WASHINGTON, DC–Private sector companies have many more options in the District when considering where to locate their office — and they are treating these new options as serious possibilities, according to a new analysis by JLL.
In the past, the choice simple: a 15-block range in the CBD and East End. From 2011 to 2014, JLL notes that there were 29 private sector relocations greater than 40,000 square feet in the CBD and East End. Contrast that with the time period from 2015 to today: the number of relocations in the CBD and East End jumped to 36, a 24% increase. Of the 17 relocations in the CBD since 2015, seven were tenants previously located in the East End with six of those relocations to new construction.
JLL also noted that one of the more significant trends in the office market is that tenants across all industries are expanding their geographic boundaries. From 2011 to 2014, there were seven private sector relocations greater than 40,000 square feet in the non-core submarkets. In the past 40 months, relocations more than doubled to 16 with Southwest posting the most with four private sector relocations since 2015.
JLL writes:
With new construction options outside of the Wharf offering a 30% rent discount to the core and relet Class A options offering a 25% discount to the core, non-core submarkets have become an increasingly viable option for many companies as they evaluate their real estate decision and that trend will only gain steam as markets like the Yards and Market District deliver their first office product ahead.
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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.
