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Washington Area Commercial Real Estate Market Update


Third Quarter 2014
In collaboration with Delta Associates, CohnReznick is pleased to publish its first quarterly Washington Area CRE Market Update. The report will examine the national and regional economy, review the state of the real estate market – office, apartments, condominiums, retail, and housing – and discuss the impact demographics have on the market.

The new report released today cites recent performance of the real estate markets in the Washington, DC metro area generally parallels the consistent, if modest, improvement in the regional economy. Since Federal austerity measures began early last year, the region’s job growth during this recovery has felt anemic compared with prior expansion cycles. As Washington shifts away from its dependence on the public sector, growth in the private sector combined with pent-up demand for goods and services will help to spur job growth over the remainder of this business cycle, perhaps through 2018. Renewed momentum in the national economy, given the rise in consumer confidence nationwide, will anchor regional economic growth and could bode well for the local real estate markets.

The report’s key findings include:

  • Demographics will play the greatest role in determining the health of virtually all sectors of commercial real estate in the foreseeable future.
  • The slowdown in the regional economy has negatively impacted the Washington metro area office sector but investors from around the world continue to see long-term value in Washington despite its short-term hurdles.
  • Regional economic and demographic shifts have favored Washington’s apartment sector and the Washington condominium market remains on the rebound.
  • The retail sector is holding up well with decline in vacancy rates at shopping centers metro-wide now accelerating while effective rents have been rising gradually.
  • Price gains and sales activity in Washington’s residential housing market have tapered.


For more information on this report and other commercial real estate issues, please contact David Kessler, CohnReznick partner and National Director, Commercial Real Estate Industry Practice, at david.kessler@cohnreznick.com or 301-657-7755.


About Delta Associates
Delta Associates is a firm of experienced professionals offering consulting, valuation, and data services to the commercial real estate industry for over 30 years. The firm’s practice is organized in four related areas: valuation, consulting, litigation support, and subscription data. For more information on Delta Associates, please visit DeltaAssociates.com.

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