Currently, says Tonya Ginter, vice president of research for GVA Advantis, there is close to 25,000 sf of space still available in the building on the fourth, sixth and eighth floors. "Within those blocs, the asking price for rent is between $25.50 per sf to $26.50 per sf." That is slightly more than the average for a similar building in the submarket, she notes, but not an unreasonable increase considering it is an asking price.
The Silver Spring market has undergone a virtual renaissance over the last few years thanks to significant redevelopment of the downtown area. Landmark buildings have included the construction of the new Discovery Office building in the early 2000s as well as a multitude of mixed use and retail projects concentrated in the Georgia-Wayne-Fenton street grid.
What has been noticeably lacking though, Ginter points out, is office development. "The last office building that delivered was in 2004 - 8515 Georgia Ave., a 183,000-sf class A property predominately occupied by the American Nurses Association and World Space Inc.," she says.
The combination of these two trends, the development of several retail and mixed use amenities to attract workers, but no new office product to put them in, has driven down vacancy rates substantially. Now the submarket boasts of a 5% vacancy rate, down from 14% a few years ago, Ginter says. As more firms move into the area and others, such as TSC stay put, pressure to develop new office space will grow, she predicts.
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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.
