Q1 2021 Suburban Maryland Market Report
With the federal government providing a boost, Suburban Maryland found relief in the first quarter of 2021. Overall, the submarket posted 643,976 SF of positive absorption, marking the first positive quarter since COVID-19’s impact. Leading the way was Prince George’s county with 589,306 SF of positive absorption, anchored by USCIS’s new 575,000 SF headquarters in Branch Avenue. Bethesda/Chevy Chase is another bright spot for the market, posting 207,085 SF positive absorption. However, the low-demand environment continues to cause pain for most of the Suburban Maryland market. Average direct asking rents fell to $27.96/SF, down $0.48/SF from year-ago levels. Vacancy levels continued to climb in the first quarter as well, increasing 130 basis points year-over-year to 16.8%. With another 1.6 million SF of new construction underway, these levels could rise even higher in the absence of pre-leasing and normal tenant demand. Along with the federal government, the Biotech and Life Science industries remain important near-term drivers for the Suburban Maryland office market.