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)
145.6 Million SF
Direct Vacancy
11.0%
YTD Absorption
-296,704 SF
Asking Rental Rate (FS)
$53.51 FS
Total Vacancy Rate
11.7%
Download Report
DC1Q2019MarketReport.pdf

The Washington, DC office market currently consists of 787 buildings, over 25,000 square feet, totaling approximately 145.6 million square feet of rentable space. As of February 2019, the unemployment rate for the District of Columbia decreased to 5.5%, while the Washington, DC Metropolitan area increased to 3.5%. The national unemployment rate decreased to 3.8%.

The DC Metropolitan area gained 20,700 net new jobs from February 2018-February 2019, representing 0.6% growth YOY. Leisure & Hospitality lead the private sector with 13,900 new jobs; while the Government gained 2,400. The largest public sector lease executed this quarter was a renewal by the GSA – Equal Employment Opportunity Commission (EEOC) for 161,000 square feet at 131 M Street, NE – One NoMa Station in the NoMa submarket. Chemonics signed the largest private sector lease with a 290,000-square-foot pre-lease at 1275 New Jersey Avenue, SE – The Yards in the Capitol Riverfront submarket. There were ten sale transactions in DC, totaling $820,890,276. The largest sale was 2175 K Street, NW trading to the Delegation of the European Union to the U.S. for $102,990,276 ($755 psf).

Northern Virginia

Inventory (RSF)
187.0 Million SF
Direct Vacancy
14.3%
YTD Absorption
472,834 SF
Asking Rental Rate (FS)
$33.02 FS
Total Vacancy Rate
14.9%
Download Report
VA1Q2019MarketReport.pdf

The Northern Virginia office market consists of 1,535 buildings over 25,000 square feet, totaling approximately 187.0 million square feet of rentable space. The largest non-GSA lease signed during the first quarter was a 724,820-square-foot pre-lease by Fannie Mae at Reston Gateway – Sunset Hills Road at Town Center Boulevard. The largest lease signed by the GSA was a 73,000-square-foot relet for the GSA-DEA at Crystal Plaza 4 – 2200 Crystal Drive.

Building sales volume totaled over $271 million during the first quarter. The largest transaction was the sale of Commerce Metro Center III-V – 1850 Centennial Park Drive, 11400 and 11440 Commerce Park Drive in the Reston-Herndon submarket. Comstock acquired the buildings from JBG Smith for $115 million ($282 psf). The buildings were 87.0% occupied at the time of sale. The second largest sale was of 2000 Duke Street in the Old Town & Eisenhower Ave submarket. The Shidler Group acquired the building from J.P. Morgan for $75 million ($482 psf). The building was 98.1% occupied at the time of sale and traded at a 5.50% Cap Rate. The third largest sale was of 6400 & 6402 Arlington Boulevard in the Falls Church submarket. BoundTrain/Harbert acquired the buildings from AIG for $38,119,000 ($93 psf). The buildings were 73.0% occupied at the time of sale and traded at a 10% Cap Rate. Inside the Beltway, there were 42 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2019, compared to 44 from the fourth quarter 2018. Outside the Beltway, there were 78 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2019, compared to 76 from the fourth quarter 2018.

Suburban Maryland

Inventory (RSF)
88.3 Million SF
Direct Vacancy
13.3%
YTD Absorption
-246,062 SF
Asking Rental Rate (FS)
$27.65 FS
Total Vacancy Rate
13.9%
Download Report
MD1Q2019MarketReport.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 88.3 million square feet of rentable space in 885 office buildings of 25,000 square feet and greater. The market recorded an decrease in net absorption in the first quarter of 2019 with -246,062 square feet absorbed, down from the 420,821 square feet absorbed in the previous quarter. Direct vacancy increased to 13.3% in the first quarter 2019, up from 13.1% and total vacancy increased to 13.9%, up from 13.8%.

There were sixteen sales transactions in Suburban Maryland this quarter, totaling $221,272,128. The largest sale of the quarter was 4600 River Road in the College Park submarket. 4600 River Road sold to Easterly Government Properties for $37,000,000. The price-per-square-foot was $458.62. Saban Capital Group was the seller. The largest lease signed this quarter was Supernus Pharmaceuticals signing a 136,016-square-foot lease at 9715 & 9717 Key West Avenue in the North Rockville submarket. The year-over-year unemployment rate in Suburban Maryland from January 2018 to January 2019 remained flat at 3.7%. From January 2018 to January 2019 employment in Suburban Maryland had a net increase of 31,600 new jobs, representing 1.0% growth. Sectors with the greatest amount of job growth were Professional and Business Services with 15,600 jobs and Leisure and Hospitality with 12,000 jobs. The Government increased by 900 jobs year-over-year.