Overall, the Metro Washington office market saw 15.9 million sf of new construction and renovation projects during 2001. The number marks a notable increase over the 12.8 million sf figure for 2000. The bulk of that 2001 activity took place in the Northern Virginia area, where there were 9.2 million sf of construction and renovation projects.

The report also looks at office vacancies for end-of-year 2001 in comparison to the projected numbers through December 2003. Available office space, including sublets, at the end of last year was 30.6 million sf for the entire metro region. Add to that number an estimated addition of 18.7 million sf over the next 11 months, and the region will be left with 49.3 million sf of available office space by the end of 2003. Projected demand for that time is only 17.8 million sf, which will leave a vacancy totaling 31.5 million sf, or 9.4%. The vacancy rate for year's end 2001 was 9.6%.

Economic analyst Dr. Steven S. Fuller--who is also a professor of public policy at George Mason University--serves as counsel on the economy to Delta Associates and played a large roll in putting together the year-end report. In an article he wrote for a local publication last month, Fuller says, "the construction industry will see increased spending just in rebuilding the Pentagon, and leasing to accommodate displaced Pentagon employees may take as much as 1.2 million square feet of office space out of the inventory." And in the Transwestern/Delta report, Fuller and the research team conclude that prospects for the metro area's office market "remain bright." The positive forecast comes from the projected regional economic growth due to a step-up in government defense industry spending since the terrorist attacks. "Follow the money," Fuller said in a comment to the press earlier this week.