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.