WASHINGTON, DC–Office development in 2018 will be focused on suburban areas and the Washington DC area will be among the top markets for this activity, according to a new study by Yardi Systems.
Overall, it reports, close to 35 million square feet of office space will be delivered to the suburbs in 2018, compared to 24 million square feet underway in urban areas, and 15 million square feet headed for the central business districts for a total of 57.8 million square feet. The reason for the shift to the suburbs is that space is either at a premium or in scarce supply in CBDs.
With 3.7 million square feet of development scheduled for delivery, the Washington DC-Maryland area is counted among the top five regions in the nation, according to Yardi Systems' ranking. Separately, Northern Virginia is expected to deliver 1.37 million square feet.
No. 1 is California's Bay Area at 5.9 million square feet. Other leading cities are Texas' Dallas-Fort Worth at 5 million square feet, Austin at 2 million square feet and San Francisco at 1.7 million square feet.
At city-level, New York City and San Francisco hold the top positions, while Washington DC comes in third. Midtown Center is scheduled to add the largest amount of office space in the city with 818,000 square feet of the total 3.7 million estimated to be delivered next year.
The report also notes that of Northern Virginia's 1.3 million square feet, only 437,000 will be competitive on the market — Capital One's HQ II will occupy the remaining 940,000.
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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.
