Downsizing Office Requirements from the Public Sector: Any Lessons to be Learnt from Trends in the Washington DC Office Market with Relevance for Germany´s Berlin Office Market?

Bernhard Funk

ERES from European Real Estate Society (ERES)

Abstract: The world´s capitals tend to attract office tenants and office building owners from the public sector. This includes government entities, but also state and local authorities. Furthermore, law firms, consultants, lobby groups and similar tenants associated with the public sector complement the demand pool for office space in capitals. Authors including Cyril Northcote Parkinson and Laurence J. Peter early-on developed a pessimistic view on bureaucracies, arguing for instance that the number of workers tend to grow in public organizations, but that this figure does not hinge on the real amount of work. Current US federals politics picks up on similar lines of thought led by the current government of United States of America entering the stage of implementation for downsizing government entities. Examples can be found manifold, with by example the Committee on Oversight and Government Reform organizing a hearing in February 2025 on the topic “Rightsizing Government“. These shifts cannot be ommitted when analysing regional patterns for office demand in capitals. The dependence of the office market in Washington DC on public sector tenants and owners is however, not new. This paper looks at findings from the Washington DC office market, with the following key questions in focus: Are there similarities notwithstanding the different political environments that can be applied to the German Berlin office market? Which factors should be taken into account drawing on experiences and trends in the Washington DC office market when looking at office demand trajectories in Berlin?

Keywords: Office Markets; Real Estate Investment; Real Estate Research; US Real Estate Markets (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2025-01-01
New Economics Papers: this item is included in nep-ure
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