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)
145.1 Million SF
Direct Vacancy
10.3%
YTD Absorption
-59,391 SF
Asking Rental Rate (FS)
$52.80 FS
Total Vacancy Rate
11.0%
Download Report
DC4Q2018MarketReport.pdf

The Washington, DC office market currently consists of 782 buildings, over 25,000 square feet, totaling approximately 145.1 million square feet of rentable space. As of November 2018, the unemployment rate for the District of Columbia remained flat at 5.6%, while the Washington, DC Metropolitan area decreased to 3.0%. The national unemployment rate increased to 3.9%.

The DC Metropolitan area gained 54,100 net new jobs from November 2017-November 2018, representing 1.6% growth YOY. Professional & Business Services lead the private sector with 15,800 new jobs; while the Government gained 4,200. The largest public sector lease executed this quarter was a renewal by the GSA – Department of State for 189,008 square feet at 2215 Constitution Avenue, NW in the West End submarket. Williams & Connolly signed the largest private sector lease with a 292,000-square-foot pre-lease at 690 Maine Avenue, SW – The Wharf Phase II in the Southwest submarket. There were nine sale transactions in DC, totaling $1,609,225,000. The largest sale was 1111 Pennsylvania Avenue, NW trading to PRP / GMF Global for $338,000,000 ($1,002 psf).

Northern Virginia

Inventory (RSF)
188.3 Million SF
Direct Vacancy
14.3%
YTD Absorption
1,389,691 SF
Asking Rental Rate (FS)
$33.00 FS
Total Vacancy Rate
15.0%
Download Report
VA4Q2018MarketReport.pdf

The Northern Virginia office market consists of 1,534 buildings over 25,000 square feet, totaling approximately 188.3 million square feet of rentable space. The largest non-GSA lease signed during the fourth quarter was a 379,000-square-foot renewal by Fannie Mae at Fannie Mae Complex – 11600 American Dream Way. The largest lease signed by the GSA was a 190,546-square-foot renewal for the Patent & Trademark Office at Randolph Square – 2800 S. Randolph Street.

Building sales volume totaled $763,384,101 during the fourth quarter. The largest transaction was the partial interest transfer of the Rockpoint/ Brandywine Portfolio in the Reston-Herndon submarket. Brandywine Realty Trust formed a joint venture with Rockpoint Group who purchased 85% interest in the portfolio while Brandywine retained 15% interest. The buildings were 85.7% occupied at the time of sale. The second largest sale was of 1550 & 1560 Wilson Boulevard in the Rosslyn-Ballston Corridor submarket. Empire Leasing, Inc. acquired the building from Brookfield Office Properties, Inc. for $102,500,000 ($364 psf). The buildings were 76.0% occupied at the time of sale and traded at a 6.10% Cap Rate. The third largest sale was of Building C-2- 22001 Loudoun County Parkway. Boyd Watterson acquired the building from American Real Estate Partners for $65,500,000 ($143 psf). The building was fully occupied at the time of sale. Inside the Beltway, there were 44 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter 2018, compared to 46 from the third quarter 2018. Outside the Beltway, there were 76 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter 2018, compared to 78 from the third quarter 2018.

Suburban Maryland

Inventory (RSF)
88.1 Million SF
Direct Vacancy
13.1%
YTD Absorption
568,496 SF
Asking Rental Rate (FS)
$27.10 FS
Total Vacancy Rate
13.8%
Download Report
MD4Q2018MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 88.1 million square feet of rentable space in 884 office buildings of 25,000 square feet and greater. The market recorded an increase in net absorption in the fourth quarter of 2018 with 420,821 square feet absorbed, up from the -150,753 square feet absorbed in the previous quarter. Direct vacancy decreased to 13.1% in the fourth quarter 2018, down from 13.5% and total vacancy decreased to 13.8%, down from 14.2%.

There were four sales transactions in Suburban Maryland this quarter, totaling $225,500,000. The largest sale of the quarter was Station Square, in the Silver Spring submarket. Station Square comprises of 1010 Wayne Avenue, 1100 Wayne Avenue, and 8484 Georgia Avenue. The portfolio sold to Bridge Investment Group out of Utah for $107,000,000. The price-per-square-foot was $209.72. The largest lease signed this quarter was RegenXBio signing a 132,487-square-foot prelease at 9800 Medical Center Drive – Building F in the North Rockville submarket. The year-over-year unemployment rate in Suburban Maryland decreased to 3.0% in November 2018, down from 3.5% in November 2017. From November 2017 to November 2018 employment in Suburban Maryland had a net increase of 32,849 new jobs, representing 1.0% growth. Sectors with the greatest amount of job growth were Professional & Business Services with 15,800 jobs, Mining, Logging & Construction with 9,300 and Leisure and Hospitality with 8,800 jobs. The Government increased by 4,200 jobs yearover- year.