In the D.C. Metro area, the average price per square foot for office properties is on the rise, while sales volume is down quarter-over-quarter, according to COMMERCIALCafé’s latest report.
For the second quarter of 2017, the average price per square foot was $339, while the third quarter was $538, which is a 7 percent increase year-over-year.
In comparison to the Q3 2016 to Q4 2016 rise in price (33.15 percent quarter-over-quarter), 7 percent isn’t so huge, especially when the Q4 2016 to Q1 2017 average dropped by 24.53 percent quarter-over-quarter.
For the first quarter of 2017, over $2.3 billion worth of office properties changed hands, while the following quarter’s sales volume dropped to a little over $1.2 billion, a 78.01 percent quarter-over-quarter drop and a 32.13 percent year-over-year increase.
COMMERCIALCafé reported, “Q2 2016 was one of the market’s weakest quarters and well below the average of the past five years. Nonetheless, the drop in both sales volume and total square footage should be no cause for concern, given the way the market has fluctuated in the past.”
The two most major office transactions that occurred in the District during the second quarter of 2017 included the $259 million sale of 1325 and 1341 G Street NW and the $135 million sale of Watergate 600. For the biggest office development that came online in D.C. during that quarter, COMMERCIALCafé reported that it was the 241,873-square-foot Uline Arena.
For the third quarter of 2017, 2.1 million square feet of office space is expected to come online. One of the largest projects expected to complete in D.C. proper during this quarter is the 235,259-square-foot mid-rise at 2000 K Street NW by developer Tishman Speyer.
When compiling these findings, COMMERCIALCafé only looked at office buildings with at least 50,000 square feet and transactions that were over $5 million. All transactions researched were recorded until July 19, 2017. Any ownership stake, ground lease, controlling interest, and portfolio deals were excluded from the calculation of the average price per square foot. Yardi Matrix gathered the data.
For a deeper look into the data, head to COMMERCIALCafé’s report here.
• DC Metro Office Sales Cool Down in Q2 [COMMERCIALCafé]
• Atlantic Media owner selling Watergate building for $135M [Curbed DC]