Amid the gloomy talk of commercial property as the “other shoe” in a real estate crash, Fairfax County’s director of economic development offered some increasingly scarce bits of optimism. With nearly all of the top federal contractors located in the county or basing their federal presence in the county, Economic Development Authority Chief Executive Gerald Gordon suggested Fairfax was well-situated to take advantage of federal money flowing from the $787 billion stimulus package. “When the stimulus money hits the streets, that portion of the stimulus which goes to the private sector is going to come through Fairfax County,” he said. That influx would help fill the about 12 million square feet of vacant office space in Fairfax. In each of the two years before the recession began, the county filled about 10 million square feet of offices. “In a good year we can take that 12 million down pretty quickly, to the point where we might see some new construction,” he said. “I don’t think we’re that far away from seeing that space start to be used up.” Vacancies in Northern Virginia are expected to “decline a little bit but remain elevated” over the next few years, said Elizabeth Norton, mid-Atlantic research director for Delta Associates.
Across the Potomac, officials also are keeping a close eye on rising vacancy rates, although they are cautiously optimistic.
Decisions made by Montgomery County government to restrict growth have lessened the risk of a collapsing commercial real estate market, according to David Platt, the county’s chief economist. The county’s growth policy limits construction near congested roadways or crowded schools. It also forbids development on an agricultural reserve that covers about one-third of the county. “We haven’t overbuilt,” Platt said.
