Washington, D.C.'s office market remains defined by vacant cubicles and dark floors, but secure space is an important exception. Demand for Sensitive Compartmented Information Facilities, known as SCIFs, is rising across the region as defense and intelligence work expands, creating a specialized market even as federal contracting cuts weigh on conventional office demand.
The market's growth is tied to defense spending and the technical requirements attached to classified work. Bisnow reported that JLL's SCIF inventory across Northern Virginia and Maryland grew 430% over five years, while defense contract spending in that footprint rose from $46.1 billion in 2023 to $76.3 billion in 2024 and $79.7 billion in 2025. The figures help explain why secure facilities are emerging as a relatively resilient segment of the region's office market.
A Market Racing to Keep Up
JLL's secure-environments project volume rose from 907,000 square feet in 2023 to 1.3 million square feet in 2024 and 1.6 million square feet in 2025, according to Bisnow's reporting. The firm accredited 35 SCIFs in 2025 and had 1.3 million square feet of SCIF work underway in 2026, with plans to accredit 45 spaces by year's end. That activity reflects a supply gap: Nicholas Dichiara said demand greatly exceeds available space, encouraging landlords that previously had little experience with classified facilities to enter the business.
SCIFs are designed to block radio waves, sound and other surveillance technology, and every one in the country is governed by Intelligence Community Directive 705, the baseline security standard issued by the Office of the Director of National Intelligence. Under those technical specs, perimeter walls and doors must meet Sound Group 3 or Sound Group 4 ratings, engineering standards stringent enough that normal speech becomes unintelligible outside the room, or in the case of Sound Group 4, even loud sounds are barely audible. That level of acoustic and electromagnetic shielding is why construction costs run so high in the first place.
The Price of Secrecy
Building an accredited SCIF in a commercial building typically runs $350 to $1,000 per square foot, according to Area Development, far above the cost of a standard office fit-out. The premium comes from specialized physical security, electromagnetic shielding and a requirement for cleared construction labor throughout the build. JLL notes that constructing a SCIF requires continuous security oversight and approval of a Construction Security Plan by an Accrediting Official, a process that can stretch project timelines up to 36 months.
Contractors are expanding selectively to meet the demand. Bisnow reported that Hitt Contracting's private-sector SCIF work grew 20% to 30% over the previous year and a half, while Davis Construction increased the number of SCIF projects it handles at once and began certifying additional employees in the specialty. Clune Construction also invested in staff and technology after receiving 10 SCIF opportunities in a month and a half, according to the outlet. The activity illustrates how labor, security procedures and specialized expertise are becoming constraints alongside available floor space.
Regulatory Whiplash Adds to the Uncertainty
Part of the current scramble traces back to a federal directive released in 2025 that required SCIF space to be upgraded to new standards focused on improved radio frequency protection, with an initial 2028 deadline. That directive was rescinded in May 2026, according to the same reporting, leaving final SCIF requirements and deadlines unclear. Even so, companies are building new SCIF spaces at new locations and contractors are renovating existing ones, betting that some version of tighter standards will eventually take hold.
New defense contract requirements now call for SCIF components even from smaller companies, reflecting a federal push to contract with a wider variety of defense firms. That shift helps explain why the Department of Defense launched its “Secure Space Network” initiative on September 3, deploying roughly 50 transportable SCIFs nationwide, according to DefenseScoop. The program is aimed squarely at small businesses and non-traditional defense contractors that can't afford the millions required for a proprietary build. Similar shared-SCIF pilot programs, functioning like cleared coworking spaces, have been floated in recent years to let small tech firms and universities do classified work without the years-long wait for a dedicated facility, per the Federation of American Scientists.
Landlords With SCIFs Hold the Cards
Because SCIFs generally cannot be transferred to another tenant in a completed state, once a landlord builds one, they tend to keep the tenant that uses it. JBG Smith has leaned into that dynamic hard: the company reports 92% of its GSA tenancy at National Landing includes a SCIF, and its August shareholder letter described particularly strong demand for secure space there. JBG Smith calls SCIF delivery or assignment a key differentiator in tenant discussions and has described its SCIF presence as a difficult-to-replicate competitive advantage.
That advantage showed up in practice in 2025, when the Department of Labor returned a significant amount of space at National Landing. JBG Smith backfilled it with a secure government user instead, part of what the company describes as an almost entirely mission-critical GSA tenancy. New leasing activity elsewhere backs up the broader trend: defense contractor Peraton signed a 285,000-square-foot lease across two buildings on Woodland Pointe Avenue in Herndon during the second quarter, the region's largest office transaction of the quarter, according to a Cresa market report. Northern Virginia's office market posted 446,292 square feet of positive net absorption that same quarter, nudging vacancy down slightly to 22.5%, a shift Cresa attributes largely to defense contracting expansion.
The scale of government-controlled office space in the capital region underscores why this niche matters to landlords. As of May 2026, the Department of Defense maintained roughly 34.9 million square feet of office space in the National Capital Region, with 10.2 million square feet leased at a cost of about $318 million annually, according to the U.S. Government Accountability Office. Experienced SCIF landlords are capturing much of the available demand, even as other owners try to enter the market, though detailed leasing and occupancy figures remain difficult to assess.
What the public record can—and cannot—show
Official data provide a broad measure of the federal footprint but not a complete picture of secure-space utilization. According to the U.S. Government Accountability Office, the Department of Defense managed about 35 million square feet of office space in the National Capital Region as of March 2025, including government-owned and leased space. GAO also found that more than half of DOD office spaces in the region had not reported occupancy data as of September 2025, underscoring the limits of federal office-use statistics. Public contract awards offer another indication of the scale of defense and intelligence spending, but they do not directly establish office occupancy or SCIF demand. The National Geospatial-Intelligence Agency announced a $646 million Glacier Bay contract award to Palantir USG in Springfield, Virginia, on September 26, 2025; the award is evidence of a significant government investment, not a measure of how much secure real estate the work requires.
The current wave isn't the region's first brush with classified real estate demand. Following the September 11, 2001 attacks, developers in Anne Arundel County and Northern Virginia built hundreds of thousands of square feet of secure space near NSA and Pentagon installations to meet a similar spike in demand, according to reporting from the Associated Press at the time. Two decades later, the same forces of federal defense spending and security compliance are once again determining which office buildings thrive and which sit empty in the nation's capital.
