WASHINGTON, DC—The Washington DC office area market reached an important benchmark in Q2: Northern Virginia, Suburban Maryland and the District of Columbia each recorded positive leasing growth -- the first time that has happened in over a year and a half, according to JLL's Office Insight Report for Q2 2015. In general, leasing year-to-date is up 16% compared to the same period last year.

In Northern Virginia the turnaround is perhaps the most startling, according to a separate analysis by CBRE of the same time period. The market saw positive net absorption of 631,000 square feet, according to Revathi Greenwood, CBRE's Director of Research in the Washington - Baltimore markets. "The fact that it has turned positive after so many months is very significant," she tells GlobeSt.com. Just as interesting was the reason: the ongoing flight to quality -- whose definition now includes proximity to transit.

In the Tyson's Corner submarket, for example, buildings within a quarter of a mile around the new Silver Line Metro stations are seeing 58% of the leasing activity -- up from 18% before the extension was delivered, according to Greenwood.

So. Now can we finally say the market equilibrium has shifted or at least is shifting back in favor to landlords?

The answer is sort of -- but much depends on whether plain vanilla Class A buildings can start to make traction. Unfortunately for investors and property owners, there are analysts that believe that will be unlikely.

First, though, a look at the total landscape shows the situation is still sobering for investors and owners that are hoping for more overall leverage in rental rates.

Maryland's positive absorbency, for example, is still low and overall the state's DC suburbs are still treading water, Greenwood says.

"There is demand for certain class A product in some Montgomery County submarkets like Chevy Chase, but that demand is counteracted by trends in Price George's County," she says.

Also, a look at which type of firms are driving growth is also important, she adds. Companies that are inking leases are smaller and in industries that require smaller real estate footprints such as non-profits and technology and new media.

The market is becoming more landlord-friendly, JLL Vice President Tucker Farman tells GlobeSt.com. But is it a landlord's market? "No."

As in every cycle, there is competition for space in certain buildings, he adds. But even in these properties, tenants are holding out for the best. For example in a well-located building, Farman says, " we still might see less desirable space that has 18 months of rental abatement."

One positive sign for landlords is that some amenities taken for granted in the post-recession years are starting to scale back. Free rent, for instance, can be usually the first to go and in some deals it is no longer an option, Farman says.

Another sign: in certain submarkets there has been an uptick in taking rates as well as deal increase, JLL Research Director Scott Homa tells GlobeSt.com.

"We have seen within the trophy segment year to date a record amount of deals above $50 per square foot triple net," he says.

"Those have been mainly by government affairs groups that aren't very price sensitive."

That is the top end of the barbell, he continues. Unfortunately the bottom end of the barbell is not making similar progress. "There is a still a hole in the donut -- the plain vanilla Class A assets that don't offer good value relative to Class B and Class C assets, but are a step below trophy quality. "

"For this to be a landlord's market, there needs to be tightening a both the top and bottom ends of the barbell," Homa says.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.