Sneak Peek: Q2's Big Rent Spike
CBRE is just about to roll out its Q2 numbers, and we got a sneak peek at the figures. (This excites us more than any leaked movie trailer or baseball trade.) Landlords aren't going down in the tenant's market without a fight.
CBRE tenant rep group chief Joe Wallace (here with daughters May and Sara at a Nats game) told us this morning that there was a $2/SF spike in Class-A downtown DC asking rents from Q1 to Q2. Landlords are looking to capitalize on meaningful investments (from fitness centers to bike storage to new conference facilities) made to attract tenants, though there's not much evident demand in the marketplace. The price increase could be in anticipation of more tenants exploring space options soon, Joe says, with owners looking to absorb the action. "Landlords are sensing more activity and are trying to get ahead of that."
Tenants may be sensing a change, too, and may seek to take advantage before rents go up even more, Joe says. The number of tenants in the market with requirements of 10k SF-plus has increased 30% year-over-year, he adds, as groups look to grab the robust concession packages still available. One group to watch, Joe tells us, is the nonprofit sector; in a recent national survey of CBRE's nonprofit clients, 44% anticipated expanding real estate needs. The National Trust for Historic Preservation led the trend when it went from owned space to a new lease at the Watergate office building (pictured), where it moved in earlier this year.