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Washington, DC Market Reports

Washington Metropolitan Area Market

Average Asking Rent (Price/SF)        $37.87
Vacancy Rate (%)          16.3%
Net Absorption (SF)      677,304

The Washington area's office market experienced strong demand during the third quarter of 2017 compared with recent years of performance, as a net 677,304 square feet was absorbed by the region. This performance, bolstered by Northern Virginia's outsized contribution, stands in contrast to the second quarter's net absorption of negative 390,872 square feet. The region's year-to-date absorption total now stands at 1.0 million square feet, led by Northern Virginia with 634,636 square feet of net absorption. Demand for Class A space was positive across all three sub-state areas, as the region registered 483,312 square feet of Class A absorption during the quarter, bringing year-to-date Class A absorption to 2.1 million square feet. Tenant preference for new, quality space is evident.

District of Columbia Office Market

Average Asking Rent (Price/SF)      $54.92
Vacancy Rate (%)        11.4%
Net Absorption (SF)      13,784

The third quarter of 2017 marked a continuation of the tepid quarterly performance of the District of Columbia's office fundamentals. Net absorption improved modestly, ticking up to 13,784 square feet from 3,575 square feet in the second quarter. However, net absorption in 2017 is anemic when compared with the 1,211,794 square feet that was positively absorbed last year. The District's low absorption figure in the third quarter was largely the result of Black Entertainment Television's (BET's) headquarters relocation, which represented the largest move-out of the quarter. The office component of BET's four-building campus, located at 1900 West Place NE, left 83,250 square feet of space unoccupied. This pushed the Uptown submarket's vacancy rate up to 16.9%, the highest among the District submarkets. District occupancy was more than offset by several mid-sized GSA moves in NoMa, which produced 100,247 square feet of positive absorption in that submarket.

Suburban Maryland Office Market

Average Asking Rent (Price/SF)  
Vacancy Rate (%)     16.7%
Net Absorption (SF)    28,884

The two largest lease deals signed in the third quarter of 2017 in the Washington Metro region, totaling approximately 1.3 million square feet, were executed in Suburban Maryland. Although these deals will not factor into absorption until the tenants relocate, market performance improved in Suburban Maryland, with third-quarter net absorption at 28,884 square feet-an improvement over last quarter and from one year ago. Class A fundamentals were sturdy as well, with 12,808 square feet of absorption during the third quarter. The overall vacancy rate and average asking rents remained relatively steady compared to the prior quarter: 16.7% and $27.09/SF.

Northern Virginia Office Market

Average Asking Rent (Price/SF)      $32.01
Vacancy Rate (%)        19.8%
Net Absorption (SF)    634,636

The Northern Virginia office market outperformed the Washington metropolitan area through the third quarter of 2017, with steady occupancy and asking rates, robust absorption of 634,636 square feet, yet with nearly 1.4 million square feet delivered to the market. Northern Virginia's strong third-quarter absorption stands in contrast to the absorption of negative 242,923 square feet in the prior quarter, 89,415 square feet in the third quarter of 2016 and negative 372,910 square feet for all of 2016.

Washington Metropolitan Area Office Market Report
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District of Columbia Office Market Report
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Suburban Maryland Office Market Report
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Northern Virginia Office Market Reports
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Washington Metropolitan Area Multihousing Market Report
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The Silver Line Effect
September 2017
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The Evolution of the Financial Services Industry
June 2017
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Washington Metro Area MegaTrends: A 2017 Update
March 2017
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State of U.S. Office Leasing Concessions and the Outlook For 12 Major Cities
December 2016
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Scale of Disruption - The Sharing Economy's Effect On U.S. Commercial Real Estate
October 2016
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Political Control - Who Runs Washington and the Impact On Office Space Demand
July 2016
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The Impact of Office Space on Employee Productivity
February 2016
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