Office Market Outlook | Q1

Office Market Outlook
|
PRINCE GEORGE’S COUNTY, MD
Q1
2013
Report Compiled by: David B. Wills
Trends
The
College
Park
Aviation
Museum
opened in
1998 and
is an
affiliate
of the
Smithsonian
Institution.
The museum
is a 27,000
square foot
state-of-theart facility
located
on the
grounds of
the world’s
oldest
continuously
operating
airport in
College
Park,
MD
&Deals
10100 Business Parkway, Lanham, MD 20706 | TEL 301 459 440 | FAX 301 459 1533 | www.naimichael.com
The information contained herein was obtained by sources deemed reliable; however we make
no representation as to its accuracy or completeness.
Office Market Outlook | Q1 2013
OFFICE VACANCY RATES | PRINCE GEORGE’S COUNTY, MD
OVERVIEW:
18.5%
The Prince George’s County office market totals 26,703,669 square feet
in 1,135 buildings.
OFFICE LEASING TIPS 101: When speaking to tenants, we find that
the primary motivation to relocate is often related to their heating and air
conditioning. They report that it is always either too hot or too cold in their
offices. One reason is because the ducting to tenant spaces has been
reconfigured many times over the years. The good news is that some
newer buildings are Energy Star Certified Buildings (the green building
rating). Look for details in our upcoming newsletter and check back with
us next time when we will explain how building maintenance costs impact
tenants. We’ll also discuss rebates and incentives for lighting and HVAC
improvements.
TRENDS: VACANCY: The office vacancy rate in Prince George’s
Overall
Vacancy
County increased slightly to 18.3% at the end of the
Q1 2013. This compares to a vacancy rate of 9.8% in
Washington’s central business district and 15.6% for all of
Suburban Maryland and Northern Virginia.
RENTAL RATES: The average quoted asking rental
Average
Rental Rate
Total Net
Absorption
(SF)
rate for available office space in Prince George’s County
was $19.98 per square foot per year at the end of the Q1
2013.
ABSORPTION: Net absorption for the overall Prince
George’s County market was negative 127,182 square
feet in the Q1. That compares to 53,229 square feet in the
Q4 2012 and 85,841 square feet in the Q3 2012.
18.4%
18.2%
18.3%
18.1%
18.0%
17.9%
17.5%
17.5%
17.0%
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Overall Vacancy (%)
Overall Vacancy (%)
$20.60
Source, CoStar 2013
$20.48
$20.50
$20.40
$20.30
$20.30
$20.20
$20.20
$20.13
$20.10
$20.00
$19.92
$19.98
$19.90
$19.80
$19.70
$19.60
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Average Rental Rate ($/SF)
Average Rental Rate ($/SF)
Source, CoStar 2013
Total Net Absorption (SF)
200,000
150,000
100,000
50,000
0
NOTEABLE LEASE TRANSACTIONS:
CHELSEA SCHOOL, a 35 year old private school currently located in
Silver Spring, Maryland has leased approximately 20,070 square feet of
office space at Metropolitan Shops, 2970 Belcrest Center Drive, Hyattsville
and plans to occupy in September. Metropolitan Shops is a 160,000
square foot four story retail/office building located adjacent to the Prince
George's Plaza Metro station opposite The Mall at Prince George's. According to an article published in the Gazette.Net Prince George's
County Community News, "the school has been searching for new location
because the current property is proposed to be purchased by a private
development company for redevelopment. Since many of its students are
from Prince George’s County, it has naturally been focusing upon areas
within this County."
Source, Costar and the Gazette 2013
(50,000)
(100,000)
(150,000)
(200,000)
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Total Net Absorption (SF)
Source, CoStar 2013
OTHER NEW OFFICE LEASES INCLUDE:
Trax International leasing 16,837 SF at the
Aerospace building, 10210 Greenbelt Rd,
Greenbelt; IM Systems Group occupied 4,853
SF at 5825 University Research Court, M Square
University of MD Research Park, College Park and
Lancaster Bible College leasing 18,575 SF at 7852
Walker Drive, Patriot Business Park, Greenbelt.
NAI The Michael Companies, Inc.
10100 Business Parkway, Lanham, MD 20706 TEL 301-459-4400 FAX 301-459-1533 www.naimichael.com
Office Market Outlook | Q1 2013
OFFICE VACANCY RATES | PRINCE GEORGE’S COUNTY, MD
Total Prince George's County Office Submarket Statistics
Existing
Inventory
# Blds
Submarket Cluster
Submarket
Vacancy
Total RBA
Direct SF
Total SF
Vac %
YTD Net
YTD
Absorption
Deliveries
Under
First Quarter 2013
Quoted
Const SF
Rates
113
2,403,725
297,518
301,618
12.5%
(26,952)
0
0
$17.37
Bowie
66
2,003,006
283,824
287,924
14.4%
(20,151)
0
0
$17.53
Greater Upper Marlboro
47
400,719
13,694
13,694
3.4%
(6,801)
0
0
$16.22
700
19,553,502
3,876,123
3,941,695
20.2%
(107,402)
0
0
$19.78
54
1,889,595
432,070
440,018
23.3%
(21,739)
0
0
$18.77
233
5,127,530
862,270
865,619
16.9%
(125,736)
0
0
$20.61
81
3,743,034
981,974
1,013,101
27.1%
17,107
0
0
$21.70
130
3,691,102
718,851
718,851
19.5%
5,286
0
0
$19.40
65
2,129,640
452,769
462,944
21.7%
(9,157)
0
0
$17.58
Laurel
137
2,972,601
428,189
441,162
14.8%
26,837
0
0
$18.15
S Prince George's County
322
4,746,442
647,116
648,466
13.7%
7,172
0
0
$21.87
Branch Avenue Corridor
169
2,525,220
143,530
143,530
5.7%
(11,072)
0
0
$17.90
NatHbr/OxnHill/FtWash
57
1,279,617
226,435
227,785
17.8%
25,751
0
0
$23.91
Pennsylvania Ave Corridor
96
941,605
277,151
277,151
29.4%
(7,507)
0
0
$22.42
1,135
26,703,669
4,820,757
4,891,779
18.3%
(127,182)
0
0
$19.98
E Prince George's County
N Prince George's County
Beltsville/Calverton
College Park
Greenbelt
Landover/Largo/Captl Hts
Lanham
Totals
Source, CoStar 2013
PG County
Vacancy &
Absorption
Overall
Vacancy
(%)
Total Net
Average
Absorption Rental Rate
(SF)
($/SF)
Q4 2011
17.5%
-11,170
$20.48
Q1 2012
18.2%
-177,763
$20.30
Q2 2012
18.4%
157,377
$20.20
Q3 2012
18.1%
85,841
$20.13
Q4 2012
17.9%
53,229
$19.92
Q1 2013
18.3%
-127,182
$19.98
Source, CoStar 2013
Health Center Drive
Bowie, MD
Old Mill Road
Upper Marlboro, MD
University of Maryland
Research Park
College Park, MD
NAI The Michael Companies, Inc.
10100 Business Parkway, Lanham, MD 20706 TEL 301-459-4400 FAX 301-459-1533 www.naimichael.com
Office Market Outlook | Q1 2013
OFFICE VACANCY RATES | PRINCE GEORGE’S COUNTY, MD
Northern Submarkets
- Laurel
- Beltsville
- Greenbelt
BWI
Airport
NSA
FT. MEADE
CYBER COMMAND
Central Submarkets
-
Bowie
Capitol Heights
Cheverly/Hyattsville
Landover/Largo
Lanham
Penn Ave Corridor
Upper Marlboro
Southern Submarkets
- Branch Ave Corridor
- Brandywine PG South
- National Harbor/Oxon
Hill/Fort Washington
FDA
IRS
NASA
UNIVERSITY
OF MD
Reagan
National
Airport National
Harbor
JOINT
BASE
ANDREWS
PRINCE
GEORGE’S
COUNTY
GOVERNMENT
Source: Prince George’s County, MD Government 2012
NAI The Michael Companies, Inc.
10100 Business Parkway, Lanham, MD 20706 TEL 301-459-4400 FAX 301-459-1533 www.naimichael.com