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News release


JLL: Broad Based Recovery Taking Hold Across Washington Region CRE Market

Washington region office investment sales volume up 52 percent and leasing volume showing positive growth

WASHINGTON, OCTOBER 2, 2015 – Investment sales volume for office properties in the Washington region totaled nearly $5.1 billion through the end of the third quarter of 2015, an increase of 52.3 percent year-over-year and the highest sales volume achieved since 2006, according to research analysis from JLL.

In addition, Northern Virginia, Suburban Maryland and the District of Columbia each recorded positive net leasing gains during the third quarter, marking the first time in over five years that each jurisdiction has recorded consecutive quarterly gains.

“Metro DC hit an inflection point at the start of the year, as strong employment growth drove occupancy gains throughout the regional office market,” said Scott Homa, Vice President, Research, JLL. “An uptick in tenant demand and the emergence of rent growth for the first time in years have provided a tailwind to the market, increasing both owner and investor confidence in the Washington region.”

Investment Sales
Since the start of the year, the majority of the sales volume has been concentrated in the District of Columbia, but the Rosslyn-Ballston Corridor and downtown Bethesda also saw strong sales volume:

  • Northern Virginia     $   1,757,452,817
  • Suburban Maryland $      423,971,000
  • Washington, DC       $   2,935,259,950
  • Grand Total              $   5,116,683,767

“Competition for the limited number of offerings within the District of Columbia persists, while foreign buyers remain active in the District, accounting for 63 percent of transaction volume thus far in 2015,” said Bill Prutting, Managing Director, Capital Markets, JLL.

Year-to-date pricing remains at record-high levels, averaging $714 per square foot in DC, $286 per square foot in VA and $225 per square foot in Suburban Maryland. Sales volume is expected to remain strong through the end of the year with nearly $2.5 billion in transactions expected to close before year-end.

“The sales volume in the Virginia suburbs has been particularly high this year at close to $1.7 billion and we expect another $1 billion to close before the end of the year,” added Prutting. “The improving suburban leasing market, low interest rates and availability of capital will continue to drive demand among investors for suburban Washington locations.”

Leasing Market
The majority of tenant activity year-to-date has occurred among the government, contractor, technology, nonprofit/association and healthcare/education segments and flowed into value-oriented properties in core markets and more economical enclaves in the suburbs. The U.S. Transportation Security Administration (TSA) lease in the third quarter and a series of transactions by other federal agencies, including the U.S. Marshals Service, DHS, HHS and FBI earlier this year have accounted for 36.6 percent of all transaction velocity in the Washington region leasing market.

The stats:

  • Year to date net absorption: 709,751 square feet
  • Under construction: 5,227,655 square feet
  • Preleased: 59.2%

As of the end of the third quarter, Crystal City led all Metro DC submarkets in terms of overall occupancy gains, registering 313,847 square feet of positive net absorption year-to-date. The core CBD, East End and Rosslyn-Ballston Corridor also exhibited strong activity, as well as the future Silver Line Phase 2 corridor along the Dulles Toll Road. 


“When we see a resurgence in leasing activity in markets such as Crystal City and enclaves outside the Capital Beltway, we know we’re in the midst of a broad-based recovery,” Homa added. “Typically the Metro DC market tightens from the inside-out, so to see tenant demand radiate so far outside the urban core is a testament to the improving market conditions we continue to witness downtown.”

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit