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.”