Partly Sunny

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Partly Sunnywith a Slight Chance of Growth
2009 Annual Arlington Real Estate Review and
Forecast
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Theres A Lot of Storms Out There
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2007-2009 Credit Crisis and Recession

• Housing bubble and subprime lending
• U.S. consumer spending and debt
• High leverage (financial derivatives)
• Stock market decline
• Devaluation of assets and liquidity problem
• Overall tightening of credit
• Low consumer confidence
• Further implications on budget deficit, currency,
  inflation rates, etc.

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2009 Forecasts of Washington Metro Area
Economists
Source Washington Post
5
(No Transcript)
6
Annual Job ChangeWashington DC Metro Area
Thousands
Annual Data
2008 Annual Month Over Year
Source GMU Center for Regional Analysis
7
Business EstablishmentsArlington, VA
Source Virginia Employment Commission, 2nd
Quarter Data
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At Place EmploymentArlington, VA
Source Virginia Employment Commission, 2nd
Quarter Data
9
Average Weekly WageArlington, VA
Source Virginia Employment Commission, 2nd
Quarter Data
10
Unemployment
8.0
6.0
4.0
2.0
0.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
Arlington
Northern Virginia
US
Source Virginia Employment Commission, 2nd
Quarter Data
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Principal Private EmployersArlington, VA
Total corporate employment for all Arlington
locations In transition and data
unavailable Source Arlington Economic
Development, February 2009
12
Selected 2008 AnnouncementsArlington, VA
Source Arlington Economic Development
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Private Office Market Comparisons
Source CB Richard Ellis, 4th Quarter 2008
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Office Availability by Regional
SubmarketSelected Washington Area Submarkets
With Sublet Source CoStar, March 5, 2009
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Office Availability by SubmarketArlington, VA
With Sublet Source CoStar, March 5, 2009
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Office SF CompletedArlington, VA
Source Northern Virginia Realtors Association
17
Major Office Projects CompletedArlington, VA
Source Arlington Department of Community
Planning, Housing and Development
18
Major Nonresidential Projects Under Construction,
2009Arlington, VA
Square Feet Rooms Source Arlington
Department of Community Planning, Housing and
Development
19
Selected Approved Nonresidential
ProjectsArlington, VA
Square Feet Rooms Source Arlington
Department of Community Planning, Housing and
Development
20
Net Office Absorption, 2008
Source Realty Firms
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Mortgage Foreclosure RatesWashington Metro
Jurisdictions
Number of Foreclosures per 10,000 Housing Units
Source GMU Center for Regional Analysis
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Home SalesArlington, VA
Source Northern Virginia Realtors Association
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Average Home Sales PricesArlington, VA
Source Northern Virginia Realtors Association
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Sample Condo Sale Prices The ContinentalArlingto
n, VA
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
C1
C2
C3
C4
C5
Condo Sale
Source Arlington County Real Estate Assessments
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Rental Apartment Vacancy Rates Arlington, VA
2008
Source Housing Survey, Arlington Department of
Community Planning, Housing and Development
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Residential Units Completed Arlington, VA
Source Northern Virginia Realtors Association
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Major Residential Projects CompletedArlington, VA
Condominium Source Arlington Department of
Community Planning, Housing and Development
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Major Residential Projects Under Construction,
2009Arlington, VA
Condominium Source Arlington Department of
Community Planning, Housing and Development
29
Selected Approved Residential ProjectsArlington,
VA
Condominium Source Arlington Department of
Community Planning, Housing and Development
30
Retail SalesArlington, VA
Source Virginia Department of Taxation
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Retail Space in Major New ProjectsArlington, VA
Source Arlington Economic Development
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Retail SF CompletedArlington, VA
Source Northern Virginia Realtors Association
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Washington National Airport
Source Metropolitan Washington Airports Authority
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Characteristics of Selected Hotel Markets
(October)
Source Smith Travel Research
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Hotel Rates and OccupancyArlington, VA
Source Smith Travel Research and Arlington
Commissioner of the Revenue
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Hotel Rooms Completed Arlington, VA
Source Northern Virginia Realtors Association
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AEDs Outlook for 2009

• The economists agree (sort of), but fail to find
  the black cloud in the silver lining.
• We have seen some limited downsizing, but not the
  major losses of past years and certainly nothing
  like the dot.com bomb.
• The office market looks better than we might have
  expected, with new starts planned this year.
• There has not been much degradation in the
  housing market, with quite a few projects about
  to start. Sales may be soft, but prices look to
  remain relatively stable.

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AEDs Outlook for 2009

• Retail sales will probably decline somewhat,
  however unemployment will still be modest and
  incomes will remain high, keeping demand strong
  among the Metro Renters.
• The visitor industry may still have some stress
  ahead. Government and business austerity
  measures are likely to remain in place for some
  time, restricting travel. On the other hand,
  this is Washington at the start of the Obama
  administration and the region has not had this
  kind of interest in decades. Occupancy rates are
  relatively high and are likely to remain well
  above national levels.
• Most economists suggest that the recession will
  be first in, first out, but in Arlingtons case
  it is more likely to be last in, first out.

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2008 Annual Arlington Real Estate Review and
Forecast
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