Washington, DC – According to Cassidy Turley Research, Base Realignment and Closure (BRAC), announced in 2005 by the US Department of Defense to reorganize its military base structure, has the potential to make a significant impact on the suburban Washington, DC- Baltimore region’s employment, local businesses, and real estate markets.
Since the original 2005 BRAC recommendations, the total net impact on the DC metro continues to evolve. According to the latest information, Cassidy Turley foresees the following:
• Up to 15 million square feet of public and private office space will be impacted by BRAC • Over 5.4 million square feet of office space will be impacted in Arlington County alone, with approximately one third of the total office inventory in Crystal City.
• Although many agencies will meet the 9/15/11 deadline for the realignment plan, many will need to extend their leases in order to buy time. In Arlington County alone, one-third of BRAC-affected office space will be released in 2010/2011, while the other two-thirds will be released in 2012 or later.
• Roads, infrastructure, and public transportation around Fort Belvoir, Fort Meade and the Mark Center will be stressed as commuting patterns change.
• In the medium- to long-term, opportunities will exist for retail and housing to accommodate increases in employment at the Forts. In contrast, areas from which a large number of jobs will be relocating (like Crystal City) could be negatively impacted.
• Plans change. When the BRAC recommendations were first announced, an estimated 7,000 jobs of the Washington Headquarters Services were to relocate from Alexandria to Fort Belvoir, Virginia. Since then, 6,400 jobs are planned to transfer instead to the 1.4 million square foot Mark Center in Alexandria, which is proximate to the agency's current location.
• Overall, regional DC-Baltimore employment should remain healthy in spite of BRAC moves. For example, jobs will relocate from Crystal City in Arlington County to Mark Center in Alexandria. The two locations are located only a few miles apart from each other, thus the net impact from this move should be minimal.
• Defense contractors will not move immediately to coincide with agency moves. Any private business relocations will happen gradually. Moves will depend on the types and longevity of agreements contractors have with the DoD and existing lease agreements. However, the areas with the most opportunity for increased office space demand are in close proximity to Fort Belvoir, Fort Meade, and Aberdeen Proving Ground.
• Large defense contractors will be cautious about future growth projections. For instance, Lockheed Martin recently announced more conservative 2011 revenue projections due to anticipated defense spending cuts by the Federal Government.
Read more about the impacts of BRAC on Northern Virginia (suburban Washington, DC) and Baltimore, including the submarkets most likely to be affected, local employment trends, and the effect on commercial office space by reading Cassidy Turley’s DC/Baltimore Region BRAC Update.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with over 2,800 professionals in 60 offices nationwide. The firm completed transactions valued over $13 billion in 2009, manages over 420 million square feet on behalf of private, institutional and corporate clients and supports over 25,000 domestic corporate services locations. Cassidy Turley serves owners, investors and occupiers with a full spectrum of integrated commercial real estate services—including capital markets, corporate services, project leasing, property management, project and development services, and tenant representation. Outside of North America, Cassidy Turley has served the international needs of its clients since 1985. In 2010, the firm enhanced its global service delivery through its partnership with GVA Grimley. The firm recently ranked in the Top 10 on the Lipsey Co.’s Commercial Real Estate Top Brands Survey, and was ranked #1 by Real Estate Alert for Office Sales in 3 of the Top 6 Markets. Please visit www.cassidyturley.com for more information about the company.
Maureen Wheeler 202.463.1138