Repositioned Office Buildings In Urban Core Leasing Faster Than New Construction
A significant portion of the office construction in DC's core market is redevelopment of existing buildings, and CBRE's research finds those buildings leasing at nearly double the pace of new construction.
Of the 431 office buildings totaling 81.5M SF in the CBD and East End, 32 of them, totaling roughly 9M SF, are currently being redeveloped or have plans for repositioning, CBRE found.
The buildings undergoing redevelopment that have been actively leasing have filled 750k SF this year between signed leases and LOIs, more than 32% of the total available space in those buildings.
New office buildings being built on spec, by comparison, have leased at a 17% pace this year, CBRE's DC-region director of research and analysis Revathi Greenwood says.
"These repositioning products are bridging the gap between two market segments, trophy and commodity Class-A," Revathi said. "It is developing into a category in its own right."