While the nation's capital continued its usual lead in office space construction, another surprise quarter occurred with the Maryland National Capital region leading the surrounding region.
According to March data from the Bethesda, Mid-Atlantic regional office of Transwestern and its research subsidiary, Alexandria-based Delta Associates, there was an estimated 7,204,726 square feet of office space under construction or reconstruction in the D.C. area.
Washington, D.C. held 2,952,274 square feet of that total. The District had an overall vacancy of 8.0 percent with the NoMa (North of Massachusetts Avenue) corridor -- an area north of Capitol Hill -- led all submarkets in the region with 1,008,817 square feet under construction or reconstruction. Projects like NPR's (National Public Radio) new headquarters and Bethesda-based StonebridgeCarras project -- One Constitution Square -- are some of the numerous projects under development. The mixed-use center is being driven by GSA leasing and has propelled NoMa to one of the larger submarkets in the city proper with nearly 13 million square feet of office space when construction is complete.
The Maryland National Capital region had 2,204,320 square feet of office space under construction or reconstruction. That was the leading amount in the surrounding area. Montgomery County took the bulk of space under construction, with a total of 1,935,558 square feet. Chevy Chase-based JBG Companies is the development firm behind several of those projects including the National Cancer Institute buildings on the campus of Johns Hopkins University and the National Institute of Allergy and Infectious Diseases (NIAID) at the Twinbrook Metro Station. Those examples show the federal government is a driver for leasing in the County as well. The U.S. Nuclear Regulatory Commission (NRC), 380,000 square foot tower is finishing up in North Bethesda; the project is being developed by LCOR. Developments for private employers include the Foulger Pratt office building at Rockville Town Center that will become the new headquarters for Choice Hotels international. Not included in Transwestern's list are projects like the headquarters for biotechnology company United Therapeutics (NASDAQ: UTHR). The estimated 200,000 square foot building is located in downtown Silver Spring.
Prince George's county pushed the Maryland National Capital Region over the 2 million mark with 268,762 square feet under construction at the M square office park outside the University of Maryland. The building is positioned for the National Oceanic Atmospheric Administration.
Northern Virginia had 2,048,132 square feet under construction or renovation with the Rosslyn-Ballston Corridor leading with 977,647 square feet of that underway. Once again the JBG companies is behind some of the largest projects, including 316,000 at 800 North Glebe Road in Ballston and Central Place in Rosslyn; a 521,000 square foot office tower that is going through prep work. Its competing development already under construction -- with a first floor above ground -- is Monday Properties' 1812 North Monroe. The 580,000 square foot, 35 story office tower is racing against Central Place to become the tallest fully occupied structure in the D.C. area.
Direct Office vacancy rates remained in the double digits for many areas across the region, around 10 percent is seen as equilibrium but many submarkets were well above that. The lowest vacancy in the region was the Capital Hill submarket with 5.6 percent. The Bethesda- Chevy Chase submarket held the lowest vacancy in the D.C. area -- outside the city proper --with 6.8%. Northern Virginia's lowest office vacancy was the Rosslyn-Ballston corridor with 8.4 percent.