WASHINGTON, DC—Overall the District fared well, relatively speaking, for Q1. In a new report, DTZ says that there was some 2.8 million square feet in leasing volume in the first three months of the year, outpacing the previous four quarters' average leasing volume of 2.6 million square feet.
However, while transaction volume was strong, overall demand was essentially flat as the market registered a negative 25,000 square feet of absorption during the first quarter. The vacancy rate ticked up 0.1 percentage points from year-end 2014 to 11.3% as a result.
What was particularly notable, though, was the clear divergence in demand for space in the East End compared to the CBD for the quarter, DTZ also said in its report.
The CBD registered a strong 219,500 square feet for the quarter as the East End registered a negative 296,000 square feet. This pattern could be attributed to the quirks of particular deals closing during this time period, of course. The CBD saw several large transactions including Uber's 72,900 square foot lease at 1717 Rhode Island Ave., which, along with a 11,4000-square foot lease signed by Transemantics brought the building to full occupancy. Meanwhile several tenants in the East End left the submarket or shed some of their space, including the National Park Service and the Corporation for National and Community Service, and law firms such as Ropes & Gray.
Whether this trend will continue is unclear but DTZ has come to one conclusion: the DC market is still leaning in favor of tenants.
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