The end of the year brought with it a surge in large block leasing activity as the volume of deals signed over 20k SF dwarfed the previous quarter's activity and increased by 69.8%.
The District led the way in Q4 by accounting for 47.1% of all regional large block leasing activity, according to JLL. NoVa trended upwards and claimed a 43.5% share, while Suburban Maryland remained slow by accounting for 9.3% of deals over 20k SF.
The region as a whole saw positive net absorption for the first time since 2010, eating up 1.2M SF of office space. The uptick is expected to grow the next two years as the job market improves and the federal government catches up on its leasing backlog.
For the quarter, nine of the 10 largest leases were renewals, half of which were signed by government-related entities. Vacancy rates across the region continue to diverge, with areas such as Capitol Hill, Georgetown, CBD and Southeast under 11%, while Rock Spring Park, Skyline and Prince George’s County remain near all-time highs.
JLL’s report also shows that NoVa has surpassed the District in terms of new construction activity, with 60% of office inventory under construction in the region occurring in NoVa, compared to 36% in the District. 56.5% of office inventory under construction in the pipeline is pre-leased, the highest mark since 2010’s 71%.
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