WASHINGTON, DC—Over the last year rents for Class B office space have jumped 9.2%, according to JLL. The rent increase, which brings class B rents to $52 per square foot from about $45 per square foot a year ago, is in response to the plans by some class B building owners to convert their properties to class A status. The remaining class B building owners feel justified, or at least able, to raise their own rents accordingly.
“These tenants can stomach the increase by becoming more efficient,” JLL SVP Seth Benhard told GlobeSt.com.
Another possibility is that they could move to a Class C space, where rents are about $40 per square foot, but it can be difficult to find decent buildings around that rate, Benhard said.
The class B market is also being impacted by the growth of co-working providers such as WeWork and Make Offices, which provide incubation opportunities for startups that will ultimately grow and transition into Class B space, Benhard also noted.
The buildings being upgraded to class A status include 2001 M St., NW, 1800 K St., NW and 1401 New York Ave, NW and the upcoming repositioning or demolition of 2000 K St. NW, 2000 L St., NW, 900 19th St., NW and 1150 17th St., NW among other buildings.
WASHINGTON, DC—Over the last year rents for Class B office space have jumped 9.2%, according to JLL. The rent increase, which brings class B rents to $52 per square foot from about $45 per square foot a year ago, is in response to the plans by some class B building owners to convert their properties to class A status. The remaining class B building owners feel justified, or at least able, to raise their own rents accordingly.
“These tenants can stomach the increase by becoming more efficient,” JLL SVP Seth Benhard told GlobeSt.com.
Another possibility is that they could move to a Class C space, where rents are about $40 per square foot, but it can be difficult to find decent buildings around that rate, Benhard said.
The class B market is also being impacted by the growth of co-working providers such as WeWork and Make Offices, which provide incubation opportunities for startups that will ultimately grow and transition into Class B space, Benhard also noted.
The buildings being upgraded to class A status include 2001 M St., NW, 1800 K St., NW and 1401
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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.
