After making slight gains last year, commercial construction in the metropolitan Washington region declined by seven percent in 2017, according to the Metropolitan Washington Council of Governments (COG) 2017 Commercial Indicators Report.

Last year, the region added 144 new commercial buildings, totaling 12.7 million square feet of space, down from 160 new buildings in 2016 and a decline of almost one million square feet.

“Although commercial construction in the region is lower in 2017 than in 2016, it is higher than in previous years,” said COG Regional Planner John Kent. “The region is still recovering from the recession and reductions in federal spending, as commercial construction slowly picks back up.”

In 2017, Northern Virginia accounted for more than half of all new construction with 7.9 million square feet of commercial space, suburban Maryland added 2.5 million square feet, and the District of Columbia added 2.3 million square feet, according to the report.

The report looks at trends in location, type, and size of new commercial development – completed non-residential projects, including office, retail, industrial, healthcare, and hospitality properties – in metropolitan Washington.

Of the new development, office space grew the most, increasing by 50 percent, while other types of commercial spaces, including industrial, health care, hospitality, and retail all decreased in 2017. Five of the ten largest commercial construction projects by square feet were office buildings.

Additionally, of the 4.8 million square feet of new office space, 83 percent was located within a half-mile of a Metrorail station, which is the most since 2014. Overall commercial construction projects near Metrorail stations increased in 2017. The regional office vacancy rate was 14.2 percent at the end of 2017, a slight decline from 2016.

“The increase in new office construction and a slight reduction in vacant office space are positive signs for the metropolitan Washington economy,” said Kent. “Office buildings typically generate more employment per square foot than other land uses. Adding office space means local companies are expanding or firms are locating to the region.”