7-27-18

16C — July 27 - August 9, 2018 — Brokerage Directory — M id A tlantic

Real Estate Journal

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Savills Studley Q2 DC Office Market Report

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• Options continue to in- crease in Suburban Mary- land, with availability tick- ing up to 16.9%. • Nearly 1.0 msf was leased over the quarter, however it was predomi- nantly in the form of re- newals. No new leases over 30,000 sf were signed in Q2. • For the handful of tenants that executed re- locations or expansions, Bethesda / Chevy Chase remains the top choice and was able to lure coworking group Industrious to open its first outpost outside of

an additional 5.0 msf set to deliver by the end of 2019. • 90.0% of quarterly leas- ing activity came from the private sector with several large tenants executing ex- pansions this quarter in- cluding The Caryle Group, WeWork, and EverFi. • Asking rents increased by 1.4% over the year with the flux of new deliveries, however there is no sign of a pullback in the record-high concessions that prevail. Northern VA • A very slow stabiliza- tion continues in Northern

Virginia, with overall avail- ability creeping down 0.3pp over the quarter (and year) to 20.5%. • Stronger demand seen in recent quarters with a 24.7% increase in total mid-year leasing activity compared to last year. • Northern Virginia also saw large expansions from private-sector tenants, in- cluding Appian and Cvent, as Tysons Corner and the Silver Line markets con- tinue to secure a significant portion of market activity. Suburban MD

DC, and nuclear energy company, Orano USA to shift its DC and Virginia operations to Suburban Maryland. Savills Studley’s Regional Outlook At mid-year, DC is still boasting the most tenant- friendly conditions seen in at least two decades. Avail- ability remains elevated, and with the amount of new development in the pipeline, it is not expected to change dramatically in the foreseeable future. The uptick seen in activ- ity – particularly growing industry sectors like tech and coworking – is a testa- ment to tenants securing flexible and favorable terms now while conditions are advantageous. Market fundamentals in Northern Virginia are slowly stabilizing with an uptick in demand, yet are still far from “recovered” with the amount of space that remains available. Silver line markets are getting a fair share of the activity, and tenants have an abundance of new and existing options to choose from when evaluating the market. Bethesda / Chevy Chase continues to lure organi- zations from across the region to Suburban Mary- land, due to its pricing and saturation of amenities and transit options. Yet despite some tightening seen there, overall available space con- tinues to increase in the market and tenants look- ing in Suburban Maryland will still benefit from softer conditions. “Mid-year brings little change to the unprecedented favorability and flexibility seen in office market condi- tions across the Washington metro region. Tenants are taking note, and the region is benefitting from an uptick in activity from key growth sectors including tech and coworking groups. Organi- zations in the market now will benefit from prime con- ditions and favorable terms in both new and existing options.” Tom Fulcher serves as an executive vice presi- dent and co-regional manager at Savills Stud- ley, Inc. 

ey Data from Sav- ills Studley's Q2 2018 – DC Region

Washing- ton DC • Overall ava i l ab i l - i t y h o l d - ing fai r l y f l a t f r om Q1, now at 16.2%, and st i l l up a

Tom Fulcher

staggering 3.7pp from two years ago due to new de- liveries hitting the market. • Over 2.0 msf has deliv- ered so far this year, with

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