Three Takeaways from Q1
We caught up with Stream Realty Partners' Kyle Luby (snapped this morning) on Q1 happenings. What he saw:
1) Rightsizing continues.
He tells us that while a few big leasing deals did go down in Q1, a large block of space became available as a result. Stream tracked a 1.5% increase in available space in Q1 in the East End, thanks to the National Labor Relations Board's announced move to Capitol Riverfront, and Millennium Challenge Corp and Futures Group both giving back space as part of new deals.
2) Sublease space stretches on.
Sublease space still accounts for a big piece of the DC leasing pie; Stream says it makes up 11% of DC's total available inventory. And that's especially true in the CBD and East End, where there's a combined 1.6M SF of sublease space on the market. (Like a fortune cookie in Chinatown, sublease space is about putting something nice inside something else.) But it's a downward trend, Kyle says; sublease space has decreased in each of the last three quarters.
3) Investment sales stay hot.
Investors still can't get enough of DC office buildings, as Kyle tells us just under $1.8B in investment sales closed in Q1. (Here's 1401 K, which First Potomac scooped up for $58M a few weeks ago.) The foreign investment spree continued, too, as 60% of the quarter's total deal volume included foreign capital. But few projects are being actively marketed as we enter Q2, he tells us, setting the stage for a potentially quiet next few months. Kudos to Kyle, who's tying up some loose ends before heading to Jacksonville for his wedding next weekend.