Suburban Maryland Office Market
Suburban Maryland’s net absorption totaled negative 367,200 square feet during the first quarter. Overall vacancy increased to 19.6%, up 120 basis points over the past year. After a building boom over the past five years, the pace of new construction deliveries has begun to slow, with only two office deliveries in Suburban Maryland in all of 2023 and no deliveries during the first quarter. Furthermore, only two properties remain under construction in the market, totaling 257,000 square feet. While overall asking rates increased this quarter, it is expected that they will reset in the coming quarters, as landlords are forced by liquidity constraints to trade elevated concession packages for lower rates. As in other markets, Class A and trophy space in Suburban Maryland has outperformed Class B and C space. This is illustrated in the continued increase in Class A asking rents while Class B asking rents have started to decline.