Washington, DC
Q3 brought little change to market sentiment in the District. The removal of one large block of lingering space did bring availability down some on a quarter-to-quarter basis, however it still remains elevated when compared to Q3 2017 due to robust construction activity and continued tenant rightsizing. Overall availability ended the third quarter at 15.6%, a 60-basis-point decrease from Q2, yet notably still higher than where it was at Q3 2017 (14.9%).
Northern Virginia
Fundamentals in Northern Virginia are holding relatively flat with overall availability at 20.8%, a mere 20-basis-point decrease year-over-year. With few large leases seen, the pace of activity slowed in Q3 and quarterly volume, 1.9 million square feet (msf), hit its lowest point in two years. Rents held flat from last quarter and are currently averaging $32.55/ sf for all classes.
Suburban Maryland
With Discovery Communications’ imminent departure in Silver Spring, availability shot up to 18.4%, marking a 200-basis-point increase yearover-year. Still, demand is strong and leasing held pace with more than 1.0 msf of activity seen in Q3, bringing the year-to-date total to 2.9 msf. Bethesda remains at the center of activity as it continues to lure tenants to its pipeline of new developments.
“The third quarter saw a number of significant moves from tenants across all industries, with many securing terms now for leases that won’t begin for several years. Occupiers throughout the region recognize, and are benefitting from, favorable conditions that have categorized the market for some time now and into the foreseeable future.”
Tom Fulcher, Executive Vice President