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)
150.9 Million SF
Direct Vacancy
YTD Absorption
30,454 SF
Asking Rental Rate (FS)
Total Vacancy Rate
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The Washington, DC office market currently consists of 797 buildings, over 25,000 square feet, totaling approximately 150.9 million square feet of rentable space.

As of February 2020, the unemployment rate for the District of Columbia decreased to 5.2%, while the Washington, DC Metropolitan area increased to 3.0%. The national unemployment rate increased to 4.4%.

The DC Metropolitan Statistical Area (MSA) gained 55,600 net new jobs from February 2019-February 2020, representing 1.7% growth YOY. Professional & Business Services lead the private sector with 20,000 new jobs; while the Government gained 8,600.

The largest public sector lease executed this quarter was by the GSA – Department of Labor renewing 30,951 square feet at 800 K Street, NW.

State Services Organization (SSO) signed the largest private sector lease with a 237,062-squarefoot renewal at 400-444 N. Capitol Street, NW – The Hall of States.

There were three sale transactions in DC, totaling $970,469,413 in sales volume. The largest sale was 1200 New Jersey Avenue, SE (in Capitol Riverfront) to the GSA for $760.0 M ($517 psf).

Northern Virginia

Inventory (RSF)
187.4 Million SF
Direct Vacancy
YTD Absorption
-712,680 SF
Asking Rental Rate (FS)
$33.04 FS
Total Vacancy Rate
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The Northern Virginia office market consists of 1,529 buildings over 25,000 square feet, totaling approximately 187.4 million square feet of rentable space.

The largest non-GSA lease signed during the fourth quarter was a 125,556-square-foot renewal by Booz Allen Hamilton at 575 Herndon Parkway.

The largest lease signed by the GSA was a 44,989-square-foot renewal by the Department of Defense at Potomac Gateway North – 2800 Crystal Drive.

Building sales volume totaled $697,271,738 during the first quarter. The largest transaction was the sale of Dominion Tech Park – Buildings 1 & 2 – 399 & 499 Grove Street in the Reston-Herndon submarket. USAA acquired the buildings from Boston Properties for $256,000,000 ($519.69 psf). The portfolio was 100.0% occupied at the time of sale. The second largest sale was Fairview Park – 2941 Fairview Park Drive in the Merrifield submarket. Menlo Equities acquired the building from Fairfax Park LLC for $97,590,405 ($265.66 psf). The building was 91.6% occupied at the time of sale. The third largest sale was One Fair Oaks – 4114 Legato Road in the Fairfax Center submarket. Tritower Financial Group acquired the building from Beacon Capital Partners for $58,000,00 ($264.17 psf). The building was 89.9% 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 first quarter 2020 compared to 40 from the fourth quarter 2019. Outside the Beltway, there were 75 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2020, compared to 76 from the fourth quarter 2019.

Suburban Maryland

Inventory (RSF)
89.3 Million SF
Direct Vacancy
YTD Absorption
-156,873 SF
Asking Rental Rate (FS)
$27.95 FS
Total Vacancy Rate
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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 first quarter of 2020 with -156,873 square feet absorbed, down from the 61,333 square feet absorbed in the previous quarter.

Direct vacancy remained flat at 13.1% in the first quarter 2020, and total vacancy increased slightly to 13.9%.

There were six sales transactions in Suburban Maryland this quarter, totaling $340,050,000. The largest sale of the quarter was 5454 Wisconsin Avenue in the Bethesda / Chevy Chase submarket. The building sold to Starwood Real Estate Income Trust from Carr Properties for $160,000,000 ($544 psf).

The largest lease signed this quarter was BAE Systems signing a 49,080-square-foot lease at 520 Gaither Road. The year-over-year unemployment rate in Suburban Maryland decreased to 3.0% in February 2020, down from 3.5% in February 2019.

From February 2019 to February 2020 employment in Suburban Maryland had a net increase of 19,388 new jobs, representing 0.3% job growth. Sectors with the greatest amount of job growth were Professional and Business Services with 1,400 jobs, Financial Services with 1,200 jobs, and Education & Health Services and Mining, Logging & Construction, which each added 700 new jobs. Government jobs increased by 600 jobs year-over-year.

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