News ain’t good for the office developers among us. According to a recent report, government leasing basically hit a wall in the third quarter, allowing the vacancy rate to rise. Private sector job growth is doing better, but contraction in government contracting could be a drag in the long term.
The apartment market, though, is still going gangbusters. The overall vacancy rate for Class A buildings is an astonishingly low 1.6 percent, and rents are still on the rise. Sure, developers are getting nervous about a lot of supply coming online at the same time over the next two years, but it still looks like a safer bet than office space.
At least, that’s the bet that two NoMa players made in late August, when J Street Development sold 100 K Street NE to residential titan Archstone, which plans to build 206 apartments on the site over the next two years. J Street had contemplated 215,000 square feet of office condos, but it just doesn’t look like demand is in the cards.
A new apartment building, though, is probably good news for the neighborhood. NoMa’s already got plenty of offices, and millions more square feet on the way with Burnham Place. More people living there would help move it further away from the kind of government-centric wasteland some have feared NoMa might become, and give more people means to live closer to their jobs.
Just if you were looking for a silver lining in the prognostications of doom.