Most know the Washington, D.C. metropolitan region as one of the premier gateway markets for office investment but in a time when some investors are having trouble reconciling the weak leasing environment with record pricing, we thought it would be a good time to take a look at the industrial market.
The Washington, D.C. metropolitan region’s industrial markets have benefitted from robust private sector demand, which helped fuel positive net absorption of 109,000 square feet (sf) in flex space and 108,000 sf in warehouse inventory in the third quarter of 2014, bringing the annual net absorption for all industrial product types in the region to 1.5 million square feet (msf). In warehouse space, which comprises two-thirds of the area’s industrial market, vacancy rates have essentially returned to their historical average of 9.3% following three and half years of strong, steady demand.
Western suburban Loudoun County’s warehouse space experienced the greatest net gain in occupancy within the DC region thus far in 2014, experiencing 402,000 sf of new demand driven by multiple large and mid-sized requirements. Online data storage firm, ViON Corporation signed the third quarter’s top non-renewal transaction in Loudoun County for 43,000 sf. Additional requirements by retail distribution, users related to home construction and data centers contributed positively to net absorption during the year. As of the end of the third quarter of 2014, Loudoun County warehouse market registered an overall vacancy rate of 5.4% - down 3.7 percentage points year over year and the lowest rate registered in all of the region.
By: Nathan Edwards
Director of Research, Cassidy Turley - Washington, D.C.
Email Nathan: Nathan.Edwards@cassidyturley.com
Contributor: Urmi Joshi, Senior Research Analyst, Cassidy Turley
Follow Cassidy Turley on Twitter: @CassidyTurleyRE
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