Washington Slipping

Here is a free Wall Street Journal article on Vornado Realty Trust and its problems due to a weakening commercial real estate market in Washington DC.  I didn't know this market was softening because along with New York and Boston, Washington DC is always listed as one of the strongest real estate markets in the country.  I found these paragraphs interesting:

But Washington's engine of growth has been the federal government. As pressure builds on the government to rein in spending, landlords are getting pinched.

Vornado, a Paramus, N.J.-based real-estate investment trust, declined to comment.

The company's release said 1.1 million square feet was vacated because of a military consolidation program overseen by the Defense Base Closure and Realignment Commission. Vornado projected another 539,000 million square feet will be vacated by the end of 2015. Most of the properties hurt by the program are in Northern Virginia.

Vornado is recommending that seven Northern Virginia properties that secure $600 million of debt go to a special servicer.  Despite the downbeat tone of the article, its states that Washington DC still has the lowest vacancy in the country at 9.4%.