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The election of President Donald Trump initially had sparked optimism in the financial markets, but the political roller coaster of the last few weeks has the stock market lowering expectations, and it appears Northern Virginia is not immune.
As the Trump administration's speed of political appointments has lagged — 455 positions are still awaiting a nominee — the number of contracts awarded to NoVa defense contractors from February through April was down 49% year-over-year, JLL research shows.
Contractor executives have told investors on earnings calls that the dip in awards is due to the administration's delay in filling positions, GlobeSt reports. Only 29 of the 557 executive branch positions that require U.S. Senate confirmation have been confirmed.
With defense contractors comprising a key segment of the NoVa office market, the drop in contracts does not bode well for a region still hovering around 20% vacancy. The recent congressional budget deal could provide a boost to the NoVa market, with the funding through September increasing defense spending by 3.5%.
But the political turmoil is not going away any time soon, with the Justice Department this week appointing a special counsel to investigate ties between the Trump campaign and Russia, an issue that could further delay key appointments, if not cause even more government upheaval.
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