Washington, DC
Mid-year brings little change to DC’s tenant-favorable market conditions. Overall availability dropped just 0.3 percentage points (pp) from Q1 to end Q2 at 16.2%, and remains among the highest levels on record. Leasing activity totals nearly 4.4 million square feet (msf) year-to-date, as tenants are eager to capitalize on the softer market conditions. With significant development activity, the current overall average asking rent increased by 1.4% to $52.16 per square foot (psf). However, there is no sign of a pullback in the record-high concessions that prevail.
Northern Virginia
Northern Virginia continues on its very slow road to recovery, with available space shrinking slightly again this quarter. Overall availability currently stands at 20.5%, a 0.3pp decline over both the quarter and the year. Year-to-date leasing now totals over 5.0 msf, a 24.7% increase year-over-year. New options have pushed asking rents up some, yet concessions for top-tier product are currently averaging over $115.00 psf in free rent and improvement allowances.
Suburban Maryland
New developments and walkable, amenity-rich submarkets in Suburban Maryland have been very successful at luring tenants, though often to the detriment of more suburban locations. As a whole, overall availability fluctuated upwards, increasing 0.4 pp from Q1 to 16.9%. Leasing activity is keeping pace, totaling over 1.8 msf so far this year – however much of the activity seen this quarter was through renewals.
“Mid-year brings little change to the unprecedented favorability and flexibility seen in office market conditions across the Washington metro region. Tenants are taking note, and the region is benefitting from an uptick in activity from key growth sectors including tech and coworking groups. Organizations in the market now will benefit from prime conditions and favorable terms in both new and existing options.”
Tom Fulcher, Executive Vice President