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- 141.7 Million SFInvestory (RSF)
- 9.2%Direct Vacancy Rate
- 10.9%Total Vacancy Rate
- -263,657 SFYTD Absorption
- $49.67 psf FSAsking Rental Rate (FS)
The Washington, DC office market consists of 783 buildings over 25,000 square feet, for a total of approximately 141.7 million square feet. Unemployment in DC decreased to 8.4%, down from 8.7% at the end of the third quarter 2012. Approximately 155,000 new jobs were created nationally in December, however, the national unemployment rate remained flat at 7.8% at the end of the fourth quarter. Approximately 2.40 million square feet was leased in the fourth quarter. This is the first time since the fourth quarter 2011 that leasing activity exceeded 2 million square feet. The largest private sector lease signed this quarter was by Covington & Burling for 420,000 square feet at CityCenterDC, 800 & 850 10th Street, NW. The GSA signed two of the larger lease transactions of the quarter with renewals for the Department of Justice at 1301 New York Avenue, NW (201,281 square feet) and 1400 New York Avenue, NW (168,158 square feet). Five office buildings sold this quarter, totaling approximately $1.07 billion, with the top sale occurring in the Southwest submarket.
- 178.7 Million SFInvestory (RSF)
- 14.3%Direct Vacancy Rate
- 15.6%Total Vacancy Rate
- -651,023 SFYTD Absorption
- $31.86 psf FSAsking Rental Rate (FS)
The Northern Virginia office market consists of 1,512 buildings over 25,000 square feet for a total of approximately 178.7 million square feet. The largest non-GSA lease signed this quarter was a prelease by Intelsat S.A. at Macerich’s Tysons Tower – 7900 Tysons One Pl for 188,000 sf. Intelsat will be the anchor tenant in hopes of attracting other major tenants to occupy the space when it delivers in the 1st qtr 2014. Government leasing was scarce again during the 4th quarter 2012; however, the largest lease signed during the past quarter was a 5 year extension by the GSA-Office of Naval Research at One Liberty Center - 875 N. Randolph St in the RB-Corridor for 310,829 sf. Building sales volume totaled $658,675,000 for the quarter, with the top 2 transactions occurring in the Reston-Herndon submarket.
- 84.6 Million SFInvestory (RSF)
- 14.6%Direct Vacancy Rate
- 15.5%Total Vacancy Rate
- - 163,096 SFYTD Absorption
- $25.68 psf FSAsking Rental Rate (FS)
The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties,contains over 84.6 million square feet of office space in 870 office buildings of 25,000 square feet and greater. Despite the reelection of President Obama and the conclusion to the political realm of uncertainty, the impending sequestration cuts and ambiguity related to federal spending reinforced the hold on office demand in the fourth quarter. While the bipartisan compromise on the fiscal cliff postponed spending cuts, it extended the incertitude of government contractors which appeared to
have a domino effect into the private sector as well. The fourth quarter recorded a -30,712 square feet absorption, an improvement from the -69,671 square feet in the previous quarter. The continued instability of the economy once again played a large contributing factor in tenant decisions to renew in place rather than expanding
or incurring costs to move. Landlords continued to accomodate their tenants with a
“by any means necessary” approach, as rents fell and tenant improvement allowances were given greater consideration. Leasing activity experienced a significant descent in annual numbers as it plunged from 2,480,000 square feet in fourth quarter 2011 to 845,574 square feet in fourth quarter 2012.
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