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)
147.2 Million SF
Direct Vacancy
10.6%
YTD Absorption
706,940 SF
Asking Rental Rate (FS)
$53.90 FS
Total Vacancy Rate
11.5%
Download Report
DC2Q2019MarketReport.pdf

The Washington, DC office market currently consists of 790 buildings, over 25,000 square feet, totaling approximately 147.2 million square feet of rentable space.

As of May 2019, the unemployment rate for the District of Columbia increased to 5.7%, while the Washington, DC Metropolitan area decreased to 3.1%. The national unemployment rate decreased to 3.6%.

The DC Metropolitan area gained 25,000 net new jobs from May 2018-May 2019, representing 0.8% growth YOY. Leisure & Hospitality lead the private sector with 12,200 new jobs; while the Government gained 1,400.

The largest public sector lease executed this quarter was a renewal by the Securities and Exchange Commission (SEC) for 1,275,363 square feet at Station Place I, II, & III in the NoMa submarket.

King & Spalding signed the largest private sector lease with a 146,994-square-foot renewal at 1700 & 1730 Pennsylvania Avenue, NW in the CBD submarket.

There were six sale transactions in DC, totaling $370,502,551 in sales volume. The largest sale was 1701 Rhode Island Avenue, NW trading to Exan Capital for $105,652,551 ($1,037 psf).

Northern Virginia

Inventory (RSF)
188.8 Million SF
Direct Vacancy
13.5%
YTD Absorption
1,150,776 SF
Asking Rental Rate (FS)
$33.11 FS
Total Vacancy Rate
14.1%
Download Report
VA2Q2019MarketReport.pdf

The Northern Virginia office market consists of 1,536 buildings over 25,000 square feet, totaling approximately 188.8 million square feet of rentable space.

The largest non-GSA lease signed during the second quarter was a 268,240-square-foot relet by Amazon Web Services at South Lake At Dulles Corner – 13820 Sunrise Valley Drive. The largest lease signed by the GSA was a 77,454-square-foot renewal for the GSA-Customs and Border Protection at Crystal Mall Office 4 – 1901 S. Bell Street.

Building sales volume totaled over $510,320,000 during the second quarter. The largest transaction was the sale of Presidential Tower – 2550 S. Clark Street in the Crystal City submarket. Starwood/ Vanderbilt acquired the building from Beacon Capital Partners for $123,230,000 ($353 psf). The building was 95.2% occupied at the time of sale. The second largest sale was of the Fair Lakes Portfolio – 12450, 12500, 12600 & 12700 Fair Lakes Circle in the Fairfax submarket. Radix acquired the buildings from C-III for $78,500,000 ($168 psf). The buildings were 88.0% occupied at the time of sale and traded at a 10.00% Cap Rate. The third largest sale was of Parkridge V – 10780-17090 Parkridge Boulevard in the Reston-Herndon submarket. Sunwater Capital acquired the building from Atlantic Realty Companies for $56,250,000 ($278 psf). The building was 95.9% occupied at the time of sale and traded at a 6.25% Cap Rate.

Inside the Beltway, there were 40 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2019, compared to 42 from the first quarter 2019. Outside the Beltway, there were 82 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2019, compared to 78 from the first quarter 2019.

Suburban Maryland

Inventory (RSF)
88.6 Million SF
Direct Vacancy
13.2%
YTD Absorption
-113,475 SF
Asking Rental Rate (FS)
$27.93 FS
Total Vacancy Rate
13.8%
Download Report
MD2Q2019MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 88.6 million square feet of rentable space in 885 office buildings of 25,000 square feet and greater.

The market recorded an increase in net absorption in the second quarter of 2019 with 132,717 square feet absorbed, up from the -246,062 square feet absorbed in the previous quarter.

Direct vacancy slightly decreased to 13.2% in the second quarter 2019, down from 13.3% and total vacancy decreased to 13.8%, down from 13.9%.

There were three sales transactions in Suburban Maryland this quarter, totaling $68,950,000 The largest sale of the quarter was 7735 Old Georgetown Road in the Bethesda submarket. 7735 Old Georgetown Road sold to Washington Capital for $45,400,000. The price-per-square foot was $360. The Stuart Bainum Family Foundation was the seller.

The largest lease signed this quarter was Children’s National Health System signing a 110,400-square foot lease at 1 Discovery Place in the Silver Spring submarket. The year-over-year unemployment rate in Suburban Maryland decreased to 3.0% in May 2019, down from 3.2% in May 2018.

From May 2018 to May 2019 employment in Suburban Maryland had a net increase of 1,100 new jobs, representing marginal growth. Sectors with the greatest amount of job growth were Professional and Business Services with 3,900 jobs and Manufacturing with 500 jobs, The Government decreased by 700 jobs year-over-year.