Research

Lincoln Property Company’s in-house Research department advises clients on the constantly changing commercial real estate environment, helping them make quick market decisions, or plan long-term strategies. Please contact us to receive a copy of our marketing materials, or to discuss the D.C. commercial real estate market today.

Washington D.C.

Inventory (RSF)
144.1 Million SF
Direct Vacancy
10.5%
YTD Absorption
277,731 SF
Asking Rental Rate (FS)
$52.30 FS
Total Vacancy Rate
11.4%
Download Report
DC2Q2017MarketReport.pdf

The Washington, DC office market consists of 784 buildings over 25,000 square feet, totaling approximately 144.1 million square feet of rentable space. As of May 2017, the unemployment rate for the District of Columbia increased to 6.0%, while the Washington, DC Metropolitan area decreased to 3.6% (ranking 11th nationally). The national unemployment rate decreased to 4.4%. The DC Metropolitan area gained 48,300 net new jobs from May 2016-May 2017, representing 1.5% growth. Professional & Business Services lead the private sector with 15,600 new jobs; while the Government added 6,300. The largest public sector lease executed this quarter was a renewal by the GSA for the Department of Education for 314,243 square feet at 550 12th Street, SW – Potomac Center South. Washington Gas signed the largest private sector lease with a 70,056-square-foot transaction at 1000 Maine Avenue, SW – The Wharf. There were eight sale transactions in DC, totaling $566,261,000. The largest sale was Unizo Holdings purchasing 1325 G Street, NW and 1341 G Street, NW – The Colorado Building for $259,000,000 ($588 psf).

Northern Virginia

Inventory (RSF)
182.0 Million SF
Direct Vacancy
15.5%
YTD Absorption
353,145 SF
Asking Rental Rate (FS)
$32.47 FS
Total Vacancy Rate
16.3%
Download Report
VA2Q2017MarketReport.pdf

The Northern Virginia office market consists of 1,529 buildings over 25,000 square feet, totaling approximately 182.0 million square feet of rentable space. The largest non-GSA lease signed during the second quarter was a 400,000-square-foot relet by Amazon Web Services at One Dulles Tower – 13200 Woodland Park Road in the Reston-Herndon Corridor submarket. The largest lease signed by the GSA was a 71,504 square-foot renewal for the DEA at Avion Mid-Rise IV – 14560 Avion Parkway in the Route 28 Corridor South submarket. Building sales volume totaled approximately $1,100,811,669 during the second quarter. The largest transaction was the sale of Waterview Tower – 1919 N. Lynn Street in the Rosslyn-Ballston Corridor submarket. Morgan Stanley acquired the building from Paramount Group for $460 million ($711 psf). The property was 99.0% occupied at the time of sale, and traded at a 5.11% Cap Rate. The second largest sale was 1801 N. Lynn Street trading from Morgan Stanley to GSA Office of Portfolio Management for $240 Million ($686 psf). The building was purchased by the tenant. Inside the Beltway, there were 53 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2017, compared to 55 from the first quarter 2017. Outside the Beltway, there were 81 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2017, compared to 80 from the first quarter 2017.

Suburban Maryland

Inventory (RSF)
86.7 Million SF
Direct Vacancy
15.1%
YTD Absorption
245,983 SF
Asking Rental Rate (FS)
$26.73 FS
Total Vacancy Rate
15.7%
Download Report
MD2Q2017MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 86.7 million square feet of rentable space in 889 office buildings of 25,000 square feet and greater. The market recorded a significant decrease in net absorption in the second quarter with -503,622 square feet absorbed, down from the 749,605 square feet absorbed in the previous quarter. Direct vacancy increased to 15.1%, up from 14.6% and total vacancy increased to 15.7% from 15.2%. There were three sales transaction in Suburban Maryland this quarter. 15245 Shady Grove Road in the North Rockville submarket sold to Glazer Properties from Meritage Properties for $24.7 million. 415 Hungerford Drive in the Rockville submarket sold to Promark Real Estate Services from HBW Group for $14.5 million. 6116 Executive Boulevard in the North Bethesda submarket sold to Goodstone from LNR Partners for $9.5 million. The largest public sector lease executed this quarter was a renewal by GSA-NIH for 19,141 square feet at 2115 East Jefferson Street in the North Bethesda Submarket. The largest private sector lease was a lease signed by Kaiser Permanente for 172,863 square feet at 4000 Garden City Drive in the Landover/Largo/Capitol Heights submarket. The year-over-year unemployment rate in Suburban Maryland increased to 3.3% in May 2017, up from 3.2% in May 2016. From May 2016 to May 2017 employment in Suburban Maryland had a net increase of 14,186 new jobs, representing 2.10% growth. Sectors with the greatest amount of job growth were Professional & Business Services with 3,600 jobs, the Government with 2,100 and Leisure & Hospitality with 1,300 jobs.