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)
144.6 Million SF
Direct Vacancy
10.2%
YTD Absorption
170,044 SF
Asking Rental Rate (FS)
$51.74 FS
Total Vacancy Rate
10.9%
Download Report
DC1Q2017MarketReport.pdf

The Washington, DC office market consists of 784 buildings over 25,000 square feet, totaling approximately 144.6 million square feet of rentable space. As of February 2017, the unemployment rate for the District of Columbia decreased to 5.7%, while the Washington, DC Metropolitan area increased to 3.9% (ranking 8th nationally). The national unemployment rate remained flat at 4.7%.

The DC Metropolitan area gained 62,400 net new jobs from February 2016-February 2017, representing 2.0% growth. Professional & Business Services lead the private sector with 19,600 new jobs; while the Government added 7,800. The largest public sector lease executed this quarter was a renewal by the GSA for the U.S. Citizenship and Immigration Services (USCIS) for 260,992 square feet at 20 Massachusetts Avenue, NW in the Capitol Hill submarket. The law firm Akin Gump signed the largest private sector lease with a 189,268-square-foot transaction at 2001 K Street, NW – Alexander Court, in the CBD. There were seven sales transactions in DC, totaling $839,874,869. The largest sale was The Blackstone Group purchasing 815 Connecticut Avenue, NW for $189,970,000 ($878 psf).

Northern Virginia

Inventory (RSF)
182.0 Million SF
Direct Vacancy
15.8%
YTD Absorption
475,772 SF
Asking Rental Rate (FS)
$32.19 FS
Total Vacancy Rate
16.5%
Download Report
VA1Q2017MarketReport.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 first quarter was a 234,937-square-foot renewal by the Arlington County Board at Courthouse Plaza 1 – 2100 Clarendon Boulevard in the Rosslyn-Ballston Corridor submarket.

The largest lease signed by the GSA was a 96,000-square-foot renewal/expansion for the FBI at Commonwealth Centre Phase I Bldg II – 14360 Newbrook Drive in the Route 28 Corridor South submarket. Building sales volume totaled approximately $836.8 million during the first quarter. The largest transaction was the sale of the James K. Polk & Zachary Taylor Buildings in the Crystal City submarket. Beacon Capital Partners and GIC Real Estate acquired the two buildings from Beacon Capital Partners for $379.5 million ($416 psf). The properties were fully occupied at the time of sale, and traded at a 6.58% Cap Rate. The second largest sale was Tysons Metro Center I-IV – 8251, 8255, 8281 & 8285 Greensboro Drive trading from Beacon Capital Partners to Meridian Group for $227,000,000 ($297 psf). The buildings were 91.0% occupied at the time of sale, and traded at a 6.00% Cap Rate. Inside the Beltway, there were 55 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2017, compared to 60 from the fourth quarter 2016. Outside the Beltway, there were 80 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2017, compared to 85 from the fourth quarter 2016.

Suburban Maryland

Inventory (RSF)
86.6 Million SF
Direct Vacancy
14.6%
YTD Absorption
749,605 SF
Asking Rental Rate (FS)
$26.49 FS
Total Vacancy Rate
15.2%
Download Report
MD1Q2017MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 86.6 million square feet of rentable space in 889 office buildings of 25,000 square feet and greater. The market recorded a significant increase in net absorption in the first quarter with 749,605 square feet absorbed, up from the 268,085 square feet absorbed in the previous quarter. Direct vacancy decreased to 14.6%, down from 16.4% and total vacancy decreased to 15.2% from 17.0%. There was one sales transaction in Suburban Maryland this quarter. 4041 Powder Mill Road in the Beltsville/Calverton submarket sold to Reid Temple African Methodist Episcopal Church from Srinivasa Chavali for $7.2 million. The largest public sector lease executed this quarter was by GSA-FDA for 106,197 square feet at 11785 Beltsville Drive in the Beltsville/Calverton submarket. The largest private sector lease was a renewal signed by HMSHost for 119,619 square feet at 6705 Rockledge Drive in the North Bethesda submarket. The year-over-year unemployment rate in Suburban Maryland decreased to 3.5% in February 2017, down from 3.7% in February 2016. From February 2016 to February 2017 employment in Suburban Maryland had a net increase of 14,756 new jobs, representing 2.26% growth. Sectors with the greatest amount of job growth were Professional & Business Services with 4,300 jobs, Educational & Health Services with 3,300 jobs and the Government with 3,400.