.0 percent, respectively.

For a copy of the complete Washington, D.C. Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716