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)
146.1 Million SF
Direct Vacancy
10.1%
YTD Absorption
315,240 SF
Asking Rental Rate (FS)
$52.32 FS
Total Vacancy Rate
10.9%
Download Report
DC2Q2018MarketReport.pdf

The Washington, DC office market currently consists of 786 buildings, over 25,000 square feet, totaling approximately 146.1 million square feet of rentable space. As of May 2018, the unemployment rate for the District of Columbia decreased to 5.6%, while the Washington, DC Metropolitan area decreased to 3.2%. The national unemployment rate decreased to 4.0%.

The DC Metropolitan area gained 41,300 net new jobs from May 2017-May 2018, representing 1.3% growth YOY. Professional & Business Services lead the private sector with 15,800 new jobs; while the Government lost 3,800. The largest public sector lease executed this quarter was an extension by the GSA – U.S. Secret Service for 78,722 square feet at 1100 L Street, NW in the East End submarket. The Carlyle Group signed the largest private sector lease with a 200,000-square-foot renewal / expansion at 1001 Pennsylvania Avenue, NW in the CBD submarket. There were six sale transactions in DC, totaling $434,299,510. The largest sale was 875 15th Street, NW – The Bowen Building trading to JP Morgan Chase for $140,000,000 ($598 psf).

Northern Virginia

Inventory (RSF)
186.6 Million SF
Direct Vacancy
14.9%
YTD Absorption
125,261 SF
Asking Rental Rate (FS)
$33.18 FS
Total Vacancy Rate
15.8%
Download Report
VA2Q2018MarketReport.pdf

The Northern Virginia office market consists of 1,531 buildings over 25,000 square feet, totaling approximately 186.6 million square feet of rentable space. The largest non-GSA lease signed during the second quarter was a 204,547-square-foot relet by Appian at Valo Park – 7950 Jones Branch Drive in the Tysons Corner submarket. The largest lease signed by the GSA was a 13,558-square-foot relet for the United States Geospatial Intelligence Foundation at Bldg 7 -13665 Dulles Technology Drive.

Building sales volume totaled $746,300,000 during the second quarter. The largest transaction was the sale of Boro Station I-III – 1765, 1775, and 1785 Greensboro Station Place. MetLife acquired the buildings from Meridian Group for $244 million ($380 psf). The building was 95.0% occupied at the time of sale, and traded at a 4.75% Cap Rate. The second largest sale was of Greensboro Park – 8180 and 8200 Greensboro Drive. Altus Group/Velocis acquired the buildings from Beacon Capital Partners for $142 million ($281 psf). The buildings were 83.0% occupied at the time of sale, and traded at a 5.60% Cap Rate. The third largest sale was of Commonwealth Centre – 14360 and 14370 Newbrook Drive in the Route 28 South submarket. Hines acquired the buildings from Equus for $97,750,000 ($306 psf). The buildings were fully occupied at the time of sale, and traded at a 6.50% Cap Rate. Inside the Beltway, there were 48 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2018, compared to 49 from the first quarter 2018. Outside the Beltway, there were 81 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2018, compared to 76 from the first quarter 2018.

Suburban Maryland

Inventory (RSF)
87.8 Million SF
Direct Vacancy
13.7%
YTD Absorption
298,428 SF
Asking Rental Rate (FS)
$27.18 FS
Total Vacancy Rate
14.2%
Download Report
MD2Q2018MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 87.8 million square feet of rentable space in 885 office buildings of 25,000 square feet and greater. The market recorded a decrease in net absorption in the second quarter of 2018 with 51,220 square feet absorbed, down from the 247,208 square feet absorbed in the previous quarter. Direct vacancy decreased to 13.7%, down from 14.1% and total vacancy decreased to 14.2% from 14.7%.

There was one sale transaction in Suburban Maryland this quarter. 15001 and 15005 Shady Grove Road, in the North Rockville submarket, sold to Capital Digestive Care, LLC for $15.6 million and $15.7 million, respectively. Both properties were a part of a portfolio sale, totaling $31.3 million ($301/ SF). The largest public sector lease was the US Public Health Service renewing 86,645 square feet at 1101 Wootton Parkway. The largest private sector lease was a 146,142 square-foot renewal and expansion signed by the Henry M. Jackson Foundation at 6720-A Rockledge Drive in the North Bethesda submarket. The year-over-year unemployment rate in Suburban Maryland increased to 3.1% in April 2018, up from 3.0% in April 2017. From April 2017 to April 2018 employment in Suburban Maryland had a net increase of 5,400 new jobs, representing 0.9% growth. Sectors with the greatest amount of job growth were the Education and Health Services with 2,800 jobs, Mining, Logging, and Construction with 2,100 and Trade, Transportation, and Utilities with 800 jobs. The Government decreased by 400 jobs.