Cassidy & Pinkard Colliers today announced that the Washington metropolitan area office sector experienced an overall negative net absorption of 817,000 square feet in the first quarter, up from negative 793,200 square feet in the fourth quarter of 2008. Vacancy rates have increased in the DC region, registering at 11.7 percent. Also, effective rents continued to fall across the region in the first quarter of 2009.
“The DC metro may in fact be in a recession,” remarked Kevin Thorpe, Vice President, Director of Market Research. “The region has suffered three consecutive months of job losses, with the brunt of the pain experienced in Northern Virginia and Suburban Maryland.” Mr. Thorpe added, “Unlike last year, our office markets – particularly the ones in the suburbs – are now giving space back to the market due to the economic contraction.”
First quarter results in the three jurisdictions in the region are as follows:
Washington, DC – Net absorption was a positive 174,300 square feet, up from positive 86,600 square feet in the fourth quarter; vacancy ended the quarter at 8.3 percent, the same as year ago.
“Bet against the District this year and you will lose,” commented Mr. Thorpe. “Unlike, Virginia and Maryland, and the rest of the country for that matter, DC continues to add jobs. In fact, economic activity in the District is ramping up compared to recent years. The office markets in the DC precinct should post positive absorption overall.”
Northern Virginia – Net absorption was a negative 555,600 square feet, from negative 703,500 square feet in the fourth quarter; vacancy ended the quarter at 13.3 percent, up from 11.1 percent a year ago.
Suburban Maryland – Net absorption was a negative 435,900 square feet, from negative 176,300 square feet in the fourth quarter; vacancy ended the quarter at 13.7 percent, up from 11.9 percent a year ago.
Mr. Thorpe stated, “The good news is that the recession in the DC region will be a mild one, assuming no further deterioration in the global economy. The first half of 2009 will be difficult, the second half will be better but still sluggish. However, by 2010, the DC region will be pulling out of this and looking at healthy job gains and much improved, possibly even robust, demand for office space.”
About Cassidy & Pinkard Colliers
Cassidy & Pinkard Colliers has consolidated its ownership structure with Colliers Turley Martin Tucker, Colliers Pinkard, and Colliers ABR, forming a holding company that is one of the nation’s largest commercial real estate service firms. The consolidated entity completes more than $13 billion in worldwide transactions annually and manages more than $30 billion in real estate. The holding company’s portfolio totals 300 million square feet under property management, 210 million square feet of space for lease, and $5 billion in capital markets transactions annually. The Corporate Solutions division sustains more than 20,000 locations for Fortune 1,000 companies and delivers a new location “Every 80 Minutes.” Colliers is the top-ranked real estate firm on the Global Outsourcing 100 companies list, IAOP Top 100. For more information about Colliers International, a worldwide affiliation of independently owned and operated companies, visit www.colliers.com.
