WASHINGTON, DC—Leasing activity in the Washington DC area has risen 16% year to date, according to new figures set to be released by JLL. Small and mid-sized deals in Class B and Class C buildings have been driving a great deal of the activity, according to JLL's Office Insight Report for Q2 2015.
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. There were total occupancy gains of 1.1 million square feet during the second quarter, activity that marked the strongest expansion in the area's office market since the fourth quarter of 2010.
Nonprofits, associations, startups and creative companies were behind much of the activity, JLL says.
"This was a remarkably strong quarter," Scott Homa, JLL's Research Director tells GlobeSt.com. "The market is definitely started to click.
Anecdotally it has been clear that small and medium sized firms have been driving leasing activity, but these recent figures encapsulate how dramatic the trend is.
There was a significant divergence this quarter especially, Homa says. "There has been a 24% increase in deals under 100,000 square feet and a 21% decline in deals above 100,000 square feet."
Other stats from the report:
· There has been a 62.2% increase in leasing activity for blocks between 20,000 and 100,000 square feet in 2015 YTD, relative to a 4.7% decline in deals above 100,000 square feet.
· Among Class B and C buildings, there has been a 62.7% increase in leasing activity, relative to just a 0.7% increase in Class A leasing activity when comparing the first half of 2015 to the first half of 2014.
· While leasing activity is up over 16% year-over-year, sublease activity is up 23.7% year-over-year.
· Continuing a prominent trend in Q1, 92.3% of all new leases signed in 2015 to date were within half a miles of an existing or planned Metro stop.
Come back on Monday for a debate on whether these trends translate into a bona fide landlord office market.
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