REAL ESTATE OUTLOOK SUBURBAN MARYLAND OFFICE MARKET · 2016. 7. 16. · REAL ESTATE OUTLOOK The Suburban Maryland office market had a steady first quarter in 2016, as net absorption

SUBURBAN MARYLAND OFFICE MARKETFIRST QUARTER 2016

REAL ESTATE OUTLOOK

The Suburban Maryland office market had a steady first quarter in 2016, as net absorption registered positive 89,000 SF. The direct vacancy rate remained unchanged at 15.3%, as it was a pre-leased delivery that primarily boosted net absorption this quarter. Although there were a handful of notable lease deals, this gain was offset by tenants vacating space. Asking rents inched up only 0.1% during the first quarter of 2016 to $26.34 PSF.

ECONOMY

Leisure and hospitality sector contributes 24% of total jobs addedPayroll employment increased 28,400 during the 12 months ending January 2016 in Suburban Maryland, which is more than double the 20-year annual average of 13,200. The leisure and hospitality sector contributed 6,900 jobs, well above the 20-year average of 1,800. The professional and business services sector followed with 6,500 jobs and construction with 6,000 jobs.

The Suburban Maryland unemployment rate is 4.5% at December 2015, down from 5.0% one year ago. The unemployment rate is below the 10-year average of 5.7%. This compares to the Washington metro area unemployment rate of 3.8% and the national rate of 4.8% at December 2015.

We expect conditions to remain healthy during 2016 and 2017, as consumer and business confidence strengthens which will continue to fuel the Suburban Maryland economy. Through 2020, we expect job growth to average 16,400. Most of this growth is due to occur through 2018. We expect the health, technology, construction, and food services industries to fuel job growth in the period ahead.

OFFICE VACANCY AND DEMAND

Leasing activity offset slightly by move-outsThe direct vacancy rate in Suburban Maryland is 15.3% at March 2016, unchanged from three months prior. This is well above the 10-year average vacancy rate of 12.6%. The Class A vacancy rate declined 130 basis points to 11.6% at the end of the first quarter.

Office market continues with steady demand in Q1Third consecutive quarter with positive absorption

OFFICE TRENDS

10-YEAR TREND FIRST QUARTER 2016

OVER ALL VACANCY

15.3%Vacancy rate unchanged

ABSORPTION

89,000 SFPositive demand YTD

RENTAL R ATES

$26.34 PSFAsking rents inch up 0.1% YTD

UNDER CONSTRUCTION

305,000 SFConstruction controlled

JOB GROW TH

28,400 jobsDuring 12-months ending January 2016

2 REAL ESTATE OUTLOOK SUBURBAN MARYLAND OFFICE MARKET Q1 2016


Net absorption totaled positive 89,000 SF during the first quarter of 2016. Class A net absorption registered positive 388,000 SF but this was offset by negative 298,000 SF in the Class B/C market. In 2015, net absorption totaled positive 634,000 SF. This compares favorably to the 10-year annual average of positive 114,000 SF.

The Lanham/Landover/Largo submarket was the leader in net absorption during the past three months at positive 201,000 SF due to 2U taking 253,000 SF at 7900 Harkins Road in Lanham. The education technology company will be vacating 68,000 SF at 8201 Corporate Drive in Landover. This is a big win for Prince George’s County, as the company plans to grow into its new space as it adds 900 employees over the next five years.

Despite this notable deal, a handful of tenant move-outs acted as a drag on net absorption. For example, the CDC downsized by 79,000 SF at 3311 Toledo Road in College Park, Access Intelligence vacated 33,000 SF at 4 Choke Cherry Road in North Rockville, and Vencore downsized by 60,000 SF at 14400 Sweitzer Lane in Laurel.

During the first quarter of 2016, the tech sector represented the largest share of leasing activity at 40% of all new or relet deals. This was primarily due to the 2U lease at 7900 Harkins Road. Professional and business services and law firms followed, both at 13%. This was due to a handful of mid-sized deals such as EBA Engineering leasing 35,000 SF at 6100 Chevy Chase Drive in Laurel and Lerch, Early & Brewer taking 41,000 SF at 7600 Wisconsin Avenue in Bethesda/Chevy Chase.

OFFICE SUPPLY AND DEVELOPMENT

Pipeline remains limitedThere was one delivery during the first quarter of 2016. The Foulger-Pratt Companies delivered 156,000 SF at 12435 Park Potomac Avenue in Rockville, which came on-line at 44% pre-leased. The delivery includes tenants such as Smislova Kehnemui & Associates and Foulger-Pratt, both occupying 21,000 SF.

Foulger-Pratt has relocated from 9600 Blackwell Road in North Rockville and Smislova, Kehnemui & Associates has vacated its space at 12505 Park Potomac Avenue in Rockville.

There is 305,000 SF of office space under construction or renovation at March 2016. The pipeline is currently 27% pre-leased, below the 10-year average pre-lease rate of 52%. Frederick County has the greatest amount of space under construction, with two buildings totaling 150,000 SF at 31% pre-leased. Douglas Development Corporation is renovating an old warehouse at 340 E. Patrick Street into a 70,000 SF office building with ground floor retail. The development company is also constructing an 80,000 SF office building at 308 W. Patrick Street that is currently 0% pre-leased. Both projects are expected to deliver in 2016.

UNEMPLOYMENT RATE

PAYROLL JOB GROWTH

SUBURBAN MARYLAND OFFICE NET ABSORPTION AND VACANCY

0%

2%

4%

6%

8%

10%

12%

06 07 08 09 10 11 12 13 14 15*

UNITED STATES WASHINGTON METRO AREA SUBURBAN MARYLAND

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

07 08 09 10 11 12 13 14 15 16*

UNITED STATES WASHINGTON METRO AREA SUBURBAN MARYLAND

4%

6%

8%

10%

12%

14%

16%

18%

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

07 08 09 10 11 12 13 14 15 16*

NET ABSORPTION IN MILLIONS DIRECT VACANCY RATE

*At December 2015SOURCE: Bureau of Labor Statistics, Transwestern.

*12-months ending January 2016SOURCE: Bureau of Labor Statistics, Transwestern.

*At first quarter 2016SOURCE: CoStar, Transwestern.


REAL ESTATE OUTLOOK SUBURBAN MARYLAND OFFICE MARKET Q1 2016 3

New construction could soon be under way in the Bethesda/Chevy Chase submarket. Carr Properties, after announcing late last year that they will take ownership of the Apex Building at 7272 Wisconsin Avenue, has plans to demolish the current structure and replace it with three towers, two residential and one office. The timing of this development needs to match with the Purple Line construction since the site sits atop the existing Capital Crescent Trail tunnel and the location of a planned Bethesda Purple Line station. Groundbreaking for the 16-mile light-rail project is set for late 2016.

OFFICE RENTAL R ATES

Asking rents inch up 0.1% YTD Average asking rents in the Suburban Maryland office market edged up 0.1% during the first quarter of 2016 to $26.34 PSF. Class A office rents averaged $29.27 PSF, while Class B/C rents averaged $24.29 PSF.

Concession packages remained elevated during the first quarter of 2016. For a typical 10-year term on a new lease, tenant improvement allowances averaged $63.00 PSF with 11 months of free rent outside of the lease term. This is similar to $65.00 PSF in tenant improvement allowances with 11.5 months of free rent during 2015.

OFFICE INVESTMENT MARKET

Moderate sales activity in the first quarterInvestment sales totaled $66 million or $122 PSF in the first quarter of 2016. In 2015, investment sales totaled $710 million or $179 PSF during 2015. Not surprisingly, 83% of the total capital YTD was focused on assets located in highly walkable neighborhoods with access to transportation, retail, and other amenities. Notably, Hines acquired 11400 Rockville Pike and 5515 Security Lane in the North Bethesda submarket for $54.6 million, or $158 PSF during the first quarter.

SUBURBAN MARYLAND OFFICE ASKING RENTAL RATES

SUBURBAN MARYLAND OFFICE DEVELOPMENT PIPELINE MILLION SF

$15

$20

$25

$30

$35

$40

07 08 09 10 11 12 13 14 15 16*

CLASS A CLASS B/C

0.0

0.5

1.0

1.5

2.0

2.5

07 08 09 10 11 12 13 14 15 16*

COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE



4 REAL ESTATE OUTLOOK SUBURBAN MARYLAND OFFICE MARKET Q1 2016


OFFICE MARKET OUTLOOK

Market conditions to strengthen gradually We expect market conditions to improve at a gradual pace over the next several years. The vacancy rate should decline to the mid-14% range by year-end 2017. We expect asking rents to gain greater traction during the latter part of 2016 into 2017. We expect the overall vacancy rate to decline on average 70 basis points per year through year-end 2017. This compares to a 100 basis point decline per year during the past two recovery periods.

Although we expect leasing activity to pick up and vacancy to edge down in the period ahead, both will remain muted compared to past recovery cycles. As a result, the market will remain in tenant favor in the near-term. Select submarkets with a relatively low vacancy rate, controlled pipeline and no significant move-outs on the horizon are poised to recover first.

We expect asking rents to rise 0.5% to 1.0% during 2016. The vacancy rate is elevated, which will keep pressure on the rental rate. We expect concession packages to remain elevated during 2016. The exception is top tier space, given rising demand and limited availability for this asset class.

Overall, the Suburban Maryland office market has historically been a consistent performer and should experience steady growth in the long run. n

Suburban Maryland Office Market Indicators

SUBMARKET INVENTORYUNDER

CONSTRUCTIONQ1 NET

ABSORPTIONYTD NET

ABSORPTIONDIRECT

VACANCYSUBLEASE

SPACETOTAL

VACANCYAVERAGERATE PSF

Bethesda/Chevy Chase 11,654,099 0 35,000 35,000 8.5% 0.8% 9.3% $38.23

North Bethesda 10,765,098 0 32,000 32,000 21.1% 0.3% 21.4% $29.13

Rockville 8,379,781 103,550 54,000 54,000 12.9% 0.2% 13.1% $29.47

North Rockville 12,448,549 0 (71,000) (71,000) 14.8% 1.6% 16.4% $26.16

Gaithersburg 6,779,461 0 (169,000) (169,000) 12.4% 0.6% 13.0% $22.35

Germantown 2,730,085 0 16,000 16,000 16.5% 0.8% 17.3% $24.53

Kensington/Wheaton 1,406,234 0 3,000 3,000 27.0% 0.0% 27.0% $23.70

Silver Spring 6,832,266 16,806 34,000 34,000 8.2% 0.4% 8.6% $26.69

North Silver Spring/Rt. 29 3,492,988 0 31,000 31,000 10.6% 0.4% 11.0% $23.90

Montgomery County Total 64,488,561 120,356 (35,000) (35,000) 13.6% 0.7% 14.3% $28.10

Beltsville/Calv./Coll. Park 6,135,212 0 (80,000) (80,000) 21.5% 0.3% 21.8% $20.71

Laurel 2,579,823 0 (28,000) (28,000) 12.5% 0.6% 13.1% $18.95

Greenbelt 3,016,041 0 (3,000) (3,000) 30.6% 0.0% 30.6% $21.81

Lanham/Landover/Largo 4,910,778 34,089 201,000 201,000 24.4% 0.4% 24.8% $20.21

Bowie/Marlboro/South P.G. 4,982,613 0 20,000 20,000 12.0% 0.6% 12.6% $22.00

Prince George's County Total 21,624,467 34,089 110,000 110,000 20.2% 0.4% 20.6% $20.85

Frederick County 6,810,541 150,281 14,000 14,000 15.1% 0.1% 15.2% $21.69

Total 92,923,569 304,726 89,000 89,000 15.3% 0.6% 15.8% $26.34

SOURCE: CoStar, Transwestern.

Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

T 301.571.0900 www.transwestern.com

6700 Rockledge Drive, Suite 500ABethesda, Maryland 20817


Ben FishResearch Associate | Mid-Atlantic [email protected]

METHODOLOGY

The information in this report is the result of a compilation of information on office properties located in Suburban Maryland. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency.

CONTACT

Elizabeth NortonManaging Research Director | Mid-Atlantic [email protected]

Suburban Maryland Office Market Indicators

PROPERTY CLASS INVENTORYUNDER

CONSTRUCTIONQ1 NET

ABSORPTIONYTD

ABSORPTIONDIRECT

VACANCYSUBLEASE

SPACEOVERALL


Class A 20,313,992 183,938 388,000 388,000 11.6% 0.8% 12.5% $29.27

Class B/C 72,609,577 120,788 (298,000) (298,000) 16.3% 0.5% 16.8% $24.29

Total 92,923,569 304,726 89,000 89,000 15.3% 0.6% 15.8% $26.34

SOURCE: CoStar, Transwestern.

Suburban Maryland Office Market Notable Lease Transactions

TENANT DEAL TYPE ADDRESS SUBMARKET SQUARE FEET

2U New Lease 7900 Harkins Road Lanham/Landover/Largo 253,000

FDA Renewal 7500 Standish Place North Rockville 114,000

FDA Renewal 1451 Rockville Pike Rockville 45,000

NORC Renewal 4350 East West Highway Bethesda/Chevy Chase 42,000

Lerch, Early & Brewer New Lease 7600 Wisconsin Avenue Bethesda/Chevy Chase 41,000

Inteleos, Inc. New Lease 1401 Rockville Pike Rockville 36,000

EBA Engineering New Lease 6100 Chevy Chase Drive Laurel 35,000

SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern.

Suburban Maryland Office Market Construction Activity

SUBMARKET SQUARE FEET UNDER CONSTRUCTION/RENOVATION PERCENT PRE-LEASED

Rockville 103,550 0%

Silver Spring 16,806 5%

Lanham/Landover/Largo 34,089 100%

Frederick County 150,281 31%

Total 304,726 27%

SOURCE: CoStar, Transwestern

Flex/industrial market strong during Q1 Healthy leasing activity lowers the vacancy rate and boosts net absorption

The Suburban Maryland flex/industrial market had a strong first quarter of 2016. Net absorption totaled positive 806,000 SF and the direct vacancy rate decreased by 10 basis points to 8.5%. Asking rents edged up 0.7% during the past three months to $7.93 PSF. The construction pipeline expanded to 1.2 million SF at March 2016 as tenants are demanding newer space with efficient layouts and adequate ceiling heights and developers are meeting this demand.

ECONOMY

Leisure and hospitality sector contributes 24% of total jobs addedPayroll employment increased 28,400 during the 12 months ending January 2016 in Suburban Maryland, which is more than double the 20-year annual average of 13,200. The leisure and hospitality sector contributed 6,900 jobs, well above the 20-year average of 1,800. The professional and business services sector followed with 6,500 jobs and construction with 6,000 jobs.

The Suburban Maryland unemployment rate is 4.5% at December 2015, down from 5.0% one year ago. The unemployment rate is below the 10-year average of 5.7%. This compares to the Washington metro area unemployment rate of 3.8% and the national rate of 4.8% at December 2015.

We expect conditions to remain healthy during 2016 and 2017, as consumer and business confidence strengthens which will continue to fuel the Suburban Maryland economy. Through 2020, we expect job growth to average 16,400. Most of this growth is due to occur through 2018. We expect the health, technology, construction, and food services industries to fuel job growth in the period ahead.

FLEX/INDUSTRIAL TRENDS

10-YEAR TREND FIRST QUARTER 2016

OVER ALL VACANCY

8.5%Vacancy down YTD

ABSORPTION

806,000 SFStrong demand YTD

RENTAL R ATES

$7.93 PSFAsking rents up YTD

UNDER CONSTRUCTION

1.2 Million SFExpanding pipeline

JOB GROW TH

28,400 jobsDuring 12-months ending January 2016

SUBURBAN MARYLAND FLEX/INDUSTRIAL MARKETFIRST QUARTER 2016

REAL ESTATE OUTLOOK

2 REAL ESTATE OUTLOOK SUBURBAN MARYLAND FLEX/INDUSTRIAL MARKET Q1 2016


SUBURBAN MARYLAND FLEX/INDUSTRIAL NET ABSORPTION AND VACANCY

SUBURBAN MARYLAND FLEX/INDUSTRIAL ASKING RENTAL RATES

SUBURBAN MARYLAND FLEX/INDUSTRIAL DEVELOPMENT PIPELINE MILLION SF

4%

5%

6%

7%

8%

9%

10%

11%

12%

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

07 08 09 10 11 12 13 14 15 16*

NET ABSORPTION IN MILLIONS DIRECT VACANCY RATE

$0

$2

$4

$6

$8

$10

$12

$14

07 08 09 10 11 12 13 14 15 16*

BULK WAREHOUSE FLEX/WAREHOUSE FLEX/R&D

0.0

0.5

1.0

1.5

2.0

2.5

07 08 09 10 11 12 13 14 15 16*

COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE




FLEX /INDUSTRIAL VACANCY AND DEMAND

Strong demand and continued growth during Q1The direct vacancy rate was 8.5% at March 2016, down from 8.6% at December 2015. This compares favorably to the 10-year average of 9.9%.

Net absorption totaled 806,000 SF during the first quarter of 2016. In 2015, net absorption totaled 1.3 million SF, which is significantly higher than the 10-year annual absorption average of 430,000 SF.

Frederick County experienced the strongest net absorption at 666,000 SF during the past three months. This was due to the 600,000 SF delivery at 5151 Intercoastal Court where Costco fully leased a distribution warehouse. Frederick County also had several large lease deals such as Carey Limousine signing a deal for just shy of 50,000 SF at 7445 New Technology Way and Vivint Solar leasing 32,000 SF at 6900 English Muffin Way. The largest deal of the quarter was signed by Siemens for 76,000 SF at 6435 Virginia Manor Road in Prince George’s County.

Suburban Maryland net absorption was offset slightly by a handful of move-outs. For example, in Prince George’s County the Federal Aviation Administration moved out of 143,000 SF at 10201 Good Luck Road and Kane Office Movers vacated 100,000 SF at 3636 Pennsy Drive.

FLEX /INDUSTRIAL SUPPLY AND DEVELOPMENT

Pipeline expands and is well pre-leased Four buildings delivered during the first quarter of 2016, totaling 800,000 SF at 79% leased. In addition to the Costco warehouse delivery, Menard Doswell & Company delivered three buildings totaling 200,000 SF at 8787, 8791, and 8797 Snouffer School Road in Montgomery County. The projects came on-line averaging 14% leased. Goodman Distribution was the largest tenant taking 28,000 SF at 8797 Snouffer School Road.

REAL ESTATE OUTLOOK SUBURBAN MARYLAND FLEX/INDUSTRIAL MARKET Q1 2016 3


Projects under construction or renovation in the Suburban Maryland flex/industrial market totaled 1.2 million SF at March 2016, up slightly from 1.1 million SF three months ago. The pipeline is well pre-leased at 48%. Although most of the construction is concentrated in Prince George’s County, Matan Companies recently started construction on two buildings on New Design Road & English Muffin Way in Frederick County totaling 181,000 SF at 83% pre-leased. They are both expected to deliver by late summer 2016.

FLEX /INDUSTRIAL RENTAL R ATES

Rents up 0.7% YTD Flex/industrial asking rents averaged $7.93 PSF at March 2016, a 0.7% increase since year-end 2015. Frederick County experienced the greatest rise in rents at 1.3%, followed by Prince George’s County at 0.8% during the past three months. Asking rents in Montgomery County remained relatively flat during the first quarter, rising only 0.1%.

FLEX /INDUSTRIAL INVESTMENT MARKET

Activity sluggish in Q1 There were two notable investment sales in the first three months of 2016 totaling just over $13 million, or $129 PSF. GDC MD, LLC purchased 10000 Aerospace Road in Montgomery County for $8.6 million, or $125 PSF and SJS Realty Management purchased 15700 Crabbs Branch Way in Montgomery County for $4.4 million, or $139 PSF. Investment sales totaled $188 million or $82 PSF during 2015.

FLEX /INDUSTRIAL MARKET OUTLOOK

Conditions to remain healthy We expect the Suburban Maryland flex/industrial market to gain traction during the balance of 2016, as demand gains momentum pushing the vacancy rate down and asking rates up. We project the overall vacancy rate to decline to the low-8% range by December 2016. We anticipate demand to outpace new supply during this period. As demand gains traction, so will asking rents, rising 1.5% to 2.0% during 2016.

Although the current pipeline is controlled, it could expand over the next 24 months as tenants are seeking newer product with efficient layouts and adequate truck court depths. We expect investment activity will pick up over the next 12 months as investors seek assets in a market well positioned to capture the growing demand for product in the Washington/Baltimore Corridor.

4 REAL ESTATE OUTLOOK SUBURBAN MARYLAND FLEX/INDUSTRIAL MARKET Q1 2016


Suburban Maryland Flex/Industrial Market Indicators

SUBMARKET INVENTORYUNDER

CONSTRUCTIONQ1 NET

ABSORPTIONYTD

ABSORPTIONDIRECT

VACANCYSUBLEASE

SPACETOTAL


Bulk Warehouse 18,289,152 892,490 128,000 128,000 10.1% 0.7% 10.8% $6.43

Flex/Warehouse 35,487,492 100,000 11,000 11,000 7.9% 0.1% 8.0% $6.85

Flex/R&D 2,425,715 0 (27,000) (27,000) 14.6% 0.2% 14.8% $9.60

Prince George's County Total 56,202,359 992,490 112,000 112,000 8.9% 0.3% 9.2% $6.83

Bulk Warehouse 2,602,549 0 25,000 25,000 10.4% 0.0% 10.4% $10.60

Flex/Warehouse 15,423,425 0 (19,000) (19,000) 7.7% 0.0% 7.7% $11.05

Flex/R&D 4,357,858 0 22,000 22,000 8.5% 0.1% 8.6% $12.36

Montgomery County Total 22,383,832 0 28,000 28,000 8.2% 0.0% 8.2% $11.25

Bulk Warehouse 5,172,699 180,685 36,000 36,000 5.5% 0.0% 5.5% $5.19

Flex/Warehouse 9,687,875 0 555,000 555,000 7.7% 0.1% 7.8% $7.60

Flex/R&D 1,775,242 0 75,000 75,000 15.1% 0.6% 15.7% $10.57

Frederick County Total 16,635,816 180,685 666,000 666,000 7.8% 0.1% 7.9% $7.17

Bulk Warehouse 26,064,400 1,073,175 189,000 189,000 9.2% 0.5% 9.7% $6.60

Flex/Warehouse 60,598,792 100,000 547,000 547,000 7.8% 0.1% 7.9% $8.04

Flex/R&D 8,558,815 0 70,000 70,000 11.6% 0.2% 11.8% $11.21

Suburban Maryland Total 95,222,007 1,173,175 806,000 806,000 8.5% 0.2% 8.7% $7.93 Note: Totals might not add due to rounding. SOURCE: CoStar, Transwestern

Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.


T 301.571.0900 www.transwestern.com

6700 Rockledge Drive, Suite 500ABethesda, Maryland 20817

Suburban Maryland Flex/Industrial Market Construction Activity

SUBMARKET SQUARE FEET UNDER CONSTRUCTION/RENOVATION PERCENT PRE-LEASED

Prince George's County 992,490 42%

Frederick County 180,685 83%

Total 1,173,175 48%


Suburban Maryland Flex/Industrial Market Indicators

PROPERTY TYPE INVENTORYUNDER

CONSTRUCTIONQ1 NET

ABSORPTIONYTD

ABSORPTIONDIRECT

VACANCYSUBLEASE

SPACEOVERALL


Bulk Warehouse 26,064,400 1,073,175 189,000 189,000 9.2% 0.5% 9.7% $6.60

Flex/Warehouse 60,598,792 100,000 547,000 547,000 7.8% 0.1% 7.9% $8.04

Flex/R&D 8,558,815 0 70,000 70,000 11.6% 0.2% 11.8% $11.21

Total 95,222,007 1,173,175 806,000 806,000 8.5% 0.2% 8.7% $7.93


Suburban Maryland Flex/Industrial Market Notable Lease Transactions

TENANT DEAL TYPE ADDRESS SUBMARKET SQUARE FEET

Safeway Renewal 6300 Columbia Park Road Prince George's County 136,000

Siemens New Lease 6435 Virginia Manor Road Prince George's County 76,000

GSA - FDA Renewal 16071 Industrial Drive Montgomery County 54,000

Carey Limousine New Lease 7445 New Technology Way Frederick County 50,000

US Express Renewal 3200 Hubbard Road Prince George's County 43,000

Sensors for Medicine & Science New Lease 20439-20453 Seneca Meadows Parkway Montgomery County 33,000

Meso Scale New Lease 9120-9128 Gaither Road Montgomery County 33,000

SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern

Ben FishResearch Associate | Mid-Atlantic [email protected]

METHODOLOGY

The information in this report is the result of a compilation of information on flex/industrial properties located in Suburban Maryland. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency.

CONTACT

Elizabeth NortonManaging Research Director | Mid-Atlantic [email protected]

Documents

REAL ESTATE OUTLOOK SUBURBAN MARYLAND OFFICE MARKET · 2016. 7. 16. · REAL ESTATE OUTLOOK The Suburban Maryland office market had a steady first quarter in 2016, as net absorption