WASHINGTON, DC–Earlier this month Cushman & Wakefield released its fourth quarter 2017 Research Statistics, reporting that concession packages for the DC area have remained elevated for long-term Class A deals. That was perhaps an understatement: it noted that some tenant improvement allowance packages are reaching $130 per square foot, as landlords chase the few large near-term expirations in the market.
That's not all: there are rumor deals out there that have TIs reaching $150 per square feet and free rent as much as 24 months, Nathan Edwards, senior director of Cushman & Wakefield, tells GlobeSt.com.
“The ceiling keeps changing — we expected 2016 to be the top of concessions; back then the TIs were in the $120 per square foot range with free rent a month per year of the term. It rose in 2017 and we expect concession packages to rise again in 2018.”
Lease Terms Are Rising Too
Landlords, though, are extracting something for their trouble — lease terms are more frequently coming in at 15 years to counter the coosts. An 11-year deal with a year free rent has been historically the average package for the DC area, Edwards says. Now, “we're seeing two years free rent on a 15-year plus deal.”
Recommended For You
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
