Washington DC Office Space by the Numbers:

Are you looking for office space to lease in Washington DC? If so, here is a by-the-numbers look at the tenant-favorable market that awaits you.

1.2 million sq. ft.: According to CBRE Marketview, a quarterly report by CBRE, Washington D.C office market marked 1.2 million sf of positive net absorption in the second quarter of 2018 and 843,000 Sf in the third quarter.. The second quarter is the highest quarterly volume documented since the recession. This is resulted from the six deliveries with 2.4M sf. located in the CBD submarket. Some of the major deliveries are: Madison Marquette and PN Hoffman, a 232,000 S.F and now 79% preleased. Another one is Carr Properties Midtown Center at the 15^th Street, NW. it is a 770,000 S.F. building and 91% occupied by Fannie Mae, the largest private sector tenant in a single location in D.C.

2.2 million sq. ft. positive absorption: Resulted mostly by the top leases mentioned, Washington posted 843,000 sq. ft of positive absorption, bringing the current total of 2.2 million sq. ft. Afterward, vacancy rate went down 60 bps in the past quarters to 13%.

$56.36 per sq. ft Rental Rate.: Over all Rental rate ended at $56.36 per sq. ft.  Concessions for Trophy and Class A space remain at high, with tenant improvement allowances reaching $100 per sq. ft. and abatements averaging 1.2 months per year of term.

$2.7 Billion sales: Year to date, sales volume has reached $2.7 Billion. Notable transactions include Paramount Group’s sale, Commonwealth Partners and the Global Holdings’ acquisition of Washington Harbour for $415M. Moreover, there are more six buildings with almost total of $1 billion target sale before 2018 ends.  

804,000 jobs. The employment in Washington D.C. went up 1.1% over the year and created 804,000 jobs. The growth was contributed by non-office-using sectors, with Leisure and Hospitality firms creating the largest gain of 4,700 jobs. However, government sector continues to decrease, losing 0.8 % year over year at around 1900 jobs. This contraction in the government sector affected the overall job growth, because of the diversifying employment mix. Still, many of these jobs were re-created in the Professional and Business Services field, 11,000 jobs haven added year to date across the region, the largest number for any industry sector.

132,0000 sq. ft. new leases: Coworking sector is still expanding, new four operators are signing new leases as we enter the second half of 2018. 132,000 sq. ft. new models continued to arise, offering hotel-style shared spaces and coworking options.

692,000 sq. ft.: Education sector was the most significant driver of demand growth in the second half of the year with 692,000 sq. ft. of positive absorption.

3.6M sq. ft Leasing Activity: Leasing activity has reached its highest quarterly volume since the year 2016, it peaked at 3.6M square feet upon entering the second quarter of year 2018. More than half of the leasing volume is accounted by government users. The other top three leases are The Whittle lease with 666,000 sq. ft. long term, The Federal Communications Commission extended to 602,000 sf and the U.S. Attorney’s Office of D.C. for total of 416,000 sf.

1.7 million sq. ft.: Amount of new product that is slated to deliver in Q4 2018 at a current prelease rate of 76%. Without further preleasing, these 5 buildings will add 396,000 sq. ft. of vacant space to the market.

3.7 million sq. ft. delivery: New product to expect by the end of 2019 with 3.7 million sq. ft and currently 60% preleased.

3 million: The Washington DC metropolitan area boasts over 3 million nonfarm jobs with about two-thirds of those being office jobs. Employment growth has surged since 2015, with the gains seen in the business services, healthcare, and educational services sectors. This surge is expected to continue over the next few years. However, the study noted, the growth in these sectors did not necessarily translate to an uptick of office space absorption.

196,000 sf: The nonprofit, tech, coworking, and creative industry sectors provided the largest demand for office space in 2017 with a fourth quarter occupancy gain of 196,000 square feet. Of these, technology tenants absorbed 78,000 square feet in the fourth quarter, while the region's coworking sector continued to increase, with 44,000 square feet of net absorption. Nonprofits -- bolstered by expansions from Council for Affordable Quality Healthcare, the Bill and Melinda Gates Foundation, and Food & Water Watch -- absorbed 310,000 square feet of office space in 2017, with 60,000 posted in the fourth quarter. This led to nonprofits being the sector with the highest office space absorption for the year.

70: The Washington DC area is home to over 70 coworking locations. This sector saw the largest net new demand for office space in 2016, with growth continuing through 2017 and 2018.

657: The office market, as of one year ago, consisted of 657 buildings, providing 125 msf of space. Higher quality, Trophy and Class A assets outperformed those in the Class B and Class C categories throughout the year, with Trophy assets being the asset class to record occupancy gain in the fourth quarter of 2017.

56%: The increase in office space leasing volume in the fourth quarter of 2017 was 56%. This brought the total leasing volume to 6.8 msf for the year. However, in spite of the strong quarter, the volume was still significantly lower than the trailing 10-year average.

14.9%: As of the end of the fourth quarter of 2017, Washington DC saw an overall availability of office space of 14.9%, according to a report from Savills Studley. Some tightening was seen in suburban markets, including Northern Virginia, where an active fourth quarter led to a 25% increase in leasing activity over 2016's levels. Suburban Maryland also saw a slight decrease in availability, though the report noted that new construction is plentiful. Overall, there are plenty of options throughout the region for prospective tenants, the report stated.

7.8 msf: 2017 saw leasing activity on 7.8 msf of office space, with a third of that coming in the last quarter of the year, Savills Studley reported. Still, more options became available throughout the year, including an entire building in the East End submarket that was formerly occupied by the General Services Administration, who shifted its Pension Benefit Guaranty Corporation to 430,000 square feet in the Southwest submarket. Overall, accounting for this and new construction, availability increased 1.6 pp over year-to-year, which marks a seven-year high.

1.0 msf: Two new construction projects in the Bethesda/ Chevy Chase submarket resulted in more than 1.0 msf of new office space in 2017, according to Savills Studley. These projects included Marriott International's 700,000 sf relocation, as well as JBG Smith's securing of 65,000 sf to Booz Allen Hamilton and 54,000 to Host Hotels. The Bethesda/ Chevy Chase submarket is shaping up to be one of the tightest in the region, Savills Studley stated, and should provide excellent possibilities for tenants from landlords seeking to fill large vacancies.

$33.45 psf: An additional 2.1 msf of high-quality office space in the Northern Virginia suburbs caused overall rents to increase 1.8% through the year, with Class A rents climbing 2.6% year-over-year to $33.45 per square foot. Throughout the DC area, the diminishing supply of Class B office space due to repositioning has led to predictions that the rents for those assets would increase slightly. Rent for office space in Washington DC has largely remained flat over the past five years, but increased slightly in 2017 to an average of $54.99 per square foot per annum on a full service basis. This represents an increase of $.52 in the fourth quarter alone, according to a CBRE report. Concession prices on office leases continue to rise, the report added.

22%: The availability rate in Arlington County at the end of 2017 was 22%. While this is well above historical averages, Savills Studley noted, 900,000 sf of new office space was added to this submarket through the year. The area actually saw a strong performance in the fourth quarter, with activity bustling in the Rosslyn-Ballston Corridor. Several new leases highlighted this activity, including Avalon Bay Communities, with 73,242 sf; and The UVA Darden School of Business, with 39,547 sf.

24 msf: Private sector leases for office space larger than 50,000 square feet that are set to expire through 2020 total 24 million square feet. Most of these leases are held by law firms and nonprofits. Law firms are looking to reduce more than one quarter of their overall occupancy.

Would you like to know more about leasing office space in Washington DC? OfficeFinder, LLC has the experts in office tenants representation to help you find just the space you're looking for.