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Quarterly Market Report
2nd Quarter 2020
Suburban Maryland
lpcwashingtondc.com
2
Table of Contents
Metropolitan D.C. Market Overview .....................................3
Suburban Maryland Quarterly Overview ............................5
Suburban Maryland Top Leases ........................................... 8
Suburban Maryland Top Sales .............................................. 9
Market Spotlight, 2Q 2020
Bethesda-Chevy Chase ....................................................10
North Bethesda-Potomac ................................................ 12
Rockville ................................................................................ 14
North Rockville .................................................................... 16
Gaithersburg-Germantown ............................................. 18
Silver Spring .......................................................................... 19
Beltsville-Calverton ........................................................... 21
Greenbelt-College Park ................................................... 22
Landover-Largo-Capitol Heights .................................. 23
National Harbor-Oxon Hill .............................................. 24
Columbia South ................................................................. 25
Prince George’s County Industrial ................................ 26
Baltimore-Washington Corridor Industrial ..................27
Frederick .............................................................................. 28
Frederick Flex ..................................................................... 29
Broker Biographies......................................................................30
Paul Kern Senior Vice President
pkern@lpc.com | 301.304.8399
Brent Prossner Senior Vice President
bprossner@lpc.com | 410.659.1234
Kyle Bell Vice President
kbell@lpc.com | 410.659.1234
Tim Weitzel Associate
tweitzel@lpc.com | 301.304.8397
Richard Coppola Associate
rcoppola@lpc.com | 301.304.8300
Maryland Leasing & Market Research
Overall Market Summary
Metropolitan D.C. Market Overview 2nd Quarter 2020
The Washington, DC Metropolitan commercial real estate market is comprised of approximately 429.6 million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland.
The total vacancy rate ticked up to 14.0% at the end of the second quarter, while the market recorded 364,843 square feet of net absorption. Northern Virginia and Suburban Maryland both posted positive net absorption for the quarter with a combined 396,089 square feet absorbed.
Leasing activity for the quarter totaled 3,447,954 square feet. The largest lease executed was a 396,740-square-foot relet by Microsoft at 11955 Freedom Drive - Two Freedom Square @ RTC, in Northern Virginia.
At the end of the quarter, there was 6,876,206square feet under construction, with 69% of the space pre-leased. No buildings broke ground
this quarter; while five buildings, totaling 928,957 square feet, delivered. The largest addition was 1750 Presidents Street - 17Fifty delivering 276,000 square feet (100% leased to LEIDOS) to the Reston submarket in VA.
There were six sale transactions in the second quarter, totaling $328.75 million. The largest sale was 1530 Wilson Boulevard trading for $71,400,000 ($427 psf) in the RB Corridor of VA.
Average asking rental rates increased $0.34 to $39.50 per square foot, Full Service.
From May 2019-May 2020 the DC Metropolitan Statistical Area (MSA) lost 67,200 jobs, representing a contraction of 8.5%% YOY, while the unemployment rate increased to 9.0%.
3 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
DC VA MDMetro Area (YTD)
Direct Vacancy (2Q 2020) 12.0% 13.8% 13.1% 13.0%
Total Vacancy (2Q 2020) 13.2% 14.5% 14.0% 14.0%
Total Net Absorption(YTD 2020) -792 -352,443 -121,021
-474,256 SF
Leasing Activity (YTD 2020) 3,452,820 3,396,769 1,441,094 8.3 M SF
Market Outlook / COVID-19
Metropolitan D.C. Market Overview 2nd Quarter 2020
4 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
The impact of the COVID-19 pandemic on our daily lives, and commercial real estate, is extremely fluid. The DC region is currently in Phase 2 of re-opening, including the re-opening of non-essential retail and the voluntary return for office workers. While office buildings have re-opened, the vast majority of DC area employees, including the government, continue to telework (less than 20% have returned to the office). Upticks in vacancy and decreased net absorption are expected for the next two quarters, as tenants and the CRE industry continue to whether the pandemic. The DC area has seemed to ‘flatten the curve” while most of the South and West of the country have seen a recent spike in cases and have re-imposed some business closures. While industry experts remain hopeful that the economy will improve by late 2020 or early 2021, locally, the next few weeks will decide if the DC area is ready to move into Phase 3, plateau on Phase 2, or possibly regress due to an influx in COVID-19 cases.
Market fundamentals for the Metropolitan Washington, DC office market continued to soften in the second quarter 2020 due to the COVID-19 pandemic. Even though close to 365,000 square feet was absorbed in the second quarter, total vacancy ticked up to 14.0% for the metro area (absorption is still negative for the region YTD 2020). Despite the pandemic, leasing activity was only down 29% quarter-over-quarter, as velocity was driven by an increase of sizable tenant renewals across the metro. Investment sales, as expected, were few, as most negotiations have stalled. A very limited amount of new buildings, if any, are expected to come to market near term. The region lost 67,200 jobs YOY ending May 2020 with the Leisure & Hospitality sector suffering the majority of these losses (49,600 jobs). The current unemployment rate increased to 9.0% in the DC Metro, but it is still lower than the 11.1% national average. Incredibly, the Washington, DC MSA ranks 4th nationally in unemployment (in MSAs over 1 million in population).
San Francisco 1,400,000New York 1,300,000Boston 1,200,000Los Angeles 905,000Atlanta 800,000Chicago 425,000DC Metro 334,000
Sublease Added 2Q 2020 (SF)
1,400,000
1,300,000
1,200,000
905,000
800,000
425,000
334,000
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
San Francisco
New York
Boston
Los Angeles
Atlanta
Chicago
DC Metro
Sublease Space Added 2Q 2020 (SF)
The COVID-19 pandemic has caused a substantial increase of sublease space available on the market nationally. The DC Metro area added 334,000 square feet of available sublease space to the market in the second quarter 2020. However, DC has added the least amount of available sublease space compared to other major markets (see chart below).
5lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Suburban Maryland 2nd Quarter 2020
Market Summary
The Suburban Maryland office market, which encompasses Montgomery and Prince George’s Counties, totals approximately 89.3 million square feet of rentable space in 896 office buildings of 25,000 square feet and greater.
The market recorded an increase in net absorption in the second quarter of 2020 with 35,852 square feet absorbed, up from the -156,873 square feet absorbed in the previous quarter.
Direct vacancy remained flat at 13.1% in the second quarter 2020, and total vacancy increased slightly to 14.0%.
There were no significant office building sales in Suburban Maryland during the second quarter 2020.
The largest lease signed this quarter was the FDA signing a 93,014-square-foot renewal at 12420 Parklawn Drive in the Rockville submarket.
The year-over-year unemployment rate in Suburban Maryland increased to 9.0% in May 2020, up significantly from 2.9% in May 2019. Unemployment in Suburban Maryland remains well below the national unemployment rate of 11.1%.
From May 2019 to May 2020 employment in Suburban Maryland had a net decrease of 63,471 jobs. Sectors with the greatest amount of job loss were Leisure and Hospitality with 25,000 jobs lost, Education and Health Services with 11,300 jobs lost, Trade, Transportation and Utilities with 9,500 jobs lost, and Professional and Business Services with 8,300 jobs lost. Government jobs decreased by 600 jobs year-over-year.
YTD 2020 2Q 2020 1Q 2020 2Q 2019
Direct Vacancy 13.1% 13.1% 13.1% 13.2%
Total Vacancy 14.0% 14.0% 13.9% 13.8%
NetAbsorption (SF) -121,021 35,852 -156,873 132,717
Leasing Activity (SF) 1.4 M 439,412 1,001,682 1.1 M
Under Construction (SF) 2.0 M 2.0 M 2.0 M 2.2 M
Deliveries (SF) 0 0 0 0
Rental Rates(PSF, FS) $27.83 $27.83 $27.95 $27.93
U/C Percent Pre-Leased 73% 73% 73% 68%
6 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Deliveries vs. Under Construction
0.0
0.5
1.0
1.5
2.0
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction
Suburban Maryland 2nd Quarter 2020
Vacancy RateThe direct vacancy rate remained flat at 13.1% in the second quarter 2020, totaling approximately 11.5 million square feet. Total vacancy increased slightly to 14.0%, up from 13.9% in the first quarter 2020, totaling approximately 12.5 million square feet.
The sublease vacancy rate decreased slightly to 0.8%, representing 725,478 square feet of vacant space, up from 747,375 square feet in the first quarter 2020.
The Class A total vacancy rate decreased to 14.1% in the second quarter, down from 14.3%, totaling approximately 6.5 million square feet. The Class B total vacancy rate increased to 14.2% in the second quarter, up from 13.7%, totaling approximately 5.3 million square feet.
Class Vacancy Rates
0
2
4
6
8
10
12
14
16
18
20
22
CBASF
(Mill
ions
)
(%) of Building Class Vacant
14.1% 14.2%
10.5%
Construction & DeliveriesAt the end of the second quarter 2020, there were six buildings under construction, totaling 2,001,377 square feet.
909 Rose Avenue (Class A, 212,000 sf, 31% pre-leased) is set to deliver in August 2020. 9800 Medical Center Drive - Building F (Class A, 175,840 sf, 100% pre-leased) is set to deliver in October 2020. 9950 Medical Center Drive (Class A, 84,264 sf, 100% pre-leased) is set to deliver in September 2020.
7272 Wisconsin Avenue (Class A, 361,609 sf, 68% pre-leased) is set to deliver in August 2020. 7373 Wisconsin Avenue (Class A, 382,664 sf, 0% pre-leased) is set to deliver in July 2021.
The Marriott Headquarters at 7750 Wisconsin Avenue (Class A, 785,000 sf, 100% pre-leased) is scheduled to deliver in January 2022.
No buildings delivered this quarter.
7lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Suburban Maryland 2nd Quarter 2020
Montgomery CountyAbsorption & Gross LeasingThe Suburban Maryland market recorded 35,852 square feet of net absorption in the second quarter 2020, an increase from the -156,873 square feet absorbed in the first quarter 2020.
In the second quarter 2020, leasing activity totaled 439,412 square feet, a 56.1% decrease from the 1,001,682 square feet leased in the previous quarter.
Eight of the Top Ten leases signed this quarter were in Montgomery County and ranged between 93,014 and 8,195 square feet.
Nine of the leases in the Top Ten this quarter were private sector transactions.
The total average asking rental rate was $27.83 Full Service in the second quarter 2020, down $0.12 from the previous quarter. The Class A asking rental rate was $31.06 Full Service, a $0.10 increase from the previous quarter.
YTD 2020 2Q 2020 1Q 2020 2Q 2019
Inventory (SF) 66.4 M 66.4 M 66.4 M 65.6 M
Direct Vacancy 12.3% 12.3% 12.4% 12.6%
Total Vacancy 13.4% 13.4% 13.5% 13.4%
Net Absorption (SF) -250,508 54,969 -305,477 70,089
Leasing Activity (SF) 1,173,183 364,588 808,595 879,590
Under Construction (SF) 2.0 M 2.0 M 2.0 M 2.2M
Deliveries (SF) 0 0 0 0
Rental Rates (PSF, FS) $29.65 $29.65 $29.87 $30.01
Prince George’s County
YTD 2020 2Q 2020 1Q 2020 2Q 2019
Inventory (SF) 22.9 M 22.9 M 22.9 M 22.9 M
Direct Vacancy 15.4% 15.4% 15.3% 14.6%
Total Vacancy 15.6% 15.6% 15.5% 14.7%
Net Absorption (SF) 129,487 -19,117 148,604 62,628
Leasing Activity (SF) 268,419 74,824 193,595 136,431
Under Construction (SF) 0 0 0 0
Deliveries (SF) 0 0 0 0
Rental Rates (PSF, FS) $22.25 $22.45 $22.24 $21.98
8 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Suburban Maryland 2nd Quarter 2020
Top Ten LeasesIn the second quarter 2020, eight of the Top Ten leases were in Montgomery County and private sector transactions again dominated leasing activity. Five of the top ten leases were new leases, with New York Life’s 37,237-square-foot lease marking the largest new lease of the quarter.
The largest lease executed in Montgomery County was a renewal totaling 93,014 square feet signed by the FDA at 12420 Parklawn Drive in the Rockville submarket. In the second quarter 2020, no single sector or industry dominated leasing activity in Sub-urban Maryland. Medical tenants were well-repre-sented in the top ten leases with Suburban Hos-pital’s 11,563-square-foot lease at 6001 Montrose
Road, and IT services were also well-represented as OpenText renewed for 50,375 square feet at 9711 Washingtonian Boulevard, and Cybrary signed a 35,599-square-foot lease at 4600 River Road. GSA tenants accounted for one of Subur-ban Maryland’s top ten leases, as the FDA signed a 93,014-square-foot renewal at 12420 Parklawn Drive.
The Suburban Maryland market totaled 439,412 square feet of leasing activity in the second quarter 2020, a decrease from the 1,001,682 square feet leased in the first quarter 2020.
4600 River Rd
Tenant Cybrary
Size 35,599 SF
Type New
14995 Shady Grove Rd
Tenant Unknown
Size 13,195 SF
Type New
12420 Parklawn Dr
Tenant GSA - FDA
Size 93,014 SF
Type Renewal
20410 Observation Dr
Tenant Unknown
Size 13,193 SF
Type New
6001 Montrose Rd
Tenant Suburban Hospital
Size 11,563 SF
Type Renewal
6905 Rockledge Dr
Tenant New York Life
Size 37,237 SF
Type New
7700 Wisconsin Ave
Tenant Comcast SportsNet
Size 28,477 SF
Type Renewal
7474 Greenway Center Dr
Tenant Peraton
Size 8,195 SF
Type Renewal
909 Rose Ave
Tenant One Digital
Size 15,865 SF
Type New
9711 Washingtonian Blvd
Tenant OpenText
Size 50,375 SF
Type Renewal
9lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Top Sales
Suburban Maryland 2nd Quarter 2020
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Significant Sales This Quarter
Suburban MD
N/A N/A N/A N/A N/A N/A N/A
10 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 12.0% in the second quarter 2020, up from 11.8% in the first quarter 2020. The total vacancy rate, however, decreased to 14.0% in the second quarter of 2020, down from 14.1% in the first quarter 2020. Class A total vacancy increased to 15.8% in the second quarter 2020, up from 14.8% in the first quarter, while the asking rental rate average decreased to $42.49 Full Service in the second quarter 2020, down $0.22 from the previous quarter.
Total net absorption was -18,499 square feet in the second quarter 2020, up from the -196,076 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter to 62,876 square feet, down from 118,777 square feet leased in the previous quarter. A contributing tenant was Comcast SportsNet signing a 28,477-square-foot renewal at 7700 Wisconsin Avenue.
There are currently three buildings under construction in the Bethesda/Chevy Chase submarket: 7272 Wisconsin Avenue, a 361,609-square-foot, Class A building, 7750 Wisconsin Avenue, Marriott’s 785,000-square-foot headquarters, and 7373 Wisconsin Avenue, a 382,664-square-foot, Class A building.
10 Year Averages (2010 - 2019)
Total Absorption 10,567 SF / Year
Deliveries (SF) 57,779 SF / Year
Leasing Activity 859,849 SF / Year
Market Stats
Inventory 11.3 M SF
Direct Vacancy 12.0 %
Total Vacancy 14.0 %
1Q 2020 Absorption -18,499 SF
YTD 2020 Absorption -214,575 SF
Under Construction 1.5 M SF
Percent Pre-Leased 67.3 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $34.98
PSF
2019: $37.64
PSF
YTD 2020: $39.09
PSF
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
3
6
9
12
15
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Bethesda-Chevy Chase
11lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Market Spotlight
2nd Quarter 2020Bethesda-Chevy Chase
Major Leases
Under Construction
Sales
Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants
7272 Wisconsin AveBethesda/Chevy Chase
361,609 SF 117,260 SF 79% 8/2020 Carr PropertiesFox 5; Enviva Partners; ProShares; WeWork
Marriott Headquarters 7750 Wisconsin Ave
Bethesda/Chevy Chase
785,000 SF 0 SF 100% 1/2022Bernstein Co. / Boston Properties
Marriott International
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Sales This QuarterBethesda/Chevy Chase
N/A N/A N/A N/A N/A N/A N/A
7700 Wisconsin Ave
Tenant Comcast SportsNet
Size 28,477 SF
Type Renewal
5530 Wisconsin Ave
Tenant Internal Cardiology Medicine
Size 3,871 SF
Type New
7373 Wisconsin AveBethesda/Chevy Chase
382,664 SF 382,664 SF 0% 7/2021 Stonebridge N/A
12 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 14.9% in the second quarter 2020, up from 14.4% in the first quarter. Total vacancy increased to 16.0% in the second quarter 2020, up from 15.5% in the previous quarter. Class A total vacancy remained steady to 12.5% in the second quarter 2020, while the average asking rental rate increased to $30.58 Full Service in the second quarter, down $0.77 from the previous quarter.
Total net absorption was -58,472 square feet in the second quarter 2020, down from the 70,214 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter 2020 to 36,171 square feet, up from 178,644 square feet leased in the previous quarter. A contributing tenant was New York Life signing a 37,237-square-foot lease at 6905 Rockledge Drive.
One building is currently under construction in the North Bethesda submarket. 909 Rose Avenue (Class A, 212,000 sf, 30.7% pre-leased) is set to deliver in August 2020.
10 Year Averages (2010 - 2019)
Total Absorption 19,904 SF / Year
Deliveries (SF) 52,844 SF / Year
Leasing Activity 902,842 SF / Year
Market Stats
Inventory 10.7 M SF
Direct Vacancy 14.9 %
Total Vacancy 16.0 %
2Q 2020 Absorption -58,472 SF
YTD 2020 Absorption 11,742 SF
Under Construction 212,000 SF
Percent Pre-Leased 30.7 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $29.18
PSF
2019: $28.76
PSF
YTD 2020: $28.99
PSF
-0.75
-0.50
-0.25
0.00
0.25
0.50
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
4
8
12
16
20
24
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020North Bethesda-Potomac
13lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Market Spotlight
2nd Quarter 2020North Bethesda-Potomac
Major Leases
Under Construction
Sales
Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants
909 Rose Ave North Bethesda - Potomac
212,000 146,874 30.7% 8/2020 Federal Realty One Digital, Federal Realty
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Sales This Quarter North Bethesda - Potomac
N/A N/A N/A N/A N/A N/A N/A
6905 Rockledge Dr
Tenant New York Life
Size 37,237 SF
Type New
6710 Rockledge Dr
Tenant Centers for Advanced Orthopaedics
Size 6,775 SF
Type New
909 Rose Ave
Tenant One Digital
Size 15,865 SF
Type New
14 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate held steady at 10.1% in the second quarter 2020. The total vacancy rate also held steady at 10.4% in the second quarter 2020. Class A total vacancy decreased to 11.2% in the ssecond quarter, down from 11.4% in the first quarter 2020, while the asking rental rate average increased to $32.51 Full Service in second quarter, up $0.10 from the previous quarter.
Total net absorption was 2,878 square feet in the second quarter 2020, up from 10,103 square feet absorbed in the first quarter 2020. Contributing to the positive net absorption was FCN moving in to their 5,866-square-foot space at 12501 Ardennes Ave.
Total leasing activity increased in the second quarter 2020 to 127,831 square feet, up from the 72,672 square feet leased in the previous quarter. A contributing tenant was the GSA - FDA signing a 93,014-square-foot renewal at 12420 Parklawn Drive.
10 Year Averages (2010 - 2019)
Total Absorption 120,051 SF / Year
Deliveries (SF) 89,380 SF / Year
Leasing Activity 661,078 SF / Year
Market Stats
Inventory 9.7 M SF
Direct Vacancy 10.1 %
Total Vacancy 10.4 %
2Q 2020 Absorption 2,878 SF
YTD 2020 Absorption 12,981 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $29.15
PSF
2019: $30.32
PSF
YTD 2020: $30.20
PSF
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
3
6
9
12
15
18
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Rockville
15lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Market Spotlight
2nd Quarter 2020Rockville
Major Leases
Under Construction
Sales
Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants
No new construction during this quarter Rockville N/A N/A N/A N/A N/A N/A
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Sales This Quarter Rockville N/A N/A N/A N/A N/A N/A N/A
12420 Parklawn Dr
Tenant GSA - FDA
Size 93,014
Type Renewal
3206 Tower Oaks Blvd
Tenant I.M. Systems Group
Size 5,866 SF
Type Renewal
6001 Montrose Rd
Tenant Suburban Hospital
Size 11,563
Type Renewal
16 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 13.6% in the second quarter 2020, down from 14.2% in the first quarter 2020. Total vacancy decreased to 14.3% in the second quarter 2020, down from 14.9% in the previous quarter. Class A total vacancy decreased to 15.6% in the second quarter, down from 16.1% in the first quarter 2020, while the asking rental rate average increased to $30.00 Full Service in second quarter, down $0.28 from the previous quarter.
Total net absorption was 79,702 square feet in the second quarter 2020, a significant increase from the -171,853 square feet absorbed in the first quarter 2020. A contributing tenant was Otsuka America Pharmaceuticals expanding into an additional 25,522 square feet at 2440 Research Blvd.
Total leasing activity decreased in the second quarter to 81,954 square feet, down from 302,486 square feet leased in the previous quarter. A contributing tenant was Open Text signing a 50,379-square-foot renewal at 9711 Washingtonian Blvd.
Two buildings are currently under construction in the North Rockville submarket. 9950 Medical Center Drive (Class A, 84,264 sf, 100% pre-leased) is set to deliver in September 2020. 9800 Medical Center Drive- Building F (Class A, 175,840 sf, 100% pre-leased) is set to deliver in October 2020.
10 Year Averages (2010 - 2019)
Total Absorption 113,329 SF / Year
Deliveries (SF) 70,037 SF / Year
Leasing Activity 960,622 SF / Year
Market Stats
Inventory 13.2 M SF
Direct Vacancy 13.6 %
Total Vacancy 14.3%
2Q 2020 Absorption 79,702 SF
YTD 2020 Absorption -92,151 SF
Under Construction 260,104 SF
Percent Pre-Leased 100 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $27.73
PSF
2019: $27.71
PSF
YTD 2020: $28.55
PSF
-0.35
-0.10
0.15
0.40
0.65
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
4
8
12
16
20
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020North Rockville
17lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Market Spotlight
2nd Quarter 2020North Rockville
Major Leases
Under Construction
Sales
Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants
9800 Medical Center Dr Building F N. Rockville 175,840 SF 0 SF 100% 10/2020
Alexandria Real Estate Equities
RegenXBio
9950 Medical Center Dr N. Rockville 84,264 SF 0 SF 100% 9/2020Alexandria Real Estate Equities
Autolus Therapeutics
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Sales This Quarter N. Rockville N/A N/A N/A N/A N/A N/A N/A
N. Rockville
N. Rockville
N. Rockville
9711 Washingtonian Blvd
Tenant Open Text
Size 50,375 SF
Type Renewal
9430 Key West Ave
Tenant United Urology
Size 7,237 SF
Type Renewal
15825 Shady Grove Rd
Tenant L3 Technologies
Size 8,112 SF
Type Renewal
9901 Belward Campus Dr
Tenant CirrusDx
Size 4,721 SF
Type New
18 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 11.8% in the second quarter 2020, down from 12.0% in the first quarter. Total vacancy decreased to 12.0% in the second quarter, down from 12.1% in the first quarter 2020. Class A total vacancy increased to 13.5% in the second quarter 2020, up from 14.1% in the first quarter 2020, while the asking rental rate average increased to $29.19 Full Service in first quarter, up $0.09 from the previous quarter.
Total net absorption was 11,327 square feet in the first quarter 2020, up from the -79,097 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter to 30,981 square feet, down from 37,479 square feet leased in the previous quarter. A contributing tenant was Wood IP LLC signing a 3,142-square-foot renewal at 555 Quince Orchard Road.
10 Year Averages (2010 - 2019)
Total Absorption 60,409 SF / Year
Deliveries (SF) 24,229 SF / Year
Leasing Activity 390,205 SF / Year
Market Stats
Inventory 9.0 M SF
Direct Vacancy 11.8 %
Total Vacancy 12.0 %
2Q 2020 Absorption 11,327 SF
YTD 2020 Absorption -67,770 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $22.20
PSF
2019: $25.72
PSF
YTD 2020: $25.79
PSF
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption0
5
10
15
20
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Gaithersburg-Germantown
19 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 13.7% in the second quarter 2020, down from 14.3% in the first quarter. Total vacancy decreased to 16.3% in the second quarter, down from 16.9% in the first quarter 2020. Class A total vacancy decreased to 19.8% in the second quarter, down from 20.7% in the first quarter 2020. The Class A asking rental rate average decreased to $32.40 Full Service in second quarter, down $0.17 from the previous quarter.
Total net absorption was 38,033 square feet in the second quarter 2020, down from 90,465 square feet absorbed in the first quarter 2020. A contributing tenant was Tuberous Sclerosis Alliance occupying their 5,448-square-foot space at 8701 Georgia Avenue.
Total leasing activity decreased in the second quarter 2020 to 25,277 square feet, down from 44,357 square feet leased in the previous quarter. A contributing tenant was Aegis signing a 7,571-square-foot lease at 8455 Colesville Road.
10 Year Averages (2010 - 2019)
Total Absorption -40,328 SF / Year
Deliveries (SF) 19,932 SF / Year
Leasing Activity 455,626 SF / Year
Market Stats
Inventory 6.4 M SF
Direct Vacancy 13.7 %
Total Vacancy 16.3 %
2Q 2020 Absorption 38,033 SF
YTD 2020 Absorption 128,498 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $27.63
PSF
2019: $30.21
PSF
YTD 2020: $30.69
PSF
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
2
4
6
8
10
12
14
16
18
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Silver Spring
20lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Market Spotlight
2nd Quarter 2020Silver Spring
Major Leases
Under Construction
Sales
Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants
No new construction Silver Spring
N/A N/A N/A N/A N/A N/A
Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate
No Sales This Quarter Silver Spring
N/A N/A N/A N/A N/A N/A N/A
8455 Colesville Rd
Tenant Aegis
Size 7,571 SF
Type New
8403 Colesville Rd
Tenant Discovery Learning Alliance
Size 3,079 SF
Type New
962 Wayne Ave
Tenant Taliored Solutions and Consulting, Inc.
Size 3,072 SF
Type New
21 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 17.8% in the second quarter 2020, up from 17.7% in the first quarter 2020. The total vacancy rate increased to 18.7%, up from 18.6% in the previous quarter. Class A total vacancy increased to 20.4% in the second quarter 2020, up from 20.3% in the first quarter 2020. The asking rental rate average increased to $23.14 Full Service in the second quarter, up $0.01 from the previous quarter.
Total net absorption was -1,917 square feet in the second quarter, down from 15,652 square feet absorbed in the previous quarter.
Total leasing activity decreased in the first quarter to 1,000 square feet, down from 15,150 square feet leased in the previous quarter. Contributing to leasing activity was Griffin Firm, Pllc signing a 1,000-square-foot lease at 4041 Powder Mill Road.
10 Year Averages (2010 - 2019)
Total Absorption 8,016 SF / Year
Deliveries (SF) 0 SF / Year
Leasing Activity 97,884 SF / Year
Market Stats
Inventory 1.6 M SF
Direct Vacancy 17.8 %
Total Vacancy 18.7 %
2Q 2020 Absorption -1,917 SF
YTD 2019 Absorption 13,735 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $20.11
PSF
2019: $20.93
PSF
YTD 2020: $20.70
PSF
-0.50
-0.25
0.00
0.25
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
5
10
15
20
25
30
35
40
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Beltsville-Calverton
22 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 15.6% in the second quarter 2020, up from 15.5% in the first quarter. The total vacancy rate increased to 15.9% in the second quarter, up from 15.7% in the previous quarter. Class A total vacancy increased to 15.7% in the second quarter, up from 15.6% in the previous quarter. The Class A asking rental rate average decreased to $25.10 Full Service in the second quarter, down $0.05 from the previous quarter.
Total net absorption was -15,566 square feet in the second quarter, down from 96,119 square feet absorbed in the first quarter 2020. Contributing to the negative net absorption was ASRC Federal Space & Defense vacating 13,621 square feet at 7515 Mission Drive.
Total leasing activity increased in the second quarter to 51,688 square feet, up from 15,706 square feet leased in the previous quarter. A contributing tenant was Cybrary signing a 27,819-square-foot lease at 4600 River Road.
10 Year Averages (2010 - 2019)
Total Absorption 55,596 SF / Year
Deliveries (SF) 46,676 SF / Year
Leasing Activity 440,778 SF / Year
Market Stats
Inventory 7.4 M SF
Direct Vacancy 15.6 %
Total Vacancy 15.9 %
2Q 2020 Absorption 15,566 SF
YTD 2020 Absorption 80,553 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $21.07
PSF
2019: $21.72
PSF
YTD 2020: $23.11
PSF
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
4
8
12
16
20
24
28
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Greenbelt-College Park
23 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 15.4% in the second quarter 2020, down from 15.5% in the first quarter 2020. Total vacancy decreased to 15.6% in the second quarter, down from 15.7% in the previous quarter. Class A total vacancy decreased to 15.8% in the second quarter, down from 16.0% in the previous quarter. The Class A asking rental rate average increased to $27.53 Full Service in the second quarter, up $0.39 from the previous quarter.
Total net absorption was 4,752 square feet in the second quarter, down from the 6,246 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter to 12,628 square feet, down from 27,457 square feet leased in the previous quarter. A contributing tenant was WMATA signing a 5,494-square-foot lease at 8100 Professional Place.
10 Year Averages (2010 - 2019)
Total Absorption 50,489 SF / Year
Deliveries (SF) 21,553 SF / Year
Leasing Activity 238,913 SF / Year
Market Stats
Inventory 3.4 M SF
Direct Vacancy 15.4 %
Total Vacancy 15.6 %
2Q 2020 Absorption 4,752 SF
YTD 2020 Absorption 10,998 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $20.11
PSF
2019: $22.77
PSF
YTD 2020: $23.05
PSF
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
4
8
12
16
20
24
28
32
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Landover-Largo-Capitol Heights
24 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 14.0% in the second quarter 2020, down from 13.4% in the first quarter. The total vacancy rate increased to 14.0%, up from 13.4%. Class A total vacancy increased to 15.1% in the second quarter, up from 14.7% in the first quarter 2020, while the average asking rental rate increased to $33.41 Full Service in second quarter, up $0.33 from the previous quarter.
Total net absorption was -6,386 square feet in the second quarter 2020, up slightly from the -7,624 square feet absorbed in the first quarter.
Total leasing activity increased in the second quarter 2020 to 9,508 square feet, up from 4,144 square feet leased in the previous quarter. A contributing tenant was Alexander & Cleaver signing a 2,524-square-foot lease at 6710 Oxon Hill Rd.
10 Year Averages (2010 - 2019)
Total Absorption 11,822 SF / Year
Deliveries (SF) 9,500 SF / Year
Leasing Activity 56,758 SF / Year
Market Stats
Inventory 1.1 M SF
Direct Vacancy 14.0 %
Total Vacancy 14.0 %
2Q 2020 Absorption -6,386 SF
YTD 2020 Absorption -14,010 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $23.21
PSF
2019: $27.58
PSF
YTD 2020: $26.69
PSF
-0.10
-0.05
0.00
0.05
0.10
0.15
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
5
10
15
20
25
30
35
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020National Harbor-Oxon Hill
25 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 10.7% in the second quarter 2020, up from 10.4% in the first quarter. Total vacancy increased to 11.1% in the second quarter, up from 10.8% in the first quarter 2020. Class A total vacancy increased to 11.1% in the second quarter, up from 10.6% in the first quarter 2020. Class A asking rental rate average increased to $26.75 Full Service in the second quarter, up $0.01 from the previous quarter.
Total net absorption was -29,207 square feet in the second quarter, up from the -128,889 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the first quarter to 96,564 square feet, down from 149,039 square feet leased in the previous quarter. A contributing tenant was Office Depot signing an 8,000-square-foot lease at 6304 Woodside Court.
There is currently one property under construction: 11100 Johns Hopkins Road (Class A, 263,000 SF, 100% pre-leased) is set to deliver October 2020.
10 Year Averages (2010 - 2019)
Total Absorption 186,413 SF / Year
Deliveries (SF) 184,034 SF / Year
Leasing Activity 769,944 SF / Year
Market Stats
Inventory 9.5 M SF
Direct Vacancy 10.7 %
Total Vacancy 11.1 %
2Q 2020 Absorption -29,207 SF
YTD 2020 Absorption -158,096 SF
Under Construction 263,000 SF
Percent Pre-Leased 100 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $21.43
PSF
2019: $24.83
PSF
YTD 2020: $24.37
PSF
-0.30
-0.05
0.20
0.45
0.70
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption0
4
8
12
16
20
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Columbia South
26 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 7.7% in the second quarter 2020, up from 7.6% in the first quarter 2020. The total vacancy rate increased to 8.0%, up from 7.9% in the previous quarter.
Total net absorption was -26,006 square feet in the second quarter 2020, down from the 184,013 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter 2020 to 146,400 square feet, down from 258,846 square feet leased in the previous quarter. A contributing tenant was Amazon signing a 139,200-square-foot lease at 7100 Holladay Tyler Road.
There are currently two buildings under construction: 5801 Columbia Park Rd (Class A, 206,000 sf, 100% pre-leased) is set to deliver in July 2020. 716 Ritchie Road (Class A, 160,000 sf, 0% pre-leased) is set to deliver in December 2020.
Three properties delivered in the second quarter 2020: 4600 Hargrove Dr (Class A, 192,718 square feet, 0% pre-leased) delivered in June 2020. 4450 Hargrove Dr (Class A, 101,194 square feet, 0% pre-leased) delivered in June 2020. 4500 Hargrove Dr (Class A, 106,543 square feet, 0% pre-leased) delivered in June 2020.
10 Year Averages (2010 - 2019)
Total Absorption 362,158 SF / Year
Deliveries (SF) 287,669 SF / Year
Leasing Activity 1.2M SF / Year
Market Stats
Inventory 21.7 M SF
Direct Vacancy 7.7 %
Total Vacancy 8.0 %
2Q 2020 Absorption -26,006 SF
YTD 2020 Absorption 158,007 SF
Under Construction 366,000 SF
Percent Pre-Leased 56.3 %
YTD 2020 Deliveries 400,455 SF
Asking Rental Rates (Triple Net)
2010: $6.22
PSF
2019: $6.92
PSF
YTD 2020: $7.17 PSF
-0.5
0.0
0.5
1.0
1.5
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
3
6
9
12
15
18
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Prince George’s County Industrial
27 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate increased to 6.9% in the second quarter 2020, up from 6.5% in the first quarter 2020. The total vacancy rate increased to 8.0%, up from 7.6% in the previous quarter.
Total net absorption was -196,395 square feet in the second quarter 2020, a decrease from the 596,892 square feet absorbed in the previous quarter. Contributing to the negative net absorption was Best Buy vacating their 220,800-square-foot space at 6680 Business Parkway.
Total leasing activity increased in the second quarter 2020 to 1,026,291 square feet, up from 406,235 square feet leased in the previous quarter. A contributing tenant included Simpson Strong-Tie signing a 87,600-square-foot lease at 7951 Oceano Avenue.
There are currently three buildings under construction. 1841 62nd St (80,100 sf, 0% pre-leased) is set to deliver April 2021. 1865 62nd St (66,690 sf, 0% pre-leased) is set to deliver April 2021. 6730 Dover Rd (66,600 sf, 0% pre-leased) is set to deliver December 2020.
10 Year Averages (2010 - 2019)
Total Absorption 763,068 SF / Year
Deliveries (SF) 591,728 SF / Year
Leasing Activity 4.3 M SF / Year
Market Stats
Inventory 52.7 M SF
Direct Vacancy 6.9 %
Total Vacancy 8.0 %
2Q 2020 Absorption -196,395 SF
YTD 2020 Absorption 400,497 SF
Under Construction 213,390 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 623,000 SF
Asking Rental Rates (Triple Net)
2010: $4.77
PSF
2019: $6.07
PSF
YTD 2020: $6.19
PSF
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
3
6
9
12
15
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020
Baltimore-Washington Corridor Industrial
28 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 10.9% in the second quarter 2020, down from 18.4% in the first quarter 2020. Total vacancy decreased to 10.9% in the second quarter 2020, down from 18.4% in the previous quarter.
Total net absorption was 327,826 square feet in the second quarter, up from 36,552 square feet absorbed in the previous quarter. Contributing to the positive net absorption was Frederick Health occupying all 387,008 square feet in their owner occupied property at 12 State Farm Drive.
Total leasing activity increased in the second quarter to 55,669 square feet, up from the 27,556 square feet leased in the previous quarter. A contributing tenant was United Health Group signing a 41,032-square-foot lease at 5275 Westview Drive.
10 Year Averages (2010 - 2019)
Total Absorption -12,176 SF / Year
Deliveries (SF) 21,510 SF / Year
Leasing Activity 220.025 SF / Year
Market Stats
Inventory 4.4 M SF
Direct Vacancy 10.9 %
Total Vacancy 10.9 %
2Q 2020 Absorption 327,826 SF
YTD 2020 Absorption 364,378 SF
Under Construction 0 SF
Percent Pre-Leased 0%
YTD 2019 Deliveries 0 SF
Asking Rental Rates (Full Service)
2010: $24.21
PSF
2019: $21.97
PSF
YTD 2020: $22.29
PSF
-0.4
-0.2
0.0
0.2
0.4
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
4
8
12
16
20
24
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Frederick Office
29 lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
HighlightsThe direct vacancy rate decreased to 6.3% in the second quarter 2020, down from 6.6% in the first quarter 2020. The total vacancy rate decreased to 7.4% in the second quarter, down from 7.7% in the first quarter 2020.
Total net absorption was 12,999 square feet in the second quarter, down from 37,977 square feet absorbed in the first quarter 2020.
Total leasing activity decreased in the second quarter 2020 to 14,655 square feet, down from the 47,280 square feet leased in the previous quarter. A contributing tenant was CIAN expanding in to an additional 12,460 square feet across 5330 and 5340 Spectrum Drive.
10 Year Averages (2010 - 2019)
Total Absorption 84,323 SF / Year
Deliveries (SF) 34,127 SF / Year
Leasing Activity 196,017 SF / Year
Market Stats
Inventory 3.8 M SF
Direct Vacancy 6.3 %
Total Vacancy 7.4 %
2Q 2020 Absorption 12,999 SF
YTD 2020 Absorption 50,976 SF
Under Construction 0 SF
Percent Pre-Leased 0 %
YTD 2020 Deliveries 0 SF
Asking Rental Rates (Triple Net)
2010: $10.81
PSF
2019: $12.02
PSF
YTD 2020: $11.14 PSF
-0.25
0.00
0.25
0.50
0.75
'20'19'18'17'16'15'14'13'12'11'10
SF (M
illio
ns)
Deliveries Under Construction Total Net Absorption
0
4
8
12
16
20
24
28
'20'19'18'17'16'15'14'13'12'11'10
Direct Vacancy Rate Total Vacancy Rate
Vaca
ncy
Rate
(%)
Market Spotlight
2nd Quarter 2020Frederick Flex
30lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Broker Biographies 2nd Quarter 2020
Experience 27 years experience
Professional Affiliations National Association of Office and Industrial Properties (Maryland and Washington, D.C.) Commercial Real Estate Brokerage Association
Education Denison University, Bachelors Degree
Paul (Rocky) Kern Managing Director & Senior Vice President Brokerage Services Group
About Paul (Rocky) Rocky joined Lincoln Property Company in 2017 and specializes in leasing and selling commercial properties in the Maryland suburbs of Washington, D.C. Over the last five years, Rocky has generated approximately $500 million in lease value with over 2 million SF leased. As Managing Director and Senior Vice President on Lincoln’s Maryland brokerage team, Rocky’s responsibilities include managing proposal and lease negotiations, prospecting, touring, presentations, reporting, and financial analysis. Rocky is consistently recognized as a Top Ten Broker and was named by the Commercial Real Estate Brokerage Association (CREBA) as a Multimillion Dollar Producer for the past 15 years. Prior to joining Lincoln Property Company, Rocky was a Managing Director and Team Leader at Cushman & Wakefield for 18 years.
31lpcwashingtondc.com101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.67004300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.46008120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300
Broker Biographies 2nd Quarter 2020
Experience 14 Years, including 8 years with Lincoln Property Company
Education Lehigh University Bachelor of Arts, International Business
Brent Prossner
Senior Vice President
Maryland Brokerage Services
About Brent
Brent joined Lincoln in 2011 as the Leasing Senior Vice President for the Baltimore and the Suburban Maryland Region. His focus will be leasing for both Landlords and Tenants, in office, industrial and flex product in Baltimore City, Baltimore, Hartford, Howard, Anne Arundel, Prince Georges County, and Montgomery Counties.
Prior to joining Lincoln, Brent was a Vice President for EDGE Commercial, LLC where he started at the inception to help transition, maintain, and grow Edge’s Landlord Representation. Prior to EDGE Commercial, he was an Associate at Scheer Partners where he assisted in the leasing of over 3.5 million square feet of office, industrial, and flex product throughout Prince George’s County.
Brent represents industrial users, technology firms, government contractors, medical practices, and non-profit agencies, as well as some of Maryland’s largest landlords. He and his partner, Kyle Bell have a current landlord portfolio over 3.2 million square feet stretching from North of Baltimore to the suburbs of DC with some of the representative landlord’s including Morgan Stanley, Invesco, JP Morgan, Meritage Properties, Ruppert Properties, Guardian Realty, etc.
A resident of Annapolis, outside of Real Estate he enjoys spending time on the Chesapeake Bay fishing and hunting.
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