advertisement

ADVERTISEMENT


ADVERTISEMENT


ADVERTISEMENT


TOP JOBS



Share on Facebook
Share on Twitter
Delicious
E-mail this article
Leave a Comment
Print this Article
advertisement

The announcement that ExxonMobil will move 2,100 jobs to the Houston area from its 1.15 million-square-foot campus in Fairfax County is cause for concern, given the deteriorating outlook for near-term Northern Virginia office space demand.

Federal office space consolidations under the Base Closure and Realignment Act have been mostly completed, but leases for some properties have not yet expired.

The Fairfax County fiscal 2013 advertised budget "Trends and Demographics" report, and other county data, indicate the rate of employment growth during the past decade for county residents and those who work in Fairfax has slowed.

The county Department of Neighborhood and Community released "Demographic Reports 2011" in May 2012. That report shows total employed residents increased from 539,893 in 2001 to 572,951 in 2010, an average increase of 3,300 residents per year during the past decade.

According to Virginia Employment Commission data, nonagricultural "at place" employment in Fairfax County increased from 532,900 in June 2002 to 584,600 in June 2011. The VEC data show a peak of 592,000 in Fairfax County employment was reached in 2007. Employment growth for those working in Fairfax County averaged 5,100 persons annually in the past decade.

Given the rapid increase in federal spending for contractors and services by the departments of Defense and Homeland Security after the Sept. 11, 200, terrorist attacks, these increases seem modest.

At the typical historical rate for office space occupancy of 250 square feet per person, the indicated net average office space demand for all Fairfax County since 2001 was 1,275,000 square feet annually.

By contrast, the total office space base in Fairfax County increased by more than 55 million square feet during the 1980s. In the past decade, office completions by Fairfax County totalled almost 30 million square feet. The total county office space base at the end of 2010 was 124.8 million square feet.

Overdevelopment of office space occurred in many markets in recent years. It is little wonder that the overall Northern Virginia office vacancy rate reached a high of 16 percent as of mid-2012, the highest rate recorded since 2002, according to the Cassidy Turley Office Market Snapshot.

Cassidy Turley reports an inventory of 55.5 million square feet inside the Capital Beltway (excluding Fairfax County space) with a 16.4 percent vacancy rate, and an inventory of 99.7 million square feet outside the Beltway with a vacancy rate of 15.8 percent. Cassidy Turley has reported three consecutive quarters of negative office space absorption in Northern Virginia , with 1.8 million square feet less occupied overall at mid-2012 on a net basis than in September 2011.

At the Loudoun County Economic Development Commission June 2012 meeting, Bob Buchanan, an experienced office building developer who also is president of the 2030 Group, told the audience two major trends will reduce the growth rate in future office space demand.

First, the federal government, in its quest for improved energy and cost efficiencies, has reduced its average space occupancy for federal workers by some 50 percent in recent years. For new federal office leases, the typical office space per worker now is less than 200 square feet.

Second, as more and more workers work at home at least part-time, companies — led by contractors and consultants such as Accenture and Booz Allen Hamilton — have adopted a "hoteling" approach to office space. This allows multiple workers to use the same office space each week. With advances in portable computing and communications devices, Buchanan expects more companies to adopt this approach in planning new office space requirements.

Rob Whitfield, Dulles Corridor Users Group