prince george`s county north office submarket report

Transcription

prince george`s county north office submarket report
REAL ESTATE OUTLOOK
PRINCE GEORGE’S COUNTY NORTH
OFFICE SUBMARKET REPORT
SECOND QUARTER 2016
Office Submarket Metrics
29
95
1
BELTSVILLE
650
495
295
GREENBELT
19
3
SILVER SPRING
MD
The Prince George’s County North submarket weakened during the second
quarter of 2016, as net absorption was negative 27,000 SF and the direct
vacancy rate ticked up 20 basis points to 22.1%. This is largely due to the U.S.
Probation and Parole Office vacating 39,000 SF at 9200 Edmonston Road. The
direct vacancy rate is elevated, above the 10-year average of 17.5%. Because of
this, landlords held asking rents at $20.59 PSF as of June 2016, unchanged from
the quarter prior.
The only investment sale during the first half of 2016 occurred in June when an
undisclosed buyer purchased 7505 Greenway Center Drive in Greenbelt for just
under $1 million, or $45 PSF. In 2015, investment sales totaled $21.2 million or
$84 PSF.
16TH ST NW.
GLENN DALE
There were no new deliveries during the first half of 2016. The only delivery of
2015 occurred in the third quarter when Berman Enterprises completed a 35,000
SF office building at 1150 West Street in Laurel that is fully leased to Aquilent.
There are no notable projects under construction or renovation as of June 2016.
TAKOMA PARK
NEW CARROLLTON
HYATTSVILLE
50
OF F ICE T RENDS
10- YE A R TR E ND
SE C OND Q UART E R 2 0 1 6
INVENTORY
11.7 MSF
Office Submarket Outlook
We expect the office market to gradually improve during the second half of
2016 and into 2017 as the private sector expands. However, demand should
remain light compared to past recovery cycles as most companies will utilize
shadow space before inking new deals and those tenants taking space will
look to densify or consolidate. We expect the vacancy rate to decline through
2017, but remain elevated. Construction of new product should be limited, as
conditions do not warrant new product. However, we anticipate renovations
to older suburban product and amenities to be added to better compete for
tenants. Given current conditions, we expect rents to be constrained during
2016. Despite this current lull, this submarket should be able to work off some of
its existing inventory given the empty construction pipeline.
COLLEGE PARK
Inventory unchanged
VAC A N C Y
22.1%
Vacancy rate inches
up YTD
ABSORPTION
(139,000) SF
Weak demand
R E N TA L R AT E
$20.59 PSF
Ticks down in Q2
PRINCE GEORGE’S COUNTY NORTH OFFICE SUBMARKET
SECOND QUARTER 2016
Prince George’s County North Office Submarket Indicators
PROPERTY CLASS
Class A
Class B/C
Total
INVENTORY
UNDER
CONSTRUCTION
Q2 NET
ABSORTION
YTD NET
ABSORPTION
DIRECT
VACANCY
SUBLEASE
SPACE
OVERALL
VACANCY
AVERAGE RATE
PSF
1,263,773
0
4,000
(117,000)
12.9%
0.2%
13.1%
$25.25
10,467,303
0
(31,000)
(22,000)
23.2%
0.3%
23.5%
$19.61
11,731,076
0
(27,000)
(139,000)
22.1%
0.3%
22.4%
$20.59
SOURCE: CoStar, Transwestern.
Prince George’s County North Office Submarket Notable Lease Transactions
TENANT
Science Systems & Applications (SSAI)
DEAL TYPE
ADDRESS
SQUARE FEET
Sublease
10210 Greenbelt Road
9,000
SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern.
Prince George’s County North Office Submarket Investment Sales Activity
ADDRESS
SALE DATE
SALE PRICE
PRICE PER SF
7505 Greenway Center Dr
Jun-16
$989,992
$45
6525 Belcrest Road
Nov-15
$6,510,001
$13
4700 Berwyn House Road
Oct-15
$9,800,000
$114
3311 Toledo Road
Sep-15
$7,376,250
$41
11785 Beltsville Drive
Nov-14
$13,000,000
$62
$37,676,243
$40
Total
SOURCE: CoStar, Real Capital Analytics, Transwestern.
CONTACT
METHODOLOGY
Elizabeth Norton
Ben Fish
Managing Research Director | Mid-Atlantic
202.775.7026
elizabeth.norton@transwestern.com
Senior Research Associate | Mid-Atlantic
202.775.7048
ben.fish@transwestern.com
This report includes single-tenant, multi-tenant and
owner-user properties 15,000 SF and larger, excluding
properties owned by a government agency.
7160 Columbia Gateway Drive, Suite 210
Columbia, Maryland 21046
T 443.285.0770
www.transwestern.com
Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by
Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any
responsibility for any inaccuracy contained herein.
REAL ESTATE OUTLOOK
PRINCE GEORGE’S COUNTY
FLEX/INDUSTRIAL SUBMARKET REPORT
SECOND QUARTER 2016
Flex/Industrial Submarket Metrics
The Prince George’s County submarket improved during the second quarter
of 2016, as net absorption was 485,000 SF and the direct vacancy rate edged
down 30 basis points to 8.6%. The rate is below the 10-year average of 10.0%.
Net absorption was boosted by the owner/user purchase of 143,000 SF at 10201
Good Luck Road by WMATA, the 137,000 SF lease of 6300 Columbia Park Road
by Washington Food and Supply of Maryland, and the 117,000 SF pre-leased
delivery of 8100 Penn Randle Road to Thompson Creek Window. Net absorption
was offset by Safeway vacating 137,000 SF at 6300 Columbia Park Road and the
U.S. Department of Justice leaving over 71,000 SF at 3601 Pennsy Drive. Asking
rents edged up to $6.85 PSF at June 2016, a 1.1% increase from year-end 2015.
There were three new deliveries during the first quarter. Chesapeake Real Estate
Group delivered 167,500 SF at 8210 Penn Randle Place at 40% pre-leased and
the above mentioned 117,000 SF bulk warehouse at 8100 Penn Randle Place
to Thompson Creek Window. Atapco Properties also delivered 61,200 SF at
1001 Hampton Park Boulevard at 27% pre-leased. There are four projects in
the pipeline totaling 647,000 SF at 33% pre-leased. Most notably, Prudential
Insurance is building 236,000 SF of bulk warehouse at 13150 Mid Atlantic
Boulevard that is currently 48% pre-leased.
The investment sales market was weak during the second quarter as no
notable deals occurred. However, there were four sales during the first quarter
totaling $18.7 million, or $65 PSF. In 2015, investment sales totaled $184.6
million or $82 PSF.
32
Laurel
200
100
295
Odenton
95
3
Beltsville
Bethesda
Silver
Spring
Crofton
Greenbelt
Bowie
50
Hyattsville
97
Washington, DC
295
Suitland
301
Clinton
Brandywine
Waldorf
La Plata
F L EX/INDU S T RIA L T REND S
10- YE A R TR E ND
SE C OND Q UART E R 2 0 1 6
INVENTORY
56.5 MSF
Inventory up
Flex/Industrial Submarket Outlook
The vacancy rate should decline through 2017, as leasing activity picks up pace.
Given current conditions, we believe landlords will continue to increase asking
rents over the next 12 months. The pipeline is relatively controlled with four
projects currently under construction. As conditions improve, new development
or renovation of outdated product could increase. We also expect investment
sales activity to maintain a steady pace in the near-term, as investors with cash
seek quality assets in solid performing submarkets. This submarket is poised
to experience steady long-term growth due to the substantial inventory of
distribution centers.
VAC A N C Y
8.6%
Vacancy rate down YTD
ABSORPTION
597,000 SF
Strong demand
R E N TA L R AT E
$6.85 PSF
Edging up YTD
PRINCE GEORGE’S COUNTY FLEX/INDUSTRIAL SUBMARKET
SECOND QUARTER 2016
Prince George’s County Flex/Industrial Submarket Indicators
Total
INVENTORY
UNDER
CONSTRUCTION
Q2 NET
ABSORPTION
YTD NET
ABSORPTION
DIRECT
VACANCY
SUBLEASE
SPACE
OVERALL
VACANCY
AVERAGE RATE
PSF
56,547,849
647,000
485,000
597,000
8.6%
0.1%
8.7%
$6.85
SOURCE: CoStar, Transwestern.
Prince George’s County Flex/Industrial Submarket Notable Lease Transactions
TENANT
DEAL TYPE
ADDRESS
SQUARE FEET
Washington Food & Supply of Maryland, Inc.
New Lease
6300 Columbia Park Road
137,000
GreenDrop
New Lease
1511-1517 Cabin Branch Drive
40,000
CBH Health
New Lease
9318 Gaither Road
20,000
Central Wholesalers
New Lease
15002 Old Baltimore Pike
12,000
Triple D Delivery
New Lease
5344-5352 46th Avenue
10,000
SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern.
Prince George’s County Flex/Industrial Submarket Investment Sales Activity
ADDRESS
SALE DATE
SALE PRICE
PRICE PER SF
375 Prince Georges Boulevard
Mar-16
$3,080,000
$78
4815 Lawrence Street
Mar-16
$2,700,000
$22
8800 Lottsford Road
Mar-16
$10,100,000
$102
10207 Southard Drive
Feb-16
$2,800,000
$94
2130 Beaver Road
Dec-15
$3,500,000
$108
$22,180,000
$69
Total
SOURCE: CoStar, Real Capital Analytics, Transwestern.
CONTACT
METHODOLOGY
Elizabeth Norton
Ben Fish
Managing Research Director | Mid-Atlantic
202.775.7026
elizabeth.norton@transwestern.com
Senior Research Associate | Mid-Atlantic
202.775.7048
ben.fish@transwestern.com
This report includes single-tenant, multi-tenant and
owner-user properties 15,000 SF and larger, excluding
properties owned by a government agency.
7160 Columbia Gateway Drive, Suite 210
Columbia, Maryland 21046
T 443.285.0770
www.transwestern.com
Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by
Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any
responsibility for any inaccuracy contained herein.