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)
149.4 Million SF
Direct Vacancy
11.3%
YTD Absorption
491,028 SF
Asking Rental Rate (FS)
$52.76 FS
Total Vacancy Rate
11.5%
Download Report
DC4Q2019MarketReport.pdf

The Washington, DC office market currently consists of 794 buildings, over 25,000 square feet, totaling approximately 149.4 million square feet of rentable space.

As of November 2019, the unemployment rate for the District of Columbia decreased to 5.3%, while the Washington, DC Metropolitan area decreased to 2.8%. The national unemployment rate remained flat at 3.5%.

The DC Metropolitan Statistical Area (MSA) gained 61,100 net new jobs from November 2018-November 2019, representing 1.8% growth YOY. Professional & Business Services lead the private sector with 24,800 new jobs; while the Government gained 3,600.

The largest public sector lease executed this quarter was by the GSA – Department of Justice (DOJ) for 308,989 square feet at 601 D Street, NW in the East End submarket.

PricewaterhouseCoopers signed the largest private sector lease with a 148,452-square-foot signing at 655 New York Avenue, NW in the East End submarket.

There were four sale transactions in DC, totaling $688,500,000 in sales volume. The largest sale was 901 15th Street, NW trading to Northwestern Mutual from ADIA for $209,100,000 ($817 psf).

Northern Virginia

Inventory (RSF)
186.7 Million SF
Direct Vacancy
13.0%
YTD Absorption
2,522,677 SF
Asking Rental Rate (FS)
$32.81 FS
Total Vacancy Rate
13.6%
Download Report
VA4Q2019MarketReport.pdf

The Northern Virginia office market consists of 1,524 buildings over 25,000 square feet, totaling approximately 186.7 million square feet of rentable space.

The largest non-GSA lease signed during the fourth quarter was a 207,000-square-foot new lease by ICF at Reston Station – Phase III – 1902 Reston Metro Plaza.

The largest lease signed by the GSA was a 60,421-square-foot renewal at Herndon Square II – 535 Huntmar Park Drive.

Building sales volume totaled $745,250,000 during the fourth quarter. The largest transaction was the sale of the Skyline Office Portfolio – 5107-5275 Leesburg Pike in the Falls Church submarket. Somera Road acquired the portfolio from CW Capital for $210,700,000 ($78.00 psf). The portfolio was 49.2% occupied at the time of sale. The second largest sale was 1525 Wilson Boulevard in the Rosslyn-Ballston Corridor submarket. The Meridian Group acquired the building from The Blackstone Group for $113,150,000 ($355.27 psf). The building was 78.4% occupied at the time of sale.

Inside the Beltway, there were 40 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter 2019, compared to 37 from the third quarter 2019. 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 2019, compared to 75 from the third quarter 2019.

Suburban Maryland

Inventory (RSF)
89.3 Million SF
Direct Vacancy
13.1%
YTD Absorption
111,669 SF
Asking Rental Rate (FS)
$27.63 FS
Total Vacancy Rate
13.8%
Download Report
MD4Q2019MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 89.3 million square feet of rentable space in 896 office buildings of 25,000 square feet and greater.

The market recorded a decrease in net absorption in the fourth quarter of 2019 with 61,333 square feet absorbed, down from the 183,811 square feet absorbed in the previous quarter.

Direct vacancy stayed flat at 13.1% in the fourth quarter 2019, and total vacancy decreased slightly to 13.8%, down from 13.9% in the third quarter 2019.

There were three sales transactions in Suburban Maryland this quarter, totaling $529,156,575. The largest sale of the quarter was 5600 Fishers Lane in the Rockville submarket. 5600 Fishers Lane sold to a joint venture between Boyd Watterson and Union Baincaire Privee for $436,000,000. The price-per-square-foot was $466. The JBG Companies was the seller.

The largest lease signed this quarter was Social & Scientific Systems, Inc. signing a 57,934-square-foot lease at 8757 Georgia Avenue in the Silver Spring submarket. The year-over-year unemployment rate in Suburban Maryland decreased to 2.7% in November 2019, down from 3.0% in November 2018.

From November 2018 to November 2019 employment in Suburban Maryland had a net increase of 20,170 new jobs, representing 0.2% job growth. Sectors with the greatest amount of job growth were Professional and Business Services with 2,300 jobs, Leisure and Hospitality with 900 jobs, and Manufacturing with 300 new jobs. The Government increased by 900 jobs year-over-year.