Steve Burns
WMAL.com

WASHINGTON – (WMAL) One way to tell how the regional economy is doing is to look at commercial construction. By that metric, the D.C. region still has a lot of ground to make up.

Despite being slightly above 2015 levels, 2016’s rates of commercial construction are still less than half of what they were prior to the Great Recession. The Metropolitan Washington Council of Governments reports just under 12.5 million square feet of office space was created in 2016. In 2007, the number was 25 million. Both are well below the report’s all-time highs in the mid- to late-80s, which sat around 37 million square feet.

The report also shows some concerns about the type of commercial development the region is seeing. The sectors most often associated with new jobs – offices and retail – saw slower growth than other sectors. In fact, retail was the only sector the report studied to show a decline from 2015 to 2016, but planners attributed that partly to the report’s exclusion of mixed-use development.

The big winner in 2016 was industrial space like data centers and warehouses, COG Regional Planner John Kent told WMAL.

“Those buildings have a lot of space, but often don’t pack in as many jobs as retail space and office space,” Kent said. “The most important building construction in terms of jobs are usually office and retail, and those have not rebounded as strongly.”

In 2016, 4.1 million square feet of new industrial space was created in the D.C. region. Office and retail saw 2.5 million and 1.6 million square feet, respectively.

As for where that development is going, the region had one jurisdiction far ahead of others.

“Loudoun County stands out, particularly because they’re very strong in the industrial sector,” Kent said. The District is also seeing healthy levels of new commercial development, he said.

The report also found a decline in development near Metro stations in 2016, something planners attribute to the large industrial developments that don’t necessarily make sense to put in the dense development around Metro stations. In 2016, 23 percent of all new commercial square footage in the region was within a half mile of a Metro station. In 2015, that number was 40 percent. Still, the report said, 55 of the system’s 91 stations have had at least one development open within a half mile of a station entrance over the last five years.

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