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)
152.2 Million SF
Direct Vacancy
12.4%
YTD Absorption
-1,332,378 SF
Asking Rental Rate (FS)
$53.24 FS
Total Vacancy Rate
13.6%
Download Report
DC4Q2020MarketReport.pdf

The Washington, DC office market currently consists of 798 buildings, over 25,000 square feet, totaling approximately 152.2 million square feet of rentable space. Since spiking at 9.8% in April due to COVID-19, regional unemployment has been on a steady decline. As of November 2020, the unemployment rate for the District of Columbia improved to 7.5% and the Washington, DC Metropolitan area improved to 5.8%. The national unemployment rate decreased to 6.7%.

The DC Metropolitan Statistical Area (MSA) lost 179,700 jobs from Nov 2019-Nov 2020, representing a contraction of 5.3% YOY. Even though employment is down YOY, employment has been rebounding steadily with the metro area adding 180,700 net new jobs May-November.

The largest public sector lease executed this quarter was a short-term extension by the GSA – Small Business Administration for 266,193 square feet at 409 3rd Street, SW – Washington Office Center. Skadden signed the largest private sector lease with a 263,693-square-foot “blend & extend” at 1440 New York Avenue/700 14th Street, NW. Eight buildings sold, totaling $559,381,073.

Northern Virginia

Inventory (RSF)
188.0 Million SF
Direct Vacancy
14.7%
YTD Absorption
-1,791,812 SF
Asking Rental Rate (FS)
$33.09 FS
Total Vacancy Rate
15.6%
Download Report
VA4Q2020MarketReport.pdf

The Northern Virginia office market consists of 1,527 buildings over 25,000 square feet, totaling approximately 188.0 million square feet of rentable space.

The largest private sector lease signed during the fourth quarter was a 196,000-square-foot new lease by Volkswagen at Reston Gateway B – 12034 Sunset Hills Road. The largest lease signed by the GSA and the third largest of the quarter in Northern Virginia was a 70,000-square-foot relet by the GSA-Department of Defense at One Jefferson Park – 8111 Gatehouse Road. Building sales volume totaled $381,000,000 during the fourth quarter 2020. The largest transaction was the sale of Fairview Park – 3150 Fairview Park Drive in the Merrifield submarket.

The Northern Virginia region lost 67,400 jobs from October 2019 – October 2020, representing 4.3% decline YOY. The pandemic has had an impact on multiple sectors. The mining, logging, and construction sector had the most significant increase with 2,700 new jobs, while the Leisure and Hospitality sector lost 33,400 jobs. As of October 2020, the unemployment rate for Northern Virginia increased from the previous year to 4.7%. The national unemployment rate increased to 6.9% YOY.

Inside the Beltway, there were 51 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter compared to 48 at the end of third quarter 2020.

Outside the Beltway, there were 79 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter 2020 compared to 78 from the third quarter 2020.

Suburban Maryland

Inventory (RSF)
89.1 Million SF
Direct Vacancy
14.2%
YTD Absorption
-603,530 SF
Asking Rental Rate (FS)
$27.93 FS
Total Vacancy Rate
15.3%
Download Report
MD4Q2020MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 89.1 million square feet of rentable space in 894 office buildings of 25,000 square feet and greater.

The market recorded a slight increase in net absorption in the fourth quarter of 2020 with -238,763 square feet absorbed, up from the -243,746 square feet absorbed in the previous quarter. Direct vacancy increased to 14.2% in the fourth quarter, up from 14.0% in the third quarter 2020, and total vacancy increased to 15.3%, up from 15.0% in the third quarter.

There were four significant office building sales in Suburban Maryland during the fourth quarter 2020. 4321 Hartwick Road in the Greenbelt/ College Park submarket sold in October 2020. Selling in December were 700 Quince Orchard Road in the Gaithersburg/Germantown submarket, 1700 Rockville Pike in the Rockville submarket, and 14400 Sweitzer Lane in the Landover/Largo/ Capitol Heights submarket. The largest lease signed this quarter was Novavax signing a 123,000-square-foot lease at 700 Quince Orchard Road in the Gaithersburg/ Germantown submarket.

The year-over-year unemployment rate in Suburban Maryland increased to 6.3% in November 2020, up significantly from 2.6% in November 2019. Unemployment in Suburban Maryland remained below the national unemployment rate of 6.7% in November 2020. From November 2019 to November 2020 employment in Suburban Maryland saw a net decrease of 45,143 jobs. Sectors with the greatest amount of job loss were Education and Health Services with 4,900 jobs lost, Trade, Transportation and Utilities with 3,900 jobs lost, and Leisure and Hospitality with 3,600 jobs lost. Government jobs remained steady in the period from November 2019 to November 2020.

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