Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-The Washington, DC-area’s real estate community appears to have hit bottom this last quarter–or at least is very close to it, according to Q3 numbers released by all of the major brokerages. “We are seeing positive demand for office space in Q3,” Kevin Thorpe, vice president and research director with Cassidy & Pinkard Colliers tells GlobeSt.com. “I do believe we are talking about the Washington, DC-area hitting bottom now, at least in terms of net demand.” Growth going forward, he predicts, will be driven primarily by the government.

Cassidy & Pinkard Colliers labeled Q3 as a turning point in terms of demand for office space in the DC region: the Washington metropolitan area office sector experienced an overall net absorption of negative 373,000 square feet–a significant improvement from the negative 748,000 square feet in the previous quarter. Also the area recorded positive net demand of 87,500 square feet.

CB Richard Ellis makes a similar assessment in its figures. Vacancy rates continue to climb, it notes, but the pace of declines is bottoming out. Vacancy rates jumped to 11.2%–and is expected to rise even further as spec supply continues to deliver throughout next year. Still, though, CBRE notes that tenant leasing activity is increasing–and in Q3 some 300,000 square feet of expansion space was committed. Vacancy rates will not be so problematic for Downtown or CBD, Ernest Jarvis, managing director of CBRE’s Washington office. Emerging markets like the Capitol Riverfront or NoMa, however will continue to experience high vacancy rates for the next 24 months, he predicts to GlobeSt.com. What will likely happen is landlords in these areas will come down further on rent, thus providing tenants key opportunities to lock in space in new buildings.

Jones Lang LaSalle, as well, is calling for the bottom, at least in the DC and Virginia markets. Maryland has about another nine months to go, according to the assessment. The stabilization in these markets is due, not surprisingly, to the federal government.

Even Maryland is receiving a boost, in the form of activity from the life sciences and Fannie Mae. According to JLL, the market saw more than 500,000 square feet of new sublease space this quarter from those sources.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.