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)
142.3 Million SF
Direct Vacancy
10.3%
YTD Absorption
435,085 SF
Asking Rental Rate (FS)
$52.39 FS
Total Vacancy Rate
11.3%
Download Report
DC3Q2017MarketReport.pdf

The Washington, DC office market consists of 775 buildings over 25,000 square feet, totaling approximately 142.3 million square feet of rentable space. As of August 2017, the unemployment rate for the District of Columbia increased to 6.4%, while the Washington, DC Metropolitan area increased to 3.7% (ranking 7th nationally). The national unemployment rate remained flat at 4.4%.

The DC Metropolitan area gained 67,600 net new jobs from August 2016-August 2017, representing 2.1% growth. Educational & Health Services lead the private sector with 19,700 new jobs; while the Government added 4,200. The largest public sector lease executed this quarter was by the DC Government for 118,720 square feet at 1015 Half Street, SE in the Capitol Riverfront submarket. Amtrak signed the largest private sector lease with a 106,360-square-foot transaction at 10 G Street, NE in the NoMa submarket. There were six sale transactions in DC, totaling $1,239,207,000. The largest sale was Oxford Properties / Norges Bank purchasing 900 16th Street, NW for $151,000,000 ($1,237 psf) from JBG Companies / ICG Properties.

Northern Virginia

Inventory (RSF)
183.3 Million SF
Direct Vacancy
15.4%
YTD Absorption
1,057,727 SF
Asking Rental Rate (FS)
$32.39 FS
Total Vacancy Rate
16.2%
Download Report
VA3Q2017MarketReport.pdf

The Northern Virginia office market consists of 1,533 buildings over 25,000 square feet, totaling approximately 183.3 million square feet of rentable space. The largest non-GSA lease signed during the third quarter was a 216,000-square-foot relet by General Dynamics at 3150 Fairview Park Drive in the Merrifield submarket. The largest lease signed by the GSA was a 279,996-square-foot renewal for the Department of State at 1701 N. Fort Myer Drive in the Rosslyn-Ballston Corridor submarket. Building sales volume totaled $425,063,240 during the third quarter. The largest transaction was the sale of Tysons International Plaza – 1919 & 1921 Gallows Road in the Tysons Corner submarket. Rockpoint Group acquired the building from Tishman Speyer for $136 million ($304 psf). The property was 84.0% occupied at the time of sale, and traded at a 6.70% Cap Rate. The second largest sale was of Albemarle Point, Dulles Business Park & Sullyfield Business Park – 14420, 14424, 14426, 14428, 14432 & 14434 Albemarle Point Place; 3680, 3684, 3750, 3855, 3859 & 3863 Centerview Drive; 14280 & 14290 Sullyfield Circle. Buchanan Partners acquired the portfolio from ARES for $81,150,000 ($117 psf). Inside the Beltway, there were 51 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the third quarter 2017, compared to 53 from the second quarter 2017. Outside the Beltway, there were 82 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the third quarter 2017, compared to 81 from the second quarter 2017.

Suburban Maryland

Inventory (RSF)
86.6 Million SF
Direct Vacancy
15.0%
YTD Absorption
391,739 SF
Asking Rental Rate (FS)
$26.68 FS
Total Vacancy Rate
15.5%
Download Report
MD3Q2017MarketReport.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 887 office buildings of 25,000 square feet and greater. The market recorded a significant increase in net absorption in the third quarter with 145,756 square feet absorbed, up from the -503,622 square feet absorbed in the previous quarter. Direct vacancy decreased to 15.0%, down from 15.1% and total vacancy decreased to 15.5% from 15.7%. There were four sale transactions in Suburban Maryland this quarter. A portfolio sale including 820 W. Diamond Avenue, 9713, 9715, and 9717 Key West Avenue in the Gaithersburg and North Rockville submarkets sold to Farallon Capital Management, LLC for $60.7 million. 9600 Blackwell Road in the North Rockville submarket sold to Royco, Inc. for $25.5 million. 77 Upper Rock Circle in the North Rockville submarket sold to DSC Partners, LLC for $19.5 million. 4630 Montgomery Avenue in the Bethesda/Chevy Chase submarket sold to Stonebridge-Carras, LLC for $15.2 million. The largest public sector lease executed this quarter was a new lease by the U.S. Citizenship and Immigration Services for 574,767 square feet at 5900 Capital Gateway Drive in the North Bethesda submarket. The largest private sector lease was a 720,000-square-foot pre-lease signed by Marriott at 7750 Wisconsin Avenue in the Bethesda/Chevy Chase submarket. The year-over-year unemployment rate in Suburban Maryland decreased to 3.1% in August 2017, down from 3.4% in August 2016. From August 2016 to August 2017 employment in Suburban Maryland had a net increase of 22,811 new jobs, representing 3.45% growth. Sectors with the greatest amount of job growth were the Government with 3,600 jobs, Mining, Logging and Construction with 3,100 and Leisure & Hospitality with 2,800 jobs.