Suburban Maryland Office Market
|Average Asking Rent (Price/SF)|| $29.23|
|Vacancy Rate (%)|| 16.0%|
|Net Absorption (SF)|
Demand for office space in Suburban Maryland softened during the second quarter of 2021. Net absorption totaled -277,919 square feet. As an ongoing result of disruption related to COVID-19, leasing activity was limited. The overall vacancy rate was 16.0% at the end of the second quarter, an increase of 30 basis points from the previous quarter and an increase of 200 basis points from a year ago. Vacancy will likely continue to increase in the latter part of 2021, as 380,000 square feet is scheduled to deliver in the third quarter with 0.0% preleased. The average asking rental rate ended the second quarter at $29.23/SF, an increase of 2.0% from $28.67/SF in the second quarter of 2020. While it may seem counterintuitive that asking rents continued to increase despite occupancy losses, the construction pipeline and recently delivered product includes high-quality space with asking rates that match the quality, which boosts the average asking rent. By contrast, effective rents are under downward pressure as concessions remain high to lure tenants in an environment of tepid demand.