Capitol Hill Area Submarkets Q2 2019

the wharf.jpg

Southwest

  • RBA: 12,424,906 SF
  • Vacancy Rate: 11.5%
  • 12 Month Net Absorption: 664,000 SF
  • Average Asking Rent: $50.76
  • 12 Month Rent Growth: 2.2%

Southwest is rapidly becoming DC’s hottest submarket. Don’t let the vacancy rate fool you. While it may have ended Q1 2019 at 14%, the highest in the District, this was the result of 700,000 SF delivering since 2017, not a lack of demand as evidenced by the 664,000 SF of positive net absorption and 2.2% in rent growth in the past 12 months. Most of the vacancy is attributable to 3 Star properties and not the newly delivered product. In fact, 700,000 SF of additional inventory was under construction at the end of last quarter and the 2nd phase of the Wharf is set to deliver 1.25 million square feet by the end of 2022. We will see if demand can outpace supply in the long-term, but with average rates of $50.76/SF/yr, Southwest currently offers a more affordable alternative than DC’s traditionally premier submarkets like the CBD and East End.

NoMA

  • RBA: 11,552,310 SF
  • Vacancy Rate: 7.9%
  • 12 Month Net Absorption: 986,000 SF
  • Average Asking Rent: $50.76
  • 12 Month Rent Growth: 2.3%

Capitol Hill

  • RBA: 7,124,011 SF
  • Vacancy Rate: 10.8%
  • 12 Month Net Absorption: 63,200 SF
  • Average Asking Rent: $55.63
  • 12 Month Rent Growth: 3.3%

Capitol Riverfront

  • RBA: 4,168,864 SF
  • Vacancy Rate: 8.3%
  • 12 Month Net Absorption: (59,500 SF)
  • Average Asking Rent: $50.20
  • 12 Month Rent Growth: 4.0%

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