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)
157.9 M SF
Direct Vacancy
14.2%
Total Vacancy
15.3%
YTD Net Absorption
-391,699 SF
YTD Leasing
4.3 M SF
Under Construction
1.1 M SF
Pre-Leased
67%
YTD Deliveries
969,203 SF
Asking Rental Rate (FS)
$53.23 PSF
YTD Sales
$1.32 Billion
Quarterly Report
DC2Q2022MarketReport.pdf
Mid-Quarter Report
DCMid1Q2022.pdf

The Washington, DC office market currently consists of 816 buildings, over 25,000 square feet, totaling approximately 157.9 million square feet of rentable space. As of May 2022, the unemployment rate for the District of Columbia increased to 5.7%, while unemployment for the Washington, DC Metropolitan area decreased to 3.3%. The national unemployment rate remained flat at 3.6%.

The DC Metropolitan Statistical Area (MSA) added 96,600 jobs from May 2021-May 2022, representing 3.0% growth YOY. Sectors adding the most jobs were Leisure & Hospitality with 55,300 followed by Educational & Health Services with 12,600, while the Government added 5,500. The largest public sector lease executed this quarter was signed by the GSA – Department of Justice for 331,000 square feet at 555 4th Street, NW, in the East End submarket. Google executed the largest private sector lease with a 130,000-square-foot sublease at 655 New York Avenue, NW in the East End submarket. The three buildings of The Wharf Phase II delivered this quarter. 680 Maine Avenue, SW (293,953 sf) delivered 100% leased to Williams & Connolly, 670 Maine Avenue, SW (255,750 sf) delivered 47% leased to Williams & Connolly and PhRMA, while 610 Water Street, SW (89,500 sf) delivered 100% leased to The Atlantic and Freedom Forum. There were five sales transactions this quarter, totaling $656,076,356. The largest sale was 1900 N Street, NW trading to Commerz Real AG from Canada Pension Plan Investments for $265,000,000 ($976 psf).

Northern Virginia

Inventory (RSF)
188.9 M SF
Direct Vacancy
15.7%
Total Vacancy
16.8%
YTD Net Absorption
578,000 SF
YTD Leasing
5.0 M SF
Under Construction
4.0 M SF
Pre-Leased
74%
YTD Deliveries
1.5 M SF
Asking Rental Rate (FS)
$33.96 PSF
YTD Sales
$1.26 Billion
Quarterly Report
VA2Q2022MarketReport.pdf
Mid-Quarter Report
VAMid1Q2022.pdf

The Northern Virginia office market consists of 1,509 buildings over 25,000 square feet, totaling approximately 188.9 million square feet of rentable space. Northern Virginia added 41,200 net new jobs from May 2021-May 2022, representing 2.8% growth YOY. Sectors adding the most jobs were Leisure & Hospitality with 22,800, followed by Trade & Transportation with 8,400; while the Government added 4,600. The unemployment rate in Northern Virginia ticked up from the previous quarter to 2.6%. However, NoVa still outperforms the current national unemployment rate of 3.6%. The Northern Virginia market recorded -430,916 square feet of net absorption in the second quarter. Tenants contributing to the negative net absorption included Fannie Mae vacating 404,145 square feet at 11600 American Dream Way (consolidating into their new office space at 2000 Opportunity Way) and the American Trucking Association vacating 108,041 square feet at 950 N. Glebe Road (relocated to 80 M Street, SE in DC). Northern Virginia totaled 2,996,017 square feet of leasing in the second quarter. The largest lease signed this quarter was a 5-year renewal by the GSA -Department of Defense for 558,187 square feet at 2530 Crystal Drive – Zachary Taylor Building. There were eight sales transactions in Northern Virginia this quarter, totaling $689,516,424.

Suburban Maryland

Inventory (RSF)
91.1 M SF
Direct Vacancy
13.5%
Total Vacancy
14.8%
YTD Net Absorption
-190,990 SF
YTD Leasing
2.0 M SF
Under Construction
1.4 M SF
Pre-Leased
71%
YTD Deliveries
475,000 SF
Asking Rental Rate (FS)
$30.05 PSF
YTD Sales
$37.09 Million
Quarterly Report
MD2Q2022MarketReport.pdf
Mid-Quarter Report
MDMid1Q2022.pdf

The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 91.1 million square feet of rentable space in 892 office buildings of 25,000 square feet and greater. The market recorded an increase in net absorption in the second quarter with 77,828 square feet absorbed, up from the -268,818 square feet absorbed in the previous quarter. A contributing tenant was MOM’s Organic Market occupying their 20,761-square-foot space at 6120 Executive Boulevard.

Direct vacancy decreased to 13.5% in the second quarter, down from 13.6% in the first quarter, and total vacancy decreased to 14.8%, down from 14.9% in the first quarter. The three largest office building sales in Suburban Maryland during the second quarter were Key West Life Science Center in the North Rockville submarket sold in June 2022 for $148 M, 7200 Wisconsin Avenue in the Bethesda / Chevy Chase submarket sold in April 2022 for $120 M, and Rockville Corporate Center in the North Rockville submarket sold in April 2022 for $66 M. The largest lease signed this quarter was National Institutes of Health signing a 355,950-square-foot lease at 6701 and 6707 Democracy Boulevard. The year-over-year unemployment rate in Suburban Maryland decreased to 3.3% in May 2022, down from 5.5% in May 2021.

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