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Market Report

Washington, DC | 3rd Quarter 2015

cushmanwakefield.com

Contents

DC Metropolitan Area Oveview................................................................................3


Washington, DC & Map..........................................................................................4-6
East End........................... .................................................................................................7
CBD....................................................................................................................................8
West End/Georgetown...............................................................................................9
Capitol Hill/NoMa........................................................................................................10
Southwest/Capitol Riverfront/Southeast............................................................11
Uptown..............................................................................................................................12
Appendix..........................................................................................................................13
Tables..........................................................................................................................13-22
Methodology & Definitions......................................................................................23
About Cushman & Wakefield.................................................................................24

Cushman & Wakefield | 2

Washington, DC Metropolitan Area

Necessary fiscal clarity coming from the federal government


added to the growing optimism throughout the region. After
nearly six years without a budget, the feds stepped up in
late 2014 with a one year budget that increased spending for
key federal agencies including the Department of Defense
and vital agencies within the Health and Human Services
Department. The passage of this budget was an inflection
point that reversed the tide of negative office-using job
growth of 2014 and led to the robust job growth that we are
currently experiencing. As of the end of the third quarter
of 2015, a follow-on two year budget has been passed that
will offer the regions largest employers a roadmap of fiscal
policy for the near term. This increases federal budget
authority by $80 billion over the caps imposed by budget
sequestration that initially hit the market in 2013. This
additional spending will be evenly split between defense and
domestic programs and will avert a debt ceiling debate and
government shutdown through September 2017. As was the
case with the budget that passed in late 2014, this two year
bill will offer fiscal clarity that will give the regions largest
employers the ability to make sound business decisions
including the acquisition of talent and the procurement of
real estate.
The regional vacancy rate for the office sector ticked
downward from 16.1% to 16.0% in the third quarter. This is
the second consecutive quarter of falling vacancy that has
followed 15 straight quarters of flat or rising vacancy. Net
absorption for quarter stands at 459,158 square feet (sf) which
brings the year-to-date total to 1.095 million sf. 5.3 million sf
is currently under construction. New and repositioned office
product continues to outperform the market as a whole
and the possibility of speculative construction in various
submarkets remains a possibility. Tenant concessions in
the marketplace remain at a highpoint. Look to when these
concessions start to tick down as the sign that leverage is
shifting back to the landlords favor.

Economic Indicators
Q3 14

Q3 15

DC Metro Employment

3.12M

3.18M

DC Metro Unemployment

4.9%

4.4%

U.S. Unemployment

6.1%

5.3%

Q3 14

Q3 15

Overall Vacancy

15.9%

16.0%

Net Absorption

-590k

460k

Under Construction

4.5M

5.3M

Deliveries

865k

1.2M

$35.83

$35.03

12-Month
Forecast

Market Indicators

Average Asking Rent (FS)

12-Month
Forecast

Net Absorption/Asking Rent


4Q TRAILING AVERAGE
2.0

$38.00
$37.00

1.0

$36.00
$35.00

0.0

$34.00
$33.00

-1.0

2010

2011

2012

2013

2014

Net Absorption, MSF

2015

$32.00

Asking Rent, $ PSF

Washington, DC Metropolitan Area


NET ABSORPTION - DELIVERIES - VACANCY

12
16%

10
8

12%

6
4

8%

2
0

Vacancy Rate

The Washington, D.C. Metropolitan regions economic


comeback has continued through the third quarter of 2015.
The unemployment rate has consistently declined, falling
to 4.4% in the third quarter compared to 4.9% in the third
quarter of 2014. Job growth throughout the region also
continues to be robust with 62,800 more jobs in September
of 2015, year-over-year, and easily exceeds the ten year
average of 35,000 jobs. Office-using employment has
added 20,800 jobs with the high-paying Professional and
Business Service sector leading the way with 20,500 new
positions.

WASHINGTON, DC METRO

MSF

Two Years of Clarity Ahead for the


Washington, D.C. Metropolitan Region

4%

-2
-4

05

06

07

08

Net Absorption

09

10

11

Deliveries

12

13

14

Vacancy Rate

YTD
15

0%

cushmanwakefield.com | 3

Washington, DC

Market Overview

The District of Columbia experienced its second consecutive


quarter of stronger growth as the third quarter registered 269,000
sf of positive net absorption. Year-to-date absorption reached
519,000 square feet (sf), well outpacing the negative 489,000 sf
of net absorption seen in 2014. Still, despite positive momentum,
the District saw a 0.1 percentage point increase in vacancy quarterover-quarter from 11.0% to 11.1% due to an increase in the overall
inventory with the delivery of 601 Massachusetts Avenue, NW,
coupled with lead tenant, Arnold & Porters downsizing from its
previous location in to the new, highly efficient building.
While the East End has recently experienced increased competition
from surrounding submarkets as new developments in the Central
Business District (CBD) have lured private-sector tenants away
and the federal government continues to push agencies into lower
cost alternatives, it did still witness positive momentum in the
third quarter. The East End was home to the two largest leases
of the quarter. The Advisory Board Company signed a 500,000 sf
prelease at Douglas Developments 655 New York Avenue, NW and
the Department of Justice signed a 520,180 sf short-term renewal
at 601 D Street, NW, bumping their expiration out three years. This
resulted in 88,000 sf of positive absorption for the quarter.
The CBD was subject to its first quarter of negative absorption
in over a year, largely the result of law firm Dickstein Shapiros
downsizing of 150,000 sf in their recent renewal. Despite this,
fundamentals in the CBD have remained solid thus far in 2015. After
breaking below 10% vacancy for the first time since the downturn
in the second quarter, the submarket continued to tighten to 9.6%
overall vacancy. Of note in the CBD, Deutsche Asset & Wealth
Management is moving forward with their redevelopment of
1800 K Street, NW. The newly LEED-certified building is going
to go through a complete rehabilitation of the existing structure
with a new HVAC system, lobby, elevators, and faade. The new
construction currently has asking rents set at $46.00 - $48.00
NNN per square foot and is expected to deliver in the first quarter
of 2016.
The lone third quarter delivery in the District was 601 Massachusetts
Avenue, NW in the East End. Arnold & Porter will occupy nearly
373,000 sf of the new building.

Market Indicators
Q3 14

Q3 15

Overall Vacancy

11.5%

11.1%

Net Absorption

(256K)

269K

2.1M

2.8M

Under Construction
Deliveries
Average Asking Rent

12-Month
Forecast

400K

473K

$50.19

$50.37

Gross Leasing Activity


District of Columbia, Square Feet per Year
14
11.7

12
10
Millions

The Washington, D.C. Metropolitan regional economy continued to


gain momentum in the third quarter of 2015. The unemployment
rate for the region stood at 4.4% as of September 2015, with yearover-year total nonfarm job growth totaling 62,800 positions. It is
evident that the region will handily surpass the historical average
employment creation of 30,000 net new jobs annually. This above
average growth that was experienced throughout the region was
also seen in the District of Columbia proper (The District or D.C.) as
the Districts unemployment rate fell to 6.7% at the end of the third
quarter of 2015 its lowest since September of 2008. A total of
10,300 new jobs were added in September 2015 compared to the
previous year well over the 8,500 annual jobs that are typical in
D.C., with 3,200 of these jobs in the office-using Professional and
Business Services sector (PBS). Included within the PBS sectors
impressive showing in D.C. is strong growth in technical services and
administrative roles as well as 600 positions in the legal sector yearover-year.

10.5

9.6

8.7

7.6

10.1
8.5

9.6

10.7

10.1
8.4

8.4

7.8

7.8

7.7

6.6

6
4
2
0

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

CBD

East End

West End/Georgetown

Capitol Hill/NoMa

Southwest/Southeast

Uptown

Q3
15

Overall Vacancy Rate


12.0%
11.5%
11.0%

Historical Average = 10.8%

10.5%
10.0%
9.5%
9.0%

2010

2011

2012

2013

2014

2015

Large Blocks of Contiguous Space


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
East End
CBD
District of Columbia

Economy

West End
Capitol Hill
NoMA
Southwest
Capitol Riverfront
Uptown
50-100k SF

100-150k SF

150-200K SF

200K+ SF

Cushman & Wakefield | 4

Washington, DCDC
Submarkets
Washington,
Submarkets
NORTHEAST

UPTOWN

WEST END/
GEORGETOWN

50

CBD

EAST END

NOMA

29

CAPITOL HILL
66

50

395

DI

ST
R

395

IC

SOUTHWEST

TO

VIR F
GI CO
L
NI
A UM

BI
A

395

395

CAPITOL RIVERFRONT/
SOUTHWEST
295

cushmanwakefield.com | 5

Top Transactions
Key Lease Transactions 3Q 15
PROPERTY

SF

TENANT

TRANSACTION TYPE

SUBMARKET

601 D Street, NW

520,180

GSA - Department of Justice

Renewal

East End

655 New York Avenue, NW

500,000

The Advisory Board Company

Prelease

East End

1825 Eye Street, NW

200,000

Dickstein Shapiro

Renewal and Contraction

CBD

1250 Maryland Avenue, SW

164,700

CareFirst BlueCross BlueShield

Renewal

Southwest

1400 L Street, NW

137,700

GSA - Immigration & Customs Enforcement

Renewal

East End

1201 Eye Street, NW

101,900

International Food Policy Research Institute

Relet

East End

800 Maine Avenue, SW

63,000

American Psychiatric Association

Prelease

Southwest

1200 19th Street, NW

62,700

Cozen O'Connor

Sublet

CBD

Key Sales Transactions 3Q 15


SF

SELLER/BUYER

PRICE

SUBMARKET

500 8th Street, NW

325,426

Boston Properties / Prudential

$318,000,000

East End

1152 15th Street, NW

393,815

UBS / Carr Properties

$238,000,000

East End

1401 Eye Street, NW

227,845

Shorenstein Properties / Blackrock

$184,000,000

East End

1750 Pennsylvania Avenue, NW

281,560

Vornado Charles E Smith / John Hancock

$182,000,000

CBD

Washington, DC Office Market

Washington, DC Office Market

Net Absorption - Deliveries - Vacancy, Third Quarter 2015


16%
12%

8%

1
-1

4%

05

06

07

08

Net Absorption

09

10

11

Deliveries

12

13

14

Vacancy Rate

YTD
15

0%

45

15%

40

14%

35

13%
12%

30

11%

25

MSF

Vacancy Rate

MSF

Inventory by Class, Third Quarter 2015

10%

20

9%

15

8%

10

7%

5
0

Vacancy Rate

PROPERTY

6%
CBD

Class A

East End

Class B

West End/ Capitol Hill/


Georgetown
NoMa

Class C

Southwest/
Southeast

Vacancy %

Uptown

5%

DC Overall Vacancy

Cushman & Wakefield | 6

East End
Vacancy
12.3%

Net Absorption

Under Construction

88,300 SF

460,000 SF

Throughout the third quarter 2015, East End continued


to experience improving market fundamentals. Despite
the vacancy rate experiencing a year-over-year uptick of
1.3 percentage points (pp), closing the third quarter 2015
at 12.3%, future blocks of space marketed for availability
declined by nearly 600,000 square feet (sf). The largest
contributor to the decline was the International Food
Policy Research Institute, which signed a lease for 101,937
sf at 1201 Eye Street, NW, and will backfill the National Park
Services space once the agency vacates.

2.0

Outlook

Though the vacancy rate remains above prerecession levels, the broadening mix of leasing
activity from consulting firms, associations and
non-profits, technology companies, and other
private-sector tenants that remain in growthmode, will help to chip away at lingering large
blocks of availability, proving that the District is
becoming more than just a government town.
Though the East End will continue to experience
competition from the CBD, particularly as more
landlords look to kick off their redevelopments,
the East Ends rich amenity base and proximity
to Capitol Hill will certainly continue to cater
to government affairs groups that value quick
access to the seat of government.

16%

1.5

12%

1.0
0.5

8%

0.0

4%

-0.5
-1.0

05

06

07

08

09

Net Absorption

10

11

Deliveries

12

13

14

Vacancy Rate

YTD
2015

0%

Vacant and Available Space


9
8
7

4.3

MSF

6
5
4

1.5

2.6

3.7

4.1

3.5

Q4 11

Q4 12

Q4 13

1.9

1.5

3.6

Q4 10

3
2
1
0

Vacant

4.2

Q4 14

3.2

5.0

Q3 15

Marketed Available (not yet vacant)

Asking Rent
$65
$60
Full Service PSF

The largest lease of the quarter was signed by the Advisory


Board Company, which signed a 16-year, 500,000 sf
prelease at Douglas Developments proposed 655 New
York Avenue, NW site. The firms future relocation from the
West End submarket will allow the company to consolidate
its office functions into one building. It will also allow for
the growth of at least 1,000 new jobs in the District, per
the incentive package that Advisory Board Company is set
to receive from the city.

$54.92 FS

478,900 SF

Net Absorption Deliveries Vacancy

Tenant demand for quality and efficient space has


remained high, particularly for new construction, which
closed the third quarter 2015 at over 88% leased. The only
new delivery of the quarter, 601 Massachusetts Avenue,
NW, delivered 79.0% preleased to the law firm Arnold &
Porter, which took 373,000 sf.
Overall, class A direct asking rents closed at $57.89 full
service, per square foot (psf), a $0.30 increase since
third quarter 2014. Net effective rents have continued to
remain nearly flat as concession packages still remain at
peak levels; averaging $99.00 psf for tenant improvement
allowance and 12-months rent abatement on new, long
term, class A leases allowing many tenants to justify
relocation costs. As a result, relocations continued to
dominate third quarter 2015 leasing activity, accounting
for 59.5% of total leasing.

Asking Rent

Deliveries

Vacancy Rate

*Arrows = Current Qtr Trend

MSF

Market Indicators

$55
$50
$45
$40
$35

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

cushmanwakefield.com | 7

Central Business District


*Arrows = Current Qtr Trend

Vacancy
9.6%

Net Absorption

Under Construction

Deliveries

Asking Rent

(59,000) SF

608,000 SF

0 SF

$50.40 FS

Washington, D.C.s Central Business District submarket


(CBD) is considered one of the premier submarkets in
the United States and is currently the best performing
submarket in the District of Columbia. The vacancy rate
for the CBD ended the third quarter of 2015 at 9.6%,
handily outperforming the 11.1% vacancy for the District of
Columbia market as a whole. Net absorption has totaled
1.7 million square feet since 2010. As the submarket
continues to offer unparalleled location and discounted
rents compared to its downtown counterpart the East
End expect vacancy to remain competitive and continue
to see a dropping vacancy rate in the near future.

Net Absorption Deliveries Vacancy


1.50

14.0%

1.25

12.0%

1.00

10.0%

0.75
MSF

Market Indicators

8.0%

0.50

6.0%

0.25

4.0%

0.00

2.0%

-0.25
-0.50

05

06

07

08

09

10

Net Absorption

Looking forward, prospects for the CBD submarket


remain rosy. The scarcity of land in this core submarket
ensures that new development options will be limited to
the redevelopment of existing properties which will keep
the net new supply of inventory in balance with demand.
This, coupled with the fact that there are only 10 blocks of
existing space able to accommodate a user greater than
50,000 square feet in the CBD through 2017 and none
over 150,000 square feet, will cause the CBD submarket
to tighten further.

12

Deliveries

13

0.0%
YTD
2015
Vacancy Rate
14

Vacant and Available Space


8
7
6

1.9

1.9

5
MSF

The CBD attracts institutional investment from around the


globe. Through the third quarter of 2015, the submarket
has attracted $1.3 billion in total investment in the office
sector and historic pricing averaging $655 per square foot.
64% of the sales volume came from overseas sources.
Cap rates in the submarket have averaged 5.16% across all
transaction and property types in 2015.

11

1.6

1.7

2.0
1.5

4
3
2

4.8

4.8

4.8

4.6

4.2

3.7

Q4 10

Q4 11

Q4 12

Q4 13

Q4 14

Q3 15

1
0

Vacant

Marketed Available (not yet vacant)

Asking Rent
$65

Considering the submarkets current momentum,


combined with a scarcity of large blocks of space
on the horizon, expect concessions to stabilize
and dial back, leading to modest asking rent
growth and a market that leans in the landlords
favor.

Full Service PSF

$60

Outlook

$55
$50
$45
$40
$35

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

Cushman & Wakefield | 8

West End/Georgetown
Net Absorption

Under Construction

Deliveries

Asking Rent

41,100 SF

0 SF

0 SF

$48.51 FS

The West End/Georgetown submarket continued to


witness tightening market fundamentals throughout the
third quarter 2015. Vacancy rates fell 2.6 percentage points
(pp) year-over-year, closing the third quarter 2015 at 11.2%
near the 10-year historical average of 10.0%. Availability
for future vacancies also slipped since the third quarter
last year down by 8.9%, indicating that peak levels of
vacancy are in the past, at least for now. With large blocks
of space being chipped away, class A asking rents closed
the third quarter 2015 at $50.85 per square foot (psf), a
1.7% increase since the same time last year.
Though leasing activity for the quarter lacked any large
leases and were primarily comprised of small and midsize tenants from a variety of private sector industries,
absorption still remained positive, closing at positive
41,128 sf in the third quarter, and bringing the total for the
year to positive 69,808 sf. Advisory Board Companys
future relocation to 655 New York Avenue, NW upon the
buildings completion is the only move out on the horizon
that could impede some of the progress made in recent
quarters..

Net Absorption Deliveries Vacancy


300

With the lack of any new office construction


and declining future availability, the vacancy
rate for West End/Georgetown should continue
to slip toward the 10-year historical average
especially as landlords continue to redevelop
office buildings to non-office uses.
Overall, with close proximity to many of
Washington,
D.C.s
residential
corridors,
universities,
hospitals,
federal
agencies,
including the State Department, as well as a
rich amenity base, the West End/Georgetown
submarket remains well positioned to continue
to capture tenants from a variety of private and
public sectors.

12%

0
-100

8%

-200
-300

4%

-400
-500
05

06

07

08

09

Net Absorption

10

11

Deliveries

12

13

14 YTD
2015

0%

Vacancy Rate

Vacant and Available Space


1.2
1
0.4

0.8

0.2

0.4

0.1

0.6

0.6
0.4

0.7

0.6

0.6

0.2
0

0.2

0.7

0.7

Q4 14

Q3 15

0.3
Q4 10

Q4 11
Vacant

Q4 12

Q4 13

Marketed Available (not yet vacant)

Asking Rent
$52
$50
Full Service PSF

100

-600

Despite declining vacancy and positive absorption,


many blocks of space have continued to linger on the
market, prompting some landlords to evaluate other nonoffice functions for their buildings. Last year, plans to
convert 2501 M Street, NW to a residential building were
announced, and site work is expected to begin later this
year in preparation for the conversion of 1255 22nd Street,
NW from office to multifamily with ground-floor retail.

Outlook

16%

200
Vacancy Rate

Vacancy
11.2%

Square Feet, 000s

*Arrows = Current Qtr Trend

MSF

Market Indicators

$48
$46
$44
$42
$40
$38

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

cushmanwakefield.com | 9

Capitol Hill/NoMa
Net Absorption

Under Construction

Deliveries

Asking Rent

159,700 SF

1,166,900 SF

0 SF

$49.98 FS

The Capitol Hill/NoMa submarket continued to attract a


broad range of private sector tenants throughout the third
quarter of 2015. Though the submarket only accounted
for 3.9% of the Districts gross leasing activity year to date
(a total of 309,385 sf ), Capitol Hill/NoMa did capture a
handful of leases greater than 10,000 sf all of which were
private sector tenants. Fox News signed the largest lease
of the quarter, opting to renew at 400-444 North Capitol
Street, NW for 64,605 sf, maintaining its proximity near
the Capitol. Save the Children Federation signed a 58,768sf lease, the second largest lease of the quarter, at 825
North Capitol Street, NW, relocating the non-profit from
the CBD.
Though NoMa is often considered somewhat of a
government enclave offering GSA tenants new, class A
buildings that meet federal security standards and rent
thresholds several developers are looking to capitalize on
the growing private sector tenant base. Though there is
still a number of proposed mixed-use developments in the
pipeline, other developers have opted to move forward
with their projects. Stanton Development broke ground
on its mixed-use project at 700 Pennsylvania Avenue, SE,
and Property Group Partners continued construction on
the decking portion over I-395 for its residential, retail, and
office development known as Capitol Crossing, which will
better connect East End and Capitol Hill upon its delivery
in 2018. Construction also continued at Republic Square II
(660 North Capitol Street, NW), which the National League
of Cities and the National Association of Counties are
expected to take a combined 81,000 sf upon completion.
Overall market fundamentals remained healthy during the
third quarter 2015. Vacancy declined 1.7 percentage points
(pp) year-over-year, closing the third quarter 2015 at 11.4%.
The average direct class A asking rental rate remained
almost entirely flat, closing the third quarter at $53.02 per
square foot (psf), down just 1.0 % since third quarter 2014.

Net Absorption Deliveries Vacancy


1.50

16%

1.25
12%

1.00
0.75

8%

0.50
0.25

Vacancy Rate

Vacancy
11.4%

MSF

*Arrows = Current Qtr Trend

4%

0.00
-0.25

05

06

07

08

09

Net Absorption

10

11

Deliveries

12

0%

13

14 YTD
2015
Vacancy Rate

Vacant and Available Space


3.0
2.5
2.0
MSF

Market Indicators

0.6

1.0

1.7

0.5
0.0

Q4 10

1.2

1.2

Q4 11

Q4 12

Vacant

0.4

2.0

1.9

Q4 13

Q4 14

0.7

0.9

0.6

1.5

0.6

1.7

Q3 15

Marketed Available (not yet vacant)

Asking Rent
$55

Outlook

Though the pending deliveries over the next


three years could potentially bring additional
large blocks of vacant space to the market,
Capitol Hill/NoMas proximity to the Capitol,
transportation options, and growing amenity
base will continue to remain attractive for private
and public sector tenants alike particularly
those who are seeking core-quality assets at
non-core pricing .

Full Service PSF

$50
$45
$40
$35
$30
$25

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

Cushman & Wakefield | 10

Southwest/Capitol Riverfront/Southeast
Vacancy
9.7%

Net Absorption

Under Construction

Deliveries

Asking Rent

62,900 SF

553,900 SF

0 SF

$44.36 FS

Southwest/Capitol
Riverfront/Southeast
continues
to show signs of growth adding another 63,000 sf of
absorption in the third quarter of 2015. Year-to-date totals
in Southwest and Capitol Riverfront/Southeast come in at
102,900 sf and 62,500 sf, respectively. For a submarket
that registered negative net absorption of 437,800 sf
between 2012 and 2014, the submarket seems to have
turned a new leaf with two consecutive years of strong
positive demand. The vacancy rate continues to drop from
10.0% to 9.7%, a function of the strong leasing market.

Net Absorption Deliveries Vacancy


3

With 70,000 sf preleased out of 550,000 sf under


construction in Southwest, rising vacancy is a definite
possibility.

The National Association of Broadcasters will be


moving to a build- to- suit office building at 1 M
Street, SE in the Capitol Riverfront neighborhood. The
building will break ground in spring of 2016 and bring
130,000 sf of office space to the submarket by 2018.
With its ever-expanding amenity base, the Capitol
Riverfront is rapidly becoming the citys full-service
entertainment district.

Several regionally competitive private sector deals are


weighing a move to SW/Capitol Riverfront. Landing
these deals could change the impression of the market
from a govenment enclave to an invreasing private

-1

12%
8%
4%
05

06

07

08

09

Net Absorption

10

11

Deliveries

12

13

14

Vacancy Rate

YTD
2015

0%

Vacant and Available Space


3.5
3.0

MSF

2.5
2.0

0.1

0.6

1.6

1.8

2.0

1.8

1.7

Q4 11

Q4 12

Q4 13

Q4 14

Q3 15

0.5

1.5

1.3

0.5
0.0

1.5

0.6

0.7

1.0

Q4 10

Vacant

Marketed Available (not yet vacant)

Asking Rent
$55

Full Service PSF

16%

There is one building currently under construction in the


submarket is 400 6th Street, SW (also known as 500 D
Street, SW). The property, developed by Trammell Crow,
is expected to be finished by the end of this year and will
supply 341,300 sf to the submarket. Currently the project
is unleased but is expected to be very competitive for an
unprecedented amount of government deals hitting the
market in the near future.

Outlook

20%

One of the largest leases of the quarter was the 164,700


sf extension/expansion completed by CareFirst BlueCross
BlueShield at 1250 Maryland Avenue, SW. The tenant has
constantly expanded their footprint in the building after
originally taking around 100,000 sf. CareFirst has now
expanded twice in the building since the beginning of 2014
and bumped their lease term out seven years.
Rents continue to be a large driver of demand in the
submarket. Hovering around $44.00 per square foot (psf),
Southwest/Capitol Riverfront/Southeast is a strong player
for the large GSA tenants in the market. Throughout the
past couple of years, the GSA has continued to bump
out leases with short-term renewals leading to a build-up
of roll coming in the next five years. With the GSA rent
cap coupled with significant roll, the emerging markets
especially those submarkets south of the Capitol should
continue to see growth.

24%

Vacancy Rate

*Arrows = Current Qtr Trend

MSF

Market Indicators

$50
$45
$40
$35

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

sectr location.

cushmanwakefield.com | 11

Uptown
*Arrows = Current Qtr Trend

Vacancy
14.4%

Net Absorption

Under Construction

(24,300) SF

0 SF

Uptown experienced its third consecutive quarter of


weak demand registering another 24,000 sf of negative
finished the quarter at 14.4%, up from 14.1% at mid-year.

100

a vacancy rate that hovered anywhere from 6% to 10%.


Recently the submarket has now risen to an all-time high at

Square Feet, 000s

200

its headquarters to the suburbs, the submarket registered

Asking Rent

0 SF

$41.04 FS

Net Absorption Deliveries Vacancy

net absorption. The vacancy rate continued to rise as it


Prior to the second quarter of 2014, when Intelsat relocated

Deliveries

14.4%, well above the historical average of 8.0%. Over the

16%
12%

0
-100

8%

-200

4%

-300

last 10 years, absorption has registered negative 668,000

-400

sf or negative 17,100 sf per quarter.

05

06

07

08

09

Net Absorption

For a submarket that is dominated by smaller-sized leases,

10

11

Deliveries

12

13

14 YTD
2015
Vacancy Rate

Vacancy Rate

Market Indicators

0%

the area is home to numerous local doctors, wealth


management firms, lawyers and smaller associations/
non-profits. The Uptown submarket experienced its

Vacant and Available Space


1.8

Metalogix deal broke the streak of 4 consecutive quarters

1.6

without a deal over 10,000 sf, FHI 360 sublet 13,300 sf of

1.4

expansion space at 1875 Connecticut Avenue, NW. FHI 360

1.2

currently occupies 200,000 sf in the building just north


of Dupont Circle. Of note, after Fannie Mae signed for

MSF

second lease over 10,000 sf in as many quarters. After the

1.1

1
0.8

0.2

0.7

0.6

0.5

0.5

Q4 10

Q4 11

Q4 12

Q4 13

0.4

the GSEs existing buildings on Wisconsin and Connecticut

0.2

Avenues will likely go to market for redevelopment. Given

the slow leasing market in Uptown, expect the property to


undergo a repurpose play and potentially change its use

Vacant

to residential.

0.3

0.9

0.9

Q4 14

Q3 15

0.8

0.1

0.6

700,000 sf in the East End during the first quarter of 2015,

0.4

Marketed Available (not yet vacant)

Asking Rent

Outlook

Most of the large blocks of available space in


Uptown are already vacant, the submarket
inventory is only 6.6 msf and there are no
buildings under construction. Because of these
conditions, even a few moderate-sized leases
over the next year will allow vacancy to trend
back downward toward its long-term average.
Smaller tech-oriented firms have shown a
preference for non-traditional loft style space.
Uptown could potentially fill the demand as this
is largely non-existent in the core markets

Full Service PSF

$50
$45
$40
$35
$30
$25

2009

2010

2011
Class A

2012

2013

2014

2015

Class B, $ PSF

Cushman & Wakefield | 12

Appendix

Table Summaries
Metro Washington Office
Market Summary
13
Employment Data
13
Office Availability, Vacancy,
and Net Absorption
14

Metro Washington Office Market Summary: Third Quarter 2015p


Total
Inventory

Total Space
Vacant

Vacancy
Rate

Q3 2015
Absorption

YTD
Absorption

Washington, DC

123,122,911

13,612,467

11.1%

268,706

518,835

Northern Virginia

163,278,088

30,366,384

18.6%

97,405

270,010

Suburban Maryland

72,899,650

13,600,005

18.7%

93,027

306,374

Regional Totals

359,300,649

57,578,856

16.0%

459,138

1,095,219

Trailing 12-Month Data


15
Historical Year-End Data
16

Metro Washington Current Employment Data


Non Farm
Employment
(Jan-Sep 2014)

Non Farm
Employment
(Jan-Sep 2015p)

Jobs Added/
Lost*

Percent Change

Washington, DC

751,400

763,400

12,000

1.6%

Northern Virginia

1,377,800

1,401,700

23,900

1.7%

957,900

976,700

18,800

2.0%

3,104,700

3,162,800

58,100

1.9%

Market Statistics by Class


17-18
Survey of New Office Space
by Submarket
19-22
Methodology & Definitions
23

Suburban Maryland
Regional Totals

SOURCE: U.S. Bureau of Labor Statistics (Not seasonally adjusted)


* Average per year to date
p - preliminary

cushmanwakefield.com | 13

40,291,779

5,921,127

4,642,579

10,289,374

13,382,559

3,736,758

6,564,289

123,122,911

East End

West End/
Georgetown

Capitol Hill

NoMa

Southwest

Capitol
Riverfront/
Southeast

Uptown

TOTAL

p - preliminary

38,294,446

CBD

Total
Inventory

1,375,878

217,298

122,042

724,464

47,854

127,756

136,464

New Space
Vacant

11,543,802

893,410

172,009

1,113,419

523,954

345,161

638,349

4,530,970

3,326,530

Relet Space
Vacant

692,787

53,201

10,800

17,655

49,324

12,075

27,405

293,478

228,849

Sublet
Space
Vacant

13,612,467

946,611

400,107

1,253,116

1,297,742

405,090

665,754

4,952,204

3,691,843

Total Space
Vacant

11.1%

14.4%

10.7%

9.4%

12.6%

8.7%

11.2%

12.3%

9.6%

Vacancy
Rate (%)

Office Availability, Vacancy, and Net Absorption, Third Quarter 2015p

450,351

2,022

(154)

24,213

424,302

(32)

New Space
Absorption

(234,874)

(33,953)

3,084

38,857

148,308

6,842

42,628

(376,068)

(64,572)

Relet Space
Absorption

53,229

9,685

18,983

(18,325)

(1,209)

(1,500)

40,037

5,558

Sublet
Space
Absorption

268,706

(24,268)

5,106

57,840

129,829

29,846

41,128

88,271

(59,046)

Total
Absorption

Appendix

Cushman & Wakefield | 14

39,708,356

5,921,127

4,642,579

10,289,374

13,382,559

3,736,758

6,564,289

122,889,802

East End

West End/
Georgetown

Capitol Hill

NoMa

Southwest

Capitol Riverfront/
Southeast

Uptown

TOTAL

p - preliminary

38,644,760

CBD

4th Qtr
2014

Trailing 12-Month Data

122,850,343

6,564,289

3,736,758

13,382,559

10,289,374

4,642,579

5,921,127

39,812,897

38,500,760

1st Qtr
2015p

122,850,343

6,564,289

3,736,758

13,382,559

10,289,374

4,642,579

5,921,127

39,812,897

38,500,760

2nd Qtr
2015p

Total Inventory

123,122,911

6,564,289

3,736,758

13,382,559

10,289,374

4,642,579

5,921,127

40,291,779

38,294,446

3rd Qtr
2015p

11.2%

13.0%

12.4%

10.1%

13.9%

10.8%

12.4%

10.7%

10.9%

4th Qtr
2014

11.3%

13.5%

12.0%

9.7%

14.3%

10.3%

12.0%

11.6%

10.2%

1st Qtr
2015p

11.0%

14.1%

10.8%

9.8%

13.9%

9.4%

11.9%

11.5%

9.9%

2nd Qtr
2015p

Vacancy Rate (%)

11.1%

14.4%

10.7%

9.4%

12.6%

8.7%

11.2%

12.3%

9.6%

3rd Qtr
2015p

197,943

41,706

18,180

10,105

13,454

(1,011)

(14,688)

121,711

8,486

4th Qtr
2014

(25,004)

(22,760)

12,882

54,501

(43,179)

24,583

25,466

(296,022)

219,525

1st Qtr
2015

275,133

(38,397)

44,514

(9,499)

41,964

43,527

3,214

64,365

125,445

2nd Qtr
2015

Total Absorption

268,706

(24,268)

5,106

57,840

129,829

29,846

41,128

88,271

(59,046)

3rd Qtr
2015p

Appendix

cushmanwakefield.com | 15

39,225,153

6,019,052

4,504,027

9,636,850

13,907,238

3,736,758

6,408,307

122,155,805

East End

West End/
Georgetown

Capitol Hill

NoMa

Southwest

Capitol Riverfront/ Southeast

Uptown

TOTAL

p - preliminary

38,718,420

CBD

2012

Historical Year-End Data

122,183,159

6,489,940

3,736,758

13,516,238

10,289,374

4,642,579

6,019,052

38,522,051

38,967,167

2013

122,889,802

6,564,289

3,736,758

13,382,559

10,289,374

4,642,579

5,921,127

39,708,356

38,644,760

2014

Total Inventory

123,122,911

6,564,289

3,736,758

13,382,559

10,289,374

4,642,579

5,921,127

40,291,779

38,294,446

2015p

10.6%

7.4%

17.6%

8.1%

10.0%

5.2%

10.2%

10.4%

12.3%

2012

10.6%

7.2%

18.6%

9.8%

16.2%

6.3%

5.7%

9.1%

11.8%

2013

11.2%

13.0%

12.4%

10.1%

13.9%

10.8%

12.4%

10.7%

10.9%

2014

Vacancy Rate (%)

11.1%

14.4%

10.7%

9.4%

12.6%

8.7%

11.2%

12.3%

9.6%

2015p

(95,156)

109,221

(36,363)

(206,657)

39,153

183,514

5,912

(411,536)

221,600

2012

550,914

51,902

(41,373)

(223,402)

175

88,177

152,871

175,785

346,779

2013

(489,588)

(373,697)

219,686

(149,719)

127,212

(208,225)

(515,786)

136,495

274,446

2014

Total Absorption

543,839

(62,665)

49,620

48,341

171,793

73,373

44,342

152,636

66,399

2015p

Appendix

Cushman & Wakefield | 16

Market Statistics
Washington, DC 3rd Quarter 2015 Market Statistics

Buildings

Total
Inventory
(SF)

New
Vacancy
(%)

Relet
Vacancy
(%)

Sublet
Vacancy
(%)

Total
Vacancy*
(%)

Total
Availability
(%)

Net Absorption
Current QTR
(SF)

Under
Construction
(SF)

Average
Asking
Rent
(FS)

101

22,414,164

0.6%

9.0%

0.5%

10.1%

14.8%

(89,511)

607,951

$55.17

128

15,002,584

0.0%

8.5%

0.8%

9.3%

12.0%

19,384

$42.13

20

877,698

0.0%

3.8%

0.0%

3.8%

3.0%

11,081

$34.81

TOTAL

249

38,294,446

0.4%

8.7%

0.6%

9.6%

13.6%

(59,046)

607,951

$50.40

117

31,386,913

0.4%

11.1%

0.7%

12.3%

21.5%

302,233

459,617

$58.15

65

7,921,789

0.0%

12.7%

0.7%

13.4%

16.3%

(222,695)

$43.89

22

983,077

0.0%

3.0%

0.6%

3.5%

7.0%

8,733

$47.25

TOTAL

204

40,291,779

0.3%

11.2%

0.7%

12.3%

20.2%

88,271

459,617

$54.92

CBD
Class

East End
Class

West End/Georgetown
Class
A

23

3,886,159

0.0%

13.7%

0.7%

14.4%

17.3%

2,139

$50.85

29

1,942,755

0.0%

5.4%

0.0%

5.4%

10.7%

38,989

$40.33

92,213

0.0%

0.0%

0.0%

0.0%

0.0%

$35.00

TOTAL

58

5,921,127

0.0%

10.9%

0.5%

11.2%

14.8%

41,128

$48.51

13

2,865,971

1.7%

8.3%

0.1%

10.1%

14.6%

24,213

966,617

$56.11

17

1,364,132

0.0%

5.6%

0.7%

6.3%

18.3%

1,010

$43.09

14

412,476

0.0%

7.2%

0.0%

7.2%

8.5%

4,623

$44.87

TOTAL

44

4,642,579

1.0%

7.3%

0.3%

8.7%

14.7%

29,846

966,617

$56.05

32

9,497,067

7.6%

2.9%

0.4%

11.0%

16.2%

129,789

200,000

$49.41

730,545

0.0%

26.7%

1.0%

27.7%

19.6%

40

$29.20

61,762

0.0%

88.1%

0.0%

88.1%

23.4%

$13.43

TOTAL

39

10,289,374

7.1%

5.1%

0.5%

12.6%

16.5%

129,829

200,000

$47.71

Capitol Hill
Class

NoMa
Class

* Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space.
cushmanwakefield.com | 17

Market Statistics
Washington, DC 3rd Quarter 2015 Market Statistics

Buildings

Total
Inventory
(SF)

New
Vacancy
(%)

Relet
Vacancy
(%)

Sublet
Vacancy
(%)

Total
Vacancy*
(%)

Total
Availability
(%)

Net Absorption
Current QTR
(SF)

Under
Construction
(SF)

Average
Asking
Rent
(FS)

Southwest
Class
A

23

10,099,177

1.2%

6.9%

0.2%

8.2%

17.0%

38,967

553,879

$47.71

11

3,283,382

0.0%

12.8%

0.0%

12.8%

23.3%

18,873

$40.79

TOTAL

34

13,382,559

1.0%

9.3%

0.1%

9.4%

18.8%

57,840

$44.99

Capitol Riverfront/Southeast
Class
A

11

3,736,758

5.8%

4.6%

0.3%

10.7%

16.3%

5,106

$42.71

TOTAL

11

3,736,758

5.9%

4.7%

0.3%

10.7%

16.3%

5,106

$42.71

12

2,126,653

0.0%

2.4%

1.9%

4.3%

9.4%

12,973

$43.01

55

3,603,081

0.0%

22.1%

0.3%

22.4%

26.9%

(14,738)

$40.87

31

834,555

0.0%

5.5%

0.4%

5.9%

1.7%

(22,503)

$29.40

TOTAL

98

6,564,289

0.0%

14.8%

0.9%

14.4%

19.6%

(24,268)

$41.04

Uptown
Class

Washington, DC
Class
A

332

86,012,862

1.6%

8.7%

0.6%

10.9%

17.7%

425,909

2,234,185

$50.60

310

33,848,268

0.0%

11.5%

0.6%

12.0%

16.2%

(159,137)

$41.62

95

3,261,781

0.0%

5.9%

0.3%

6.2%

5.5%

1,934

$37.46

TOTAL

737

123,122,911

1.1%

9.4%

0.6%

11.1%

17.0%

268,706

2,234,185

$50.37

* Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space.

Cushman & Wakefield | 18

cushmanwakefield.com | 19

Brookfield Office Properties


Deutsche Asset & Wealth Mgmt

2001 M Street, NW

1800 K Street, NW

Gould Property Company

600 Massachusetts Avenue, NW

= Full Service NN = Plus Electric & Char


= Plus Electric NT = Plus Taxes

FS
N

U/R = Under Renovation


NNN = Net of all Operating Expenses and Taxes

Operating Expense and Real Estate Tax Base

Status

U/C = Under Construction

Total

Withheld

$44.00-$51.00 NNN

Republic Properties Corporation

660 N Capitol Street, NW

200 and 250 Massachusetts Avenue,


Property Group Partners
NW

RENTAL RATE

OWNER/DEVELOPER

BUILDING ADDRESS

Capitol Hill/ NoMa

Total

$55.00-$65.00 NNN

Douglas Development

1000 F Street, NW

U/C

STATUS

U/R

U/R

U/C

STATUS

U/C

U/C

STATUS

Low to Mid $50's NNN U/C

RENTAL RATE

OWNER/DEVELOPER

$46.00 - $48.00 NNN

BUILDING ADDRESS

East End

Total

Mid $60's NNN

The JBG Companies

900 16th Street, NW


$45.00-$55.00 NNN

RENTAL RATE

OWNER/DEVELOPER

BUILDING ADDRESS

CBD

1Q18

1Q16

DELIVERY
DATE

3Q16

3Q16

DELIVERY
DATE

1Q16

1Q16

1Q16

DELIVERY
DATE

1,166,917

966,917

200,000

RENTABLE
BUILDING
AREA

459,617

364,962

94,655

RENTABLE
BUILDING
AREA

607,951

201,226

284,000

122,725

RENTABLE
BUILDING
AREA

1,166,917

966,917

200,000

AVAILABLE
SPACE

210,231

123,659

86,572

AVAILABLE
SPACE

427,876

161,546

234,000

32,330

AVAILABLE
SPACE

Washington, DC Survey of Office Space Under Construction/Under Renovation

0%

0%

0%

PERCENT
PRELEASED

54%

66%

9%

PERCENT
PRELEASED

30%

20%

18%

74%

PERCENT
PRELEASED

N/A

N/A

MAJOR TENANTS

Venable

N/A

MAJOR TENANTS

N/A

Bracewell Giuliani

Miller & Chevalier

MAJOR TENANTS

Cushman & Wakefield | 20

N
NNN = Net of all Operating Expenses and Taxes

= Full Service NN = Plus Electric & Char


= Plus Electric NT = Plus Taxes

FS

U/R = Under Renovation

2,788,364

TOTAL CURRENTLY UNDER


CONSTRUCTION/RENOVATION

Operating Expense and Real Estate Tax Base

966,917

2018 DELIVERIES

Status

212,596

2017 DELIVERIES

U/C = Under Construction

1,267,568

AVAILABLE
SPACE

RENTABLE
BUILDING
AREA

2,358,901

966,917

212,596

838,107

341,281

553,877

212,596

341,281

AVAILABLE
SPACE

553,879

212,596

341,283

RENTABLE
BUILDING
AREA

2016 DELIVERIES

3Q17

4Q15

DELIVERY
DATE

341,283

U/C

U/C

STATUS

2015 DELIVERIES

Washington, DC Summary

Total

PN Hoffman / Madison Marquette

The Wharf Phase 1- 800 Maine


Avenue, SW
Mid to High $50's FS

Trammell Crow Company / Columbia


Withheld
Funding Corp

400 6th Street, SW A.K.A. 500 D


Street, SW

RENTAL RATE

OWNER/DEVELOPER

BUILDING ADDRESS

Southwest/Capitol Riverfront/Southeast

Washington, DC Survey of Office Space Under Construction/Under Renovation

15%

0%

0%

34%

0%

PERCENT
PRELEASED

0%

0%

0%

PERCENT
PRELEASED

N/A

N/A

MAJOR TENANTS

cushmanwakefield.com | 21

900 G Street, NW

Perseus Realty
Brookfield Office Properties
Akridge
Hines
Union Investments

1728 14th Street, NW

799 9th Street, NW

1200 17th Street, NW

AAMC
655 K Street, NW

600 13th Street, NW

= Full Service NN = Plus Electric & Char

N = Plus Electric NT = Plus Taxes


NNN = Net of all Operating Expenses and Taxes

FS

Operating Expense and Real Estate Tax Base

Hines

Furioso Development

1525 14th Street, NW

CityCenter DC
North and South Towers
800/850 10th Street NW
Total

OWNER/DEVELOPER

BUILDING ADDRESS

2014 Deliveries

$46.50 FS

N/A

RENTAL RATE

$47.00-$53.00 NNN

$54.00 NNN

RENTAL RATE

Withheld

$36.00-$47.00 NNN

$50.00-$57.00 NNN

East End

East End

East End

CBD

East End

Uptown

Uptown

SUBMARKET

East End

East End

SUBMARKET

1,328
149,355

1,473,976

24,845

19,996

63,811

39,375

NEW SPACE
AVAILABLE

102,736

25,198

77,538

NEW SPACE
AVAILABLE

531,652

221,659

273,454

168,837

204,025

27,761

46,588

RENTABLE
BUILDING
AREA

577,295

104,541

472,754

RENTABLE
BUILDING
AREA

*Vacancy rate for new office space- does not include relet or sublet space available

Delivered 1Q14

Renovation
$44.00-$48.00 NNN
Completed 1Q14

Delivered 2Q14

Delivered 3Q14

Renovation
$43.00-$54.00 NNN
Completed 3Q14

Delivered 3Q14

Delivered 4Q14

STATUS

Delivered 1Q15

ASB Real Estate Investments / MRP


Realty, Inc

Total

Delivered 3Q15

Boston Properties

601 Massachusetts Avenue, NW

STATUS

OWNER/DEVELOPER

BUILDING ADDRESS

2015 Deliveries

Washington, DC Survey of New Office Space

10%

0%

11%

7%

38%

19%

0%

0%

VACANCY RATE
(AS OF CURRENT
QUARTER)*

18%

24%

16%

VACANCY RATE
(AS OF CURRENT
QUARTER)*

97%

85%

79%

60%

73%

100%

100%

PERCENT LEASED UPON


DELIVERY

40%

84%

PERCENT LEASED UPON


DELIVERY

Cushman & Wakefield | 22

Renovation
Low-Mid $40's FS
Completed 2Q13
Delivered 1Q13

First Potomac Realty Trust / The


Lenkin Company Management
Douglas Development Corporation
Angelo Gordon / Monument Realty /
Verizon Communications

440 1st Street, NW

Wonder Bread Building


641 S Street, NW

2055 L Street, NW

Boston Properties

Broadcast Center Partners, LLC


Potomac Investment Properties

500 N Capitol Street, NW

Offices at Progression Place


1805 7th Street, NW

1000 Connecticut Avenue, NW

= Full Service NN = Plus Electric & Char

N = Plus Electric NT = Plus Taxes


NNN = Net of all Operating Expenses and Taxes

FS

Operating Expense and Real Estate Tax Base

Total

OWNER/DEVELOPER

BUILDING ADDRESS

2012 Deliveries

Douglas Development Corporation

Renovation
$48.00-$52.00 FS
Completed 3Q13

Carr Properties

1700 New York Avenue, NW

Arch Square
801-803 7th Street, NW
Total

Delivered 4Q13

Trammell Crow Company

Uptown

Capitol Hill

SUBMARKET

East End

CBD

Uptown

Capitol Hill

CBD

NoMa

High $40's to Mid $50's FS CBD

N/A

$44.00-$48.00 NNN

RENTAL RATE

N/A

N/A

$55.00 NNN

$52.00-$55.00 FS

NoMa

SUBMARKET

715,373

385,791

98,243

231,339

15,272

9,468

5,804

NEW SPACE
AVAILABLE

700,735

1,145,399

RENTABLE
BUILDING
AREA

45,087

3,124

289,524

363,000

NEW SPACE
AVAILABLE

25,000

126,760

81,633

137,495

121,987

289,524

363,000

RENTABLE
BUILDING
AREA

*Vacancy rate for new office space- does not include relet or sublet space available

Delivered 2Q12

Delivered 4Q12

Delivered 4Q12

STATUS

Delivered 1Q13

Delivered 4Q13

$30.00's NNN

Sentinel Square Phase II


1050 1st Street, NE

Delivered 4Q13

StonebridgeCarras

RENTAL RATE

Three Constitution Square


175 N Street, NE

STATUS

OWNER/DEVELOPER

BUILDING ADDRESS

2013 Deliveries

Washington, DC Survey of New Office Space

2%

2%

0%

3%

VACANCY RATE
(AS OF CURRENT
QUARTER)*

61%

0%

0%

0%

33%

3%

100%

100%

VACANCY RATE
(AS OF CURRENT
QUARTER)*

83%

52%

82%

PERCENT LEASED UPON


DELIVERY

76%

74%

0%

14%

78%

0%

0%

PERCENT LEASED UPON


DELIVERY

Methodology & Definitions


Methodology

Explanation of Terms

Market statistics are calculated


from a base building inventory
made up of office properties
deemed to be competitive in the
typical Washington, DC office
market. Single-tenant buildings and
privately-owned buildings in which
the federal government leases space
are included.
Generally, owneroccupied
and
federally-owned
buildings are not included. Older
buildings unfit for occupancy or ones
that require substantial renovation
before
tenancy
are
generally
not included in the competitive
inventory. Vacant space is defined
as space that is physically vacant and
available immediately. Sublet space
still occupied by the tenant is not
counted as vacant space.

Total Inventory: The total amount


of office space (in buildings greater
than 10,000 square feet) that can be
rented by a Fourth party.
New Space Vacant: First generation,
never-occupied office space in
newly constructed or substantially
renovated buildings, being actively
marketed by a landlord.
Relet
Space
Vacant:
Secondgeneration,
unoccupied
office
space being actively marketed by a
landlord. (Space that is marketed but
largely occupied is not counted as
vacant space.)
Sublet Space Vacant: Secondgeneration, unoccupied space being
actively marketed by a tenant.
(Sublet space that is marketed but
still occupied is not counted as
vacant space.)
Total Space Vacant: The sum of
new, relet, and sublet space that
is unoccupied and being actively
marketed.
Vacancy Rate: The amount of
unoccupied space (new, relet, and
sublet) expressed as a percentage of
total inventory. (Total Space Vacant
divided by Total Inventory.)

Total Space Available: The total


amount of space, both vacant and
occupied, being actively marketed
for lease by a tenant or landlord.
(This includes space that is currently
occupied but marketed for future
availability.)
Availability Rate: The total amount
of space being actively marketed for
lease (both vacant and occupied)
expressed as a percentage of total
inventory. (Total Space Available
divided by Total Inventory.)
Absorption: The net change in
occupied space between two points
in time. (Total occupied space in the
previous quarter minus total occupied
space in the current quarter, quoted
on a net, not gross, basis.)
New Space Absorption: The net
change in occupied new space
between two quarters.
Relet/Sublet Absorption: The net
change in occupied relet and sublet
space between two quarters.
Total Absorption: The The net
change in total occupied (new, relet,
and sublet) space between two
quarters.

Disclaimer
This report and other research materials may be found on our website at www.cushmanwakefield.com. This is a research document of Cushman
& Wakefield in Washington, DC. Questions related to information herein should be directed to the Research Department at 202-463-2100.
Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. The firms
43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors
around the world. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services
of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management
(DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.
com or follow @CushWake on Twitter.

cushmanwakefield.com | 23

Visit cushmanwakefield.com for more information on the full range of


Cushman & Wakefield commercial real estate services or contact:
Nathan Edwards
Regional Director
2101 L Street, NW, Suite 700
Washington, DC 20037
+1 202 463 2100
Joseph Wood
Research Analyst
2101 L Street, NW, Suite 700
Washington, DC 20037
+1 202 463 2100
Summer Newman
Senior Research Analyst
2101 L Street, NW, Suite 700
Washington, DC 20037
+1 202 463 2100

About Cushman & Wakefield


Cushman & Wakefield is a leading global real estate services firm that helps clients
transform the way people work, shop, and live. The firms 43,000 employees in more
than 60 countries provide deep local and global insights that create significant value for
occupiers and investors around the world. Cushman & Wakefield is among the largest
commercial real estate services firms with revenue of $5 billion across core services
of agency leasing, asset services, capital markets, facility services (C&W Services),
global occupier services, investment & asset management (DTZ Investors), project &
development services, tenant representation, and valuation & advisory. To learn more,
visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Publication date: 11.12.15


Copyright 2015 Cushman & Wakefield. All rights reserved.

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