Washington, D.C. – A report released today by the Metropolitan Washington Council of Governments (COG) indicates that 2008 saw the fourth-greatest amount of commercial construction (measured in terms of total square footage of projects) started in the region since 1980. The report, Commercial Construction Indicators: 2008 Annual Summary, indicates that 402 commercial construction projects were initiated in the metropolitan Washington region in 2008, 71 fewer than in 2007. However, the level of construction, determined by overall square footage and monetary value of projects, increased by 14 percent over the previous year.

In 2007, 473 commercial construction projects were initiated, for a total of 32.8 million square feet and a value of $5.6 billion. In 2008, the 402 commercial construction projects that were started totaled over 37.3 million square feet, with a value of over $6.3 billion.

“Commercial construction is a bellwether for the region’s economy,” said Frederick Alderman Alan Imhoff, Chair of COG’s Metropolitan Development Policy Committee. “While all jurisdictions in the region face challenges in the current economic environment, this year’s report shows that we are fortunate to be in a region anchored by the federal government, as we start to see signs of some new or expanded federal facilities throughout the region and as we move towards the 2011 BRAC deadline.”

Much of the increased square footage and value comes from two projects associated with the Base Realignment and Closure (BRAC) process: the National Geospatial Intelligence Campus in Fairfax County, Virginia and Bethesda Naval Medical Center in Bethesda, Maryland. Together, these projects account for 3.3 million square feet and are valued at $1.8 billion (8.8 percent of the total square footage and 29 percent of the total value of commercial construction projects initiated in 2008, respectively).

Thirty-six percent of new commercial construction was located in Metrorail station areas. A total of 56 projects, accounting for more than 13.3 million of space and 36 percent of the region’s total commercial construction activity, broke ground in Metrorail station areas in 2008. Twenty-seven new commercial projects were initiated in commuter rail station areas, for a total of 5.4 million square feet. The three Metrorail stations with the most new commercial construction in 2008 were Medical Center, Union Station, and Waterfront-SEU.

Regional Activity Centers and Clusters captured slightly more than half of new commercial space in the region. A total of 148 commercial construction projects were started in 2008, consisting of more than 19.8 million square feet. The new space in these centers accounts for nearly 53 percent of the region’s new construction activity, compared to 47 percent in 2007. Regional Activity Clusters, which are comprised of groupings of Activity Centers, captured 66 percent of the region’s new commercial construction activity, compared with 63 percent in 2007. Downtown Washington, D.C. received the greatest amount of new space, with 26 projects totaling over 9 million square feet.

The District of Columbia added 35 new projects and over 9.7 million square feet of new space in 2008. The overall square footage of new commercial space nearly doubled from 2007, with a majority being new mixed-used projects. Suburban Maryland added 163 new projects in 2008 for a total of more than 11.3 million square feet, an eight percent increase in new commercial space compared to the previous year. Northern Virginia, despite leading the region in the creation of new commercial space (with 204 projects in 2008 for a total of more than 16.2 million square feet), saw a net decrease of seven percent in new commercial space from 2007 to 2008.

Overall, commercial construction activity in 2008 increased from 2007 in the central and inner suburban jurisdictions and decreased in the outer suburban jurisdictions. Central jurisdictions held 33 percent of the region’s commercial construction starts in 2008, inner suburban jurisdictions 44 percent, and outer suburban jurisdictions 23 percent.

Each year, COG releases a report on findings from its Commercial Construction Inventory, providing information on the level of commercial construction activity in the region during the previous year. The Inventory includes major non-residential projects that are under construction in the metropolitan Washington region and only includes projects with estimated construction costs of more than $200,000.

To view and/or download the Commercial Construction Indicators report, including charts and graphs, click here.