While Montgomery County has created jobs at a slightly faster pace than key competitors in Northern Virginia in recent years, there continues to be a glut of available office space, according to figures released Monday.
The county’s top economic development official does not foresee that changing much in the next few years.
“There is nothing from a program aspect that will change these numbers right away,” Steven A. Silverman, director of the Montgomery County Department of Economic Development, said Monday during a meeting with a council committee.
Montgomery has about 4.8 million square feet of its Class A office space vacant, or 13.7 percent of its total, and 4.3 million square feet of Class B space available, or 14.6 percent, according to figures presented in the meeting of the council’s Planning, Housing and Economic Development Committee. That’s up from about 8 percent available in late 2006.
Montgomery needs large companies to move in from outside the county and take up several hundred thousand square feet of office space at a time to make a significant dent, Silverman said. But with an even higher glut of office space seen in places such as Fairfax County, Va., and Prince George’s County, prospective companies are difficult to find, he said.
“The same challenges are seen in other counties in our region,” Silverman said. Fairfax’s Class A vacancy rate is almost 17 percent, while Prince George’s is 20.5 percent.
Besides the regionwide office glut, many employers are in cost-cutting mode and significantly reducing the space they consume, he said. “Several years ago, an employer with 200 employees might take 50,000 square feet,” Silverman said. “Today, they are more likely to be asking only for 25,000 or 30,000 square feet.”
County officials will continue to work with the private sector to find out better what to do to help fill office space, he said.
The latest figures from private firm Economic Modeling Specialists International showed that Montgomery added about 28,000 jobs since 2010, the low point of the recession for the county in terms of jobs.
That 4.5 percent growth rate in the past three years is slightly more than Fairfax County and City’s combined 4.3 percent rise and Arlington County’s 3.8 percent gain, according to EMSI.
Silverman and former county Councilman Michael Knapp, CEO of Germantown consulting firm Orion Ventures, also discussed a proposal to get the county’s incubator network more focused on sectors. The county-financed incubators help startups and young companies grow by providing space and services at rates lower than the private market.
The proposal is in the initial planning stages and would require increased funds and likely help from an outside firm with the realignment process, Silverman said.
Also Monday, County Executive Isiah Leggett (D) announced that a program formed last year to pump more funds into local community banks to invest in small businesses would receive $25 million more than the $10 million it got last year.
The Small Business Plus program has succeeded in helping boost loans made to small businesses, so it made sense to increase the investment, Leggett said.
Banks have to be headquartered in Montgomery County, have assets greater than $200 million and less than $5 billion, and meet certain financial soundness standards. Among the banks in the program are Capital Bank, Congressional Bank, EagleBank and OBA Bank.