Q4 2020 Suburban Maryland Market Report
Suburban Maryland continued to struggle in its recovery from the pandemic in the fourth quarter of 2020. Occupancy losses continued, marking the first time since 2014 that year-end absorption ended negative for the market. The fourth quarter saw losses measured at -244,753 SF, resulting in an annual net occupancy loss of -529,603 SF. The Biotech & Life Sciences sector, typically a bright spot for the market, saw an activity slow-down to end the year. However, the continued development and the strong, educated employee base for the industry are expected to increase leasing activity and boost the local economy for years to come. Vacancy decreased four basis points (bps) to 16.5% from Q3, though levels are expected to remain high to begin 2021 as new construction delivers with availabilities and market uncertainty continues. Asking rates did see an increase year-over-year from $27.90/SF to $28.08/SF, partly due to market forces being slower to adjust and new deliveries introducing higher quality space to the region. There is likely to be downward pressure on rents as demand for space remains low in the future.