Office demand in the Washington DC market picked up over the course of 2017. Lease rates increased, and recent 5-year statistics show growth and stability in the market. Suburban Maryland’s office demand is keeping pace throughout Prince George’s County, Montgomery County, and Anne Arundel County. These markets are all offering attractive lease rates and absorption. New office construction has increased in the DC market, with 2018 construction forecast to outpace other U.S. metro areas. The Prince George’s County Office Market is expected to achieve positive net absorption in 2018 after adding of several new office buildings scheduled to deliver in the fourth quarter. The Washington DC market’s office demand is supported by a vibrant economy and a labor pool of well-diversified government and non-federal employers. Office sales volumes began to rebound in 2017 and are forecast to continue in 2018. Federal government facilities and related leases have contributed to the stability of the market, which gives office investors and landlords confidence.
2017 saw a variety of industrial demand levels – investment sales reached new heights, while leasing slowed for the first time in three years.
The Prince George’s County industrial market experienced an increase in vacancy, going up to 7.6% as opposed to last year’s 6.5%. However, there were two large Class A leases signed in 2017.
Despite the slowdown in leasing activity, industrial demand from investors has been strong. Pricing has reached an all-time high, and scarcity of industrial-zoned land will keep the market tight.
In 2018, we expect to see increased industrial demand in leasing. Additionally, evidence shows sales values for industrial should reach over $150 per square foot.
The 220,800-square-foot Collington lease was Prince George’s County’s largest lease in 2017.
La-Z-Boy leased 220,800 square feet of industrial space at Collington Park in Upper Marlboro, MD. This is a full-building lease. It’s the largest industrial lease completed in Prince George’s County for all of 2017. Delivered in 2016, the building is located at 16101 Queens Court. La-Z-Boy is an international home furnishings company. NAI Michael represented MRP Industrial/AEW in the Collington lease, inked in December 2017.
In total, Lance Schwarz and Peter Burleigh of NAI Michael successfully leased over 400,000 square feet of class A industrial space in Prince George’s County in 2017.
The wave is here! NAI Michael’s new newsletter highlights the latest development and changes in the Route 1 / Route 295 corridor.
Before his passing in 2014, our former county executive Wayne Curry predicted that Prince George’s County was on the way up. He saw changes in business and regulation and construction creating real opportunities nearby and he knew that good things were in store for our county. His predictions are now coming true.
2017 has been a momentous year for development in the Route 1 / Route 295 corridor of Prince George’s County. The Hotel opened in College Park, Metro’s Purple line is under construction, the county’s first Whole Foods opened in Hyattsville, and numerous residential projects are in the pipeline. Additionally, companies like Kaiser Permanente are expanding their footprint within the county with new office space. The newsletter includes more details about these changes, and more.
Prince George’s County office vacancy reduced by over half a million square feet leased in the last six months!
Leasing of vacant space achieves over 357,000 square feet in the first quarter 2017 – the highest quarterly absorption for the last 10 years. Recently signed leases and new leasing activity indicates that Prince George’s County is poised for continued significant growth in office leasing in 2017.
The Washington DC area office market includes the District of Columbia and adjacent suburban submarkets in Maryland and Virginia. The Washington DC area office market consists of about 470 million square feet in 10,051 buildings. Net absorption for the overall Washington Area was positive 2,754,849 square feet for the first quarter 2017. The Washington Area vacancy decreased from 14.6% to 14%.
Prince George’s County office space net absorption of vacant space was positive 357,767 square feet in the first quarter 2017. Annual rental rates for Prince George’s County office space have increased steadily almost every quarter for the last five quarters with the first quarter 2017 rate per square foot of averaging in the mid-twenty dollar range on a full service basis.
By Marcus Daniels and Ed Luckett
The Collective Empowerment Group Economic Empowerment Conference was held on Friday, April 7, 2017 at First Baptist Church of Glenarden at 3600 Brightseat Road in Landover, Maryland.
The Economic Empowerment Conference taught churches how to prepare your ministry to expand, relocate, build spaces and places for the physical houses of worship, share knowledge on identifying property, acquisition and financing of real estate projects, zoning and land use, building and construction, and how technology can be utilized in design and building as well as drawing greater input and buy-in from your members.
Marcus Daniels had moderated a panel discussion on how to prepare your ministry to expand, relocate, build spaces and places for the physical houses of worship. Ed Luckett was a speaker on a panel discussing zoning & land use, building & construction and planning for churches.
Over the course of 2016, office vacancy declined in Prince George’s County and in turn, average quoted rental rates have risen steadily.
It was a year for the Prince George’s County office market. Office vacancy declined steadily every quarter, from 19.2% at the beginning of 2016 to 18.8% by year end. Based on 5-year averages and known construction activity, office vacancy is expected to drop to 17% by the end of 2017. Average full service rental rates increased in 2016, from $20.96 in Q1 to $21.43 in Q4.
A total of 114 office sale transactions were completed in 2016. These transactions totaled 2,597,862 square feet and $168,786,687 in sales volume. Many new owners plan on investing substantial capital into their assets to retain and attract tenants. For leasing, over 153 full service leases were completed, representing 530,820 square feet. One of the largest lease deals of 2016 was with the growing tech-education company, 2U Inc. They are in the process of relocating into 252,950 square feet they leased at 4900 Harkins Road in the Lanham/New Carrollton area.