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Lease expirations in the CBD’s most competitive towers set for spike in 2020 and 2024 there after

  • ​A law firm relocation to a new tower in 2015 (Gateway Plaza), combined with several law firm downsizes, reset market fundamentals in the CBD, giving tenants the upper hand during lease negotiations.
  • A wave of new-to-market and expansionary leasing from both the public and private sectors absorbed a substantial amount of vacant space in the CBD, over 400,000 square feet since 2016. 
  • Past and ongoing conversions of historic, but functionally office towers also removed a large portion of non-competitive, Class C office space Downtown.
  • With lease expirations at a minimum until 2023, new construction is the greatest threat capable of shifting leverage back to tenants Downtown, and only two towers have been delivered in the leasable inventory since 2010 (Williams Mullen Center and Gateway Plaza).
  • Near-term disruptors include a 160,000-square-foot lease expiration in 2020 and Dominion Energy’s decision to build a second tower in 2019, possibly vacating their Class B, owner-occupied tower at 705 E Main Street.

Source: JLL Research​

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