Cybersecurity’s Growing Role In DC Region's Office Demand
A 4.1% increase in 2019 federal spending to strengthen federal networks against cyber-threats is expected to fuel demand for office space by these companies.
WASHINGTON, DC—Cybersecurity is playing an increasingly important role in the area’s office markets, according to a new assessment by CBRE.
“The government concentration on strengthening cyber-resistance is an increasingly powerful stimulus for the region’s digital industries and their footprints,” said Jonathan Hall, Vice President at CBRE. “Also the access to the largest cybersecurity employee population in the United States and increased investment opportunities in the sector is contributing to a positive influx of cybersecurity startups in the region.”
Perhaps more to the point, a 4.1% increase in 2019 federal spending to strengthen federal networks against cyber-threats is expected to stimulate cybersecurity firm growth—and a subsequent demand for office space, according to CBRE Research. In particular, Northern Virginia and Baltimore are expected to experience a noteworthy impact from the growth in cybersecurity.
Northern Virginia
In addition to hosting the region’s largest hub for government contractors, many of which specialize in cybersecurity, Northern Virginia is also the new home for Amazon’s bifurcated HQ2. The resulting demand for office space in the digital sector is expected to have a material impact on market fundamentals, CBRE writes. Specifically: cybersecurity has commanded 15% of total leasing activity since 2010, with the top 50 largest contractors alone occupying 9% of the office tenant mix.
Out of a collective footprint of 12 million square feet in Northern Virginia, office leases totaling 6 million square feet are set to expire in the next five years.
Baltimore
CBRE also notes that there are three cybersecurity firms eyeing the Baltimore area’s robust talent base with the goal of creating a national cyber-hub with headquarters in the Port Covington development, citing the Baltimore Sun as a source. Howard and Anne Arundel counties—with a focus in the Columbia, Fulton and Hanover submarkets—are expected to see growth that is driven largely by contractors that support federal agencies at Fort Meade, it also wrote.
