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Market Report

Washington, D.C. Industrial

Second Half 2019

Lack of Space Limits Construction and Investment Options, Driving Strong Rent and Sale Price Appreciation

 

Less development contributes to stronger performance in Maryland and the District. A growing population and diversifying economy sustain demand for industrial properties in and around Washington, D.C. Manufacturers, logistics companies and other firms are moving into spaces across the market, including near Dulles International Airport, along the I-95 and I-270 corridors, and outside Landover. Less recent construction activity in Suburban Maryland, where roughly half as much space has opened since 2010 as in Northern Virginia, is contributing to lower vacancy in the area. An exception is Washington County, where the upcoming arrival of a 1.2 million-square-foot warehouse, the largest delivery of the year, will add upward pressure to availability. Other notable 2019 completions include several properties near the Route 28 Corridor, each spanning more than 100,000 square feet. These and other openings will place downward pressure on asking rents, particularly in Northern Virginia, while the lack of available space inside the District continues to drive marketed rates up by more than 10 percent annually, which will lift the overall metro average this year.

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