Capitol Hill Area Submarkets Q2 2019

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 2^nd 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%