Q3 2020 Suburban Maryland Market Report
Effects of COVID-19 have continued to shock the Suburban Maryland market six months post-impact in the third quarter of 2020. Given the nature of the public health crisis, Suburban Maryland’s focus on biotech/life sciences have given the market national-coverage, as local business in the I-270 corridor are working to develop a COVID-19 vaccine. Following a second-quarter trend, market uncertainty continues to strain leasing activity, recording the second-lowest quarterly activity the region has seen. Though leasing activity has continued to stay low, Suburban Maryland’s market has reacted differently compared to the District of Columbia and Northern Virginia as the majority of top transactions this quarter were new leases, not renewals. Vacancy increased to 16.9% and is expected to remain elevated through 2020 and well into 2012 due to continued economic uncertainty and new construction deliveries. Occupancy losses were measured at -363,837 SF in Q3, bringing year-to-date net growth to -284,850 SF. If occupancy losses continue through the remainder of the year as expected, year-end absorption will end at a negative, the first time since 2014. A year-end occupancy loss will show the market slowing as it is in less demand, a significant shift from the considerable growth and tenant demand Suburban Maryland has seen in recent years.