CBRE Sees Persistent Lag in Leasing Velocity, CBRE, June 25, 2013

Key points:

• Vacancies are up--and set an all-time record in NoVa of 16.2%.
• Leasing activity is down 25% from a year ago.
• Rents are down $1-$2 per SF--especially along the DTR.
• DENSIFICATION--fewer square feet per worker--continues inexorably as we've been saying.

Here are some excerpts from the CBRE report:

As the second quarter of 2013 draws to a close, early indicators suggest that the Washington metropolitan region remains a “tenants’ market” fueled by limited leasing activity and rising vacancies.  While the overall economy continues to show positive markers, office markets in the District, Northern Virginia and Suburban Maryland remain stalled in a period of listless activity, dampened by a push for greater office efficiencies and federal budget concerns. . .

Prior to publication of CBRE’s quarterly reports, office leasing velocity throughout the metropolitan Washington region remains relatively unchanged compared to the first quarter of 2013, but is down 25 percent from the second quarter of last year.  The region is experiencing a relatively stable employment picture, although the drive toward workplace efficiencies means fewer square feet per office worker, which translates to lower net demand for office space. . . .

In Northern Virginia, the vacancy rate rose to 16.2 percent, surpassing the previous high of 16 percent in 2002, driven by tenant moves and consolidations. Rents in Northern Virginia decreased $1 to $2 per square foot, especially along the Dulles Toll Road. . . .

Here is the full CBRE 2Q preview press release.

Wonder what the full set of numbers will show in the weeks ahead.