Washington, D.C. Retail Market Report
Second Quarter 2018
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Jobs Bring New Retail Customers; Trading Activity Highest in the District

Positive demand continues amid more construction.Employers will fill 40,000 positions in 2018, despite a low unemployment rate of 3.5 percent, by drawing from the 17,000 new residents moving into the area. The growing number of consumers will help retail sales improve 5.3 percent this year, motivating some retailers to acquire more space. Over 360,000 square feet of space has been leased in East Falls Church alone this year. Construction activity will also absorb some of this demand. North Prince George’s County will welcome its first Whole Foods as part of a 77,000-square-foot shopping center under construction in College Park. Dulles International Airport also has 237,000 square feet nearing completion in its general vicinity, the most for any submarket.

Rent appreciation passes last year while vacancy ticks up.Leasing activity will not surpass this year’s construction pipeline, leading to a small increase in the market’s vacancy rate. At just over 5 percent, this measure is still fairly tight, with specific submarkets reporting sub-3 percent vacancy. In other submarkets where the rate is higher, including in Frederick, vacancy is declining. High demand in such areas is pushing the metro’s average marketed rental rate up at a pace well above that observed at the end of 2017.