At the end of the third quarter, overall availability in the District increased to 14.2% - its highest point in the last eight quarters. Unsurprisingly, construction activity is also at a peak, with the largest amount of space currently under construction since 2009. This flux of activity is directly contributing to the increase in availability and options for tenants currently in the market. With nearly one million square feet (MSF) already delivered so far this year, what else is on the horizon?
Breaking down the pipeline
A handful of large deliveries have completed this year including new developments like Uline NoMa, 800 Maine Avenue SW at The Wharf and 1000 F Street NW. Additionally, significant repositionings including 900 19th Street NW and 2000 K Street NW, have also come online. To date, only 31% of 2017 deliveries have been preleased. However, with Fannie Mae’s new headquarters as well as the DC Bar’s new building slated to deliver by year-end, the anticipated 2017 total of deliveries is 2.2 MSF, which will be 53% preleased at completion.
In total, 8.4 MSF of newly constructed or redeveloped space is anticipated to deliver by the end of 2019 alone. This includes 3.6 MSF in 2018, and projects such as 2112 Pennsylvania Avenue NW, Alexander Court and 655 New York Avenue NW. An additional 2.5 MSF is planned for 2019, including 1301 Pennsylvania Avenue NW and 1900 N Street NW, among others. Of this 8.4 MSF, 54% in total has already been spoken for.
With a significant number of these developments being redevelopments, the overall net new impact on office inventory is 5.7 MSF of additional space. New construction is certainly a top option amongst larger tenants seeking greater efficiencies and quality, but with 46% of development unleased, we can expect to see availability continue to climb in the near future.
DC Under Construction, New Deliveries and Availability
DC Construction and Preleasing 2017-2019