costar dc office market report 2010

8/7/2019 Costar DC office market report 2010

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Washington, D.C. Office MarketY E A R - E N D 2 0 1 0

The CoStar

Office Report


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Washington, D.C. Office Market

2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT A

YEAR-END 2010 WASHINGTON, D.C

Table of ContentsTable of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B

Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C

Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CoStar Markets & Submarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Employment & Tenant Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Employment & Unemployment AnalysisTenant Profiles

Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Construction Activity MapInventory & Development AnalysisSelect Top DeliveriesSelect Top Under Construction Properties

Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Figures at a Glance by Class & Market

Figures at a Glance by Class & SubmarketFigures at a Glance Grouped by CBD vs SuburbanHistorical Figures at a Glance

Leasing Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Leasing Activity MapLeasing Activity AnalysisSelect Top Lease Transactions

Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Sales Activity AnalysisSelect Top Sales Transactions

Analysis of Individual CoStar Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Select Same Building Sales

Select Land SalesAlexandria/I-395 Area MarketBethesda/Chevy Chase MarketCapitol Hill Area MarketDowntown DC MarketDulles Corridor MarketE Prince Georges County MarketEast Falls Church MarketFrederick MarketGeorgetown/Uptown MarketGreater Fairfax County MarketI-270 Corridor MarketLeesburg/Route 7 Corridor MarketManassas/Route 29/I-66 MarketN Prince Georges County MarketNortheast/Southeast MarketR-B Corridor MarketS Prince Georges County MarketSE Fairfax County MarketSE Montgomery County MarketWinchester City MarketWoodbridge/I-95 Corridor Market


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B THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.

WASHINGTON, D.C. YEAR-END 2010

Methodology

The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStarGroups entire database of existing and under construction office buildings in each metropolitan area.Included are office, office condominium, office loft, office medical, all classes and all sizes, and bothmulti-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's nationaldatabase includes approximately 71.7 billion square feet of coverage in 3 million properties. All rentalrates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.

Copyright 2010 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of theinformation contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness orcompleteness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations orwarranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

CoStar Group, Inc.

1331 L ST NW Washington, DC USA 20005 (800) 204-5960 www.costar.com NASDAQ: CSGP

For information on subscribing to CoStars other products and services, please contact us at

1-877-7COSTAR, or visit our web site at www.costar.com


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2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C


Terms & Definitions

Availability Rate: The ratio of available space to total rentablespace, calculated by dividing the total available square feet by thetotal rentable square feet.

Available Space: The total amount of space that is currentlybeing marketed as available for lease in a given time period. Itincludes any space that is available, regardless of whether thespace is vacant, occupied, available for sublease, or available ata future date.

Build-to-Suit: A term describing a particular property, developedspecifically for a certain tenant to occupy, with structural features,systems, or improvement work designed specifically for the needsof that tenant. A build-to-suit can be leased or owned by the ten-ant. In a leased build-to-suit, a tenant will usually have a longterm lease on the space.

Buyer: The individual, group, company, or entity that has pur-chased a commercial real estate asset.

Cap Rate: Short for capitalization rate. The Cap Rate is a calcula-tion that reflects the relationship between one years net operating

income and the current market value of a particular property.The Cap Rate is calculated by dividing the annual net operatingincome by the sales price (or asking sales price).

CBD: Abbreviation for Central Business District. (See also:Central Business District)

Central Business District: The designations of Central BusinessDistrict (CBD) and Suburban refer to a particular geographic areawithin a metropolitan statistical area (MSA) describing the levelof real estate development found there. The CBD is characterizedby a high density, well organized core within the largest city of agiven MSA.

Class A: A classification used to describe buildings that generallyqualify as extremely desirable investment-grade properties andcommand the highest rents or sale prices compared to otherbuildings in the same market. Such buildings are well locatedand provide efficient tenant layouts as well as high quality, and insome buildings, one-of-a-kind floor plans. They can be an archi-tectural or historical landmark designed by prominent architects.These buildings contain a modern mechanical system, and haveabove-average maintenance and management as well as the bestquality materials and workmanship in their trim and interior fit-tings. They are generally the most attractive and eagerly soughtby investors willing to pay a premium for quality.

Class B: A classification used to describe buildings that generallyqualify as a more speculative investment, and as such, commandlower rents or sale prices compared to Class A properties. Suchbuildings offer utilitarian space without special attractions, andhave ordinary design, if new or fairly new; good to excellentdesign if an older non-landmark building. These buildings typical-ly have average to good maintenance, management and tenants.They are less appealing to tenants than Class A properties, andmay be deficient in a number of respects including floor plans,

condition and facilities. They lack prestige and must dependchiefly on a lower price to attract tenants and investors.

Class C: A classification used to describe buildings that gener-ally qualify as no-frills, older buildings that offer basic space andcommand lower rents or sale prices compared to other buildingsin the same market. Such buildings typically have below-averagemaintenance and management, and could have mixed or lowtenant prestige, inferior elevators, and/or mechanical/electricalsystems. These buildings lack prestige and must depend chieflyon a lower price to attract tenants and investors.

Construction Starts: Buildings that began construction during aspecific period of time. (See also: Deliveries)

Contiguous Blocks of Space: Space within a building that is, or isable to be joined together into a single contiguous space.

Deliveries:Buildings that complete construction during a specifiedperiod of time. In order for space to be considered delivered, acertificate of occupancy must have been issued for the property.

Delivery Date: The date a building completes construction andreceives a certificate of occupancy.

Developer:The company, entity or individual that transforms rawland to improved property by use of labor, capital and entrepre-neurial efforts.

Direct Space: Space that is being offered for lease directly fromthe landlord or owner of a building, as opposed to space beingoffered in a building by another tenant (or broker of a tenant)trying to sublet a space that has already been leased.

Existing Inventory: The square footage of buildings that havereceived a certificate of occupancy and are able to be occupiedby tenants. It does not include space in buildings that are eitherplanned, under construction or under renovation.

Flex Building: A type of building designed to be versatile, whichmay be used in combination with office (corporate headquarters),

research and development, quasi-retail sales, and including butnot limited to industrial, warehouse, and distribution uses. A typi-cal flex building will be one or two stories with at least half of therentable area being used as office space, have ceiling heights of 16feet or less, and have some type of drive-in door, even though thedoor may be glassed in or sealed off.

Full Service Rental Rate: Rental rates that include all operatingexpenses such as utilities, electricity, janitorial services, taxes andinsurance.

Gross Absorption: The total change in occupied space over agiven period of time, counting space that is occupied but notspace that is vacated by tenants. Gross absorption differs fromleasing Activity, which is the sum of all space leased over a certainperiod of time. Unless otherwise noted Gross Absorption includesdirect and sublease space.

Growth in Inventory: The change in size of the existing squarefootage in a given area over a given period of time, generally dueto the construction of new buildings.

Industrial Building: A type of building adapted for such uses asthe assemblage, processing, and/or manufacturing of productsfrom raw materials or fabricated parts. Additional uses includewarehousing, distribution, and maintenance facilities. The pri-mary purpose of the space is for storing, producing, assembling,or distributing product.

Landlord Rep: (Landlord Representative) In a typical lease trans-action between an owner/landlord and tenant, the broker thatrepresents the interests of the owner/landlord is referred to as theLandlord Rep.

Leased Space: All the space that has a financial lease obligation.It includes all leased space, regardless of whether the space is

currently occupied by a tenant. Leased space also includes spacebeing offered for sublease.

Leasing Activity: The volume of square footage that is commit-ted to and signed under a lease obligation for a specific buildingor market in a given period of time. It includes direct leases,subleases and renewals of existing leases. It also includes anypre-leasing activity in planned, under construction, or underrenovation buildings.

Market: Geographic boundaries that serve to delineate core areasthat are competitive with each other and constitute a generallyaccepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographicdesignations having a cumulative sum that matches the boundar-ies of the entire Region (See also: Region). Markets can be furthersubdivided into Submarkets. (See also: Submarkets)


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D THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.


Multi-Tenant: Buildings that house more than one tenant at agiven time. Usually, multi-tenant buildings were designed andbuilt to accommodate many different floor plans and designs fordifferent tenant needs. (See also: Tenancy).

Net Absorption: The net change in occupied space over a givenperiod of time. Unless otherwise noted Net Absorption includes

direct and sublease space.Net Rental Rate: A rental rate that excludes certain expenses thata tenant could incur in occupying office space. Such expensesare expected to be paid directly by the tenant and may includejanitorial costs, electricity, utilities, taxes, insurance and otherrelated costs.

New Space: Sometimes called first generation space, refers tospace that has never been occupied and/or leased by a tenant.

Occupied Space: Space that is physically occupied by a tenant.It does not include leased space that is not currently occupiedby a tenant.

Office Building: A type of commercial building used exclusivelyor primarily for office use (business), as opposed to manufactur-ing, warehousing, or other uses. Office buildings may sometimeshave other associated uses within part of the building, i.e., retail

sales, financial, or restaurant, usually on the ground floor.Owner: The company, entity, or individual that holds title on agiven building or property.

Planned/Proposed: The status of a building that has beenannounced for future development but not yet startedconstruction.

Preleased Space: The amount of space in a building that has beenleased prior to its construction completion date, or certificate ofoccupancy date.

Price/SF: Calculated by dividing the price of a building (eithersales price or asking sales price) by the Rentable Building Area(RBA).

Property Manager: The company and/or person responsible forthe day-to-day operations of a building, such as cleaning, trashremoval, etc. The property manager also makes sure that the vari-ous systems within the building, such as the elevators, HVAC, andelectrical systems, are functioning properly.

Quoted Rental Rate: The asking rate per square foot for a par-ticular building or unit of space by a broker or property owner.Quoted rental rates may differ from the actual rates paid bytenants following the negotiation of all terms and conditions ina specific lease.

RBA: Abbreviation for Rentable Building Area. (See also:Rentable Building Area)

Region: Core areas containing a large population nucleus, thattogether with adjacent communities have a high degree of eco-nomic and social integration. Regions are further divided intomarket areas, called Markets. (See also: Markets)

Relet Space: Sometimes called second generation or direct space,

refers to existing space that has previously been occupied byanother tenant.

Rentable Building Area: (RBA) The total square footage of abuilding that can be occupied by, or assigned to a tenant for thepurpose of determining a tenants rental obligation. GenerallyRBA includes a percentage of common areas including all hall-ways, main lobbies, bathrooms, and telephone closets.

Rental Rates: The annual costs of occupancy for a particularspace quoted on a per square foot basis.

Sales Price: The total dollar amount paid for a particular propertyat a particular point in time.

Sales Volume: The sum of sales prices for a given group of build-ings in a given time period.

Seller: The individual, group, company, or entity that sells a par-ticular commercial real estate asset.

SF: Abbreviation for Square Feet.

Single-Tenant: Buildings that are occupied, or intended to beoccupied by a single tenant. (See also: Build-to-suit and Tenancy)

Sublease Space: Space that has been leased by a tenant and isbeing offered for lease back to the market by the tenant withthe lease obligation. Sublease space is sometimes referred to assublet space.

Submarkets: Specific geographic boundaries that serve to delin-eate a core group of buildings that are competitive with eachother and constitute a generally accepted primary competitiveset, or peer group. Submarkets are building type specific (office,industrial, retail, etc.), with distinct boundaries dependent ondifferent factors relevant to each building type. Submarkets arenon-overlapping, contiguous geographic designations having acumulative sum that matches the boundaries of the Market theyare located within (See also: Market).

Suburban: The Suburban and Central Business District (CBD)designations refer to a particular geographic area within a metro-politan statistical area (MSA). Suburban is defined as including all

office inventory not located in the CBD. (See also: CBD)Tenancy: A term used to indicate whether or not a building isoccupied by multiple tenants (See also: Multi-tenant) or a singletenant. (See also: Single-tenant)

Tenant Rep: Tenant Rep stands for Tenant Representative. In atypical lease transaction between an owner/landlord and tenant,the broker that represents the interests of the tenant is referred toas a Tenant Rep.

Time On Market: A measure of how long a currently availablespace has been marketed for lease, regardless of whether it isvacant or occupied.

Under Construction: The status of a building that is in the processof being developed, assembled, built or constructed. A building isconsidered to be under construction after it has begun construc-tion and until it receives a certificate of occupancy.

Vacancy Rate: A measurement expressed as a percentage of thetotal amount of physically vacant space divided by the totalamount of existing inventory. Under construction space generallyis not included in vacancy calculations.

Vacant Space: Space that is not currently occupied by a tenant,regardless of any lease obligation that may be on the space.Vacant space could be space that is either available or not avail-able. For example, sublease space that is currently being paid forby a tenant but not occupied by that tenant, would be consideredvacant space. Likewise, space that has been leased but not yetoccupied because of finish work being done, would also be con-sidered vacant space.

Weighted Average Rental Rate: Rental rates that are calculated byfactoring in, or weighting, the square footage associated with eachparticular rental rate. This has the effect of causing rental rates

on larger spaces to affect the average more than that of smallerspaces. The weighted average rental rate is calculated by takingthe ratio of the square footage associated with the rental rate oneach individual available space to the square footage associatedwith rental rates on all available spaces, multiplying the rental rateby that ratio, and then adding together all the resulting numbers.Unless specifically specified otherwise, rental rate averages includeboth Direct and Sublet available spaces.

Year Built: The year in which a building completed constructionand was issued a certificate of occupancy.

YTD: Abbreviation for Year-to-Date. Describes statistics that arecumulative from the beginning of a calendar year through what-ever time period is being studied.


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2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 1

OVERVIEW

Washingtons Vacancy Decreases to 12.9%Net Absorption Positive 1,552,152 SF in the Quarter

The Washington Office market ended the fourth quarter

2010 with a vacancy rate of 12.9%. The vacancy ratewas down over the previous quarter, with net absorp-

tion totaling positive 1,552,152 square feet in the fourth quarter.Vacant sublease space decreased, ending the quarter at 4,492,747square feet. The average asking rental rate ended the fourth quar-ter at $33.72, a decrease over the previous quarter. A total of twobuildings, totaling 41,000 square feet, delivered to the market inthe quarter, with 3,409,282 square feet still under construction.

AbsorptionNet absorption for the overall Washington office market was

positive 1,552,152 square feet in the fourth quarter 2010. Thatcompares to positive 1,267,671 square feet in the third quarter2010, positive 1,602,294 square feet in the second quarter 2010and positive 986,185 square feet in the first quarter 2010.

Tenants moving out of large blocks of space in 2010 include:Federal Trade Commission moving out of 364,469 square feet at601 New Jersey Ave NW; Northrop Grumman Mission Systemsmoving out of 312,672 square feet at One Reston Overlook; andDickstein Shapiro LLP moving out of 304,200 square feet atInternational Square 3.

Tenants moving into large blocks of space in 2010 include:The United States Department of Justice moving into 579,776square feet at Two Constitution Square; U.S. Department ofAgriculture moving into 332,665 square feet at Patriots Plaza

III; and General Services Administration/Region 11 moving into330,000 square feet at Constitution Square.

The Class-A office market recorded net absorption of posi-tive 1,571,761 square feet in the fourth quarter 2010, compared

to positive 1,247,535 square feet in the third quarter 2010, posi-

tive 2,045,320 in the second quarter 2010 and positive 900,465in the first quarter 2010.

The Class-B office market recorded net absorption of nega-tive (86,549) square feet in the fourth quarter 2010, compared topositive 175,481 square feet in the third quarter 2010, negative(354,614) in the second quarter 2010 and positive 74,175 in thefirst quarter 2010.

The Class-C office market recorded net absorption of posi-tive 66,940 square feet in the fourth quarter 2010 compared tonegative (155,345) square feet in the third quarter 2010, negative(88,412) in the second quarter 2010 and positive 11,545 in thefirst quarter 2010.

Net absorption for Washingtons central business districtwas positive 799,472 square feet in the fourth quarter 2010.That compares to positive 624,623 square feet in the third quarter2010, positive 864,863 in the second quarter 2010 and positive837,623 in the first quarter 2010.

Net absorption for the suburban markets was positive752,680 square feet in the fourth quarter 2010. That comparesto positive 643,048 square feet in third quarter 2010, positive737,431 in the second quarter 2010, and positive 148,562 in thefirst quarter 2010.

VacancyThe office vacancy rate in the Washington market area

decreased to 12.9% at the end of the fourth quarter 2010. Thevacancy rate was 13.2% at the end of the third quarter 2010,13.4% at the end of the second quarter 2010 and 13.3% at theend of the first quarter 2010.

Vacancy Rates by Class 1993-2010

Source: CoStar Property

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A B C Total Market


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2 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.


Washington, D.C. Office MarketOVERVIEW

Class-A projects reported a vacancy rate of 14.9% at the endof the fourth quarter 2010, 15.5% at the end of the third quarter2010, 15.9% at the end of the second quarter 2010 and 16.0%at the end of the first quarter 2010.

Class-B projects reported a vacancy rate of 11.0% at the end

of the fourth quarter 2010, 10.9% at the end of the third quarter2010, 11.0% at the end of the second quarter 2010 and 10.8%at the end of the first quarter 2010.

Class-C projects reported a vacancy rate of 7.8% at the endof the fourth quarter 2010, 8.0% at the end of third quarter 2010,7.6% at the end of the second quarter 2010 and 7.5% at the endof the first quarter 2010.

The overall vacancy rate in Washingtons central businessdistrict at the end of the fourth quarter 2010 decreased to 11.0%.The vacancy rate was 11.5% at the end of the third quarter 2010,11.8% at the end of the second quarter 2010 and 11.4% at theend of the first quarter 2010.

The vacancy rate in the suburban markets decreased to13.7% in the fourth quarter 2010. The vacancy rate was 14.0%at the end of the third quarter 2010, 14.1% at the end of thesecond quarter 2010 and 14.2% at the end of the first quarter2010.

Largest Lease SigningsThe largest lease signings occurring in 2010 included:

the 1,000,000-square-foot lease signed by Security ExchangeCommission at Constitution Center in the Capitol Hill Areamarket; the 801,550-square-foot deal signed by U.S. DepartmentOf Health and Human Services at 5600 Fishers Lane in the I-270 Corridor market; and the 655,001-square-foot lease signedby Department of Defense Medical Command at Melpar OfficeComplex in the Greater Fairfax County market.

Sublease VacancyThe amount of vacant sublease space in the Washington

market decreased to 4,492,747 square feet by the end of the

fourth quarter 2010, from 4,946,318 square feet at the end of thethird quarter 2010. There was 5,339,657 square feet vacant athe end of the second quarter 2010 and 5,563,958 square feet atthe end of the first quarter 2010.

Washingtons Class-A projects reported vacant sublease

space of 3,477,108 square feet at the end of fourth quarter 2010down from the 3,824,656 square feet reported at the end of thethird quarter 2010. There was 4,001,129 square feet of subleasespace vacant at the end of the second quarter 2010 and 4,209,996square feet at the end of the first quarter 2010.

Class-B projects reported vacant sublease space of 971,435square feet at the end of the fourth quarter 2010, down fromthe 1,061,444 square feet reported at the end of the third quar-ter 2010. At the end of the second quarter 2010 there were1,252,595 square feet, and at the end of the first quarter 2010there was 1,266,474 square feet vacant.

Class-C projects reported decreased vacant sublease space

from the third quarter 2010 to the fourth quarter 2010. Subleasevacancy went from 60,218 square feet to 44,204 square feet during that time. There was 85,933 square feet at the end of thesecond quarter 2010 and 87,488 square feet at the end of the firstquarter 2010.

Sublease vacancy in Washingtons central business districtstood at 1,528,383 square feet at the end of the fourth quarter2010. It was 1,574,815 square feet at the end of the third quarter2010, 1,808,099 square feet at the end of the second quarter 2010and 1,675,651 square feet at the end of the first quarter 2010.

Sublease vacancy in the suburban markets ended the fourthquarter 2010 at 2,964,364 square feet. At the end of the third

quarter 2010 sublease vacancy was 3,371,503 square feet, was3,531,558 square feet at the end of the second quarter 2010 andwas 3,888,307 square feet at the end of the first quarter 2010.

Rental RatesThe average quoted asking rental rate for available office

space, all classes, was $33.72 per square foot per year at the endof the fourth quarter 2010 in the Washington market area. Thisrepresented a 0.6% decrease in quoted rental rates from the endof the third quarter 2010, when rents were reported at $33.94per square foot.

The average quoted rate within the Class-A sector was$37.88 at the end of the fourth quarter 2010, while Class-B rate

stood at $27.58, and Class-C rates at $24.46. At the end of thethird quarter 2010, Class-A rates were $38.21 per square footClass-B rates were $27.49, and Class-C rates were $24.06.

The average quoted asking rental rate in Washingtons CBDwas $48.62 at the end of the fourth quarter 2010, and $28.05in the suburban markets. In the third quarter 2010, quoted rateswere $48.43 in the CBD and $27.84 in the suburbs.

Deliveries and ConstructionDuring the fourth quarter 2010, two buildings totaling

U.S. Vacancy ComparisonPast 10 Quarters


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Washington, D.C. United States


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OVERVIEW

41,000 square feet were completed in the Washington marketarea. This compares to four buildings totaling 589,536 squarefeet that were completed in the third quarter 2010, nine buildingstotaling 2,187,656 square feet completed in the second quarter2010 and 1,552,487 square feet in 10 buildings completed in the

first quarter 2010.There were 3,409,282 square feet of office space under con-

struction at the end of the fourth quarter 2010.Some of the notable 2010 deliveries include: Two

Constitution Square, a 589,088-square-foot facility that deliv-ered 100% occupied in second quarter 2010; and Air and SpaceMuseum Parkway, a 525,000-square-foot building that delivered100% occupied in second quarter 2010.

The largest projects underway at the end of fourth quarter2010 were Square 54, a 432,900-square-foot building with 71%of its space pre-leased, and 1015 Half St SE, a 414,029-square-foot facility that is completely available.

InventoryTotal office inventory in the Washington market area

amounted to 452,236,411 square feet in 9,533 buildings as ofthe end of the fourth quarter 2010. The Class-A office sector con-sisted of 246,492,839 square feet in 1,351 projects. There were4,524 Class-B buildings totaling 168,010,360 square feet, and theClass-C sector consisted of 37,733,212 square feet in 3,658 build-ings. Within the Office market there were 208 owner-occupiedbuildings accounting for 19,307,169 square feet of office space.

Sales ActivityTallying office building sales of 15,000 square feet or larger,

Washington office sales figures fell during the third quarter 2010in terms of dollar volume compared to the second quarter of2010.

In the third quarter, 18 office transactions closed with a totalvolume of $727,147,433. The 18 buildings totaled 2,676,648square feet and the average price per square foot equated to$271.66 per square foot. That compares to 24 transactions total-ing $1,433,976,609 in the second quarter 2010. The total square

footage in the second quarter was 3,733,271 square feet for anaverage price per square foot of $384.11.Total office building sales activity in 2010 was up compared

to 2009. In the first nine months of 2010, the market saw 58office sales transactions with a total volume of $2,535,470,327The price per square foot averaged $308.76. In the same first ninemonths of 2009, the market posted 34 transactions with a totavolume of $1,410,688,666. The price per square foot averaged$311.78.

Cap rates have been lower in 2010, averaging 7.01% compared to the same period in 2009 when they averaged 8.33%.

One of the largest transactions that has occurred within thelast four quarters in the Washington market is the sale of TwoConstitution Square in Washington. This 589,088-square-footoffice building sold for $305,000,000, or $517.75 per squarefoot. The property sold on 6/24/2010, at a 6.30% cap rate.

Reports compiled by: Robert Hartley CoStar Senior Research Manager.

Absorption & DeliveriesPast 10 Quarters


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CoStar Markets & Submarkets

In analyzing metropolitan areas in the U.S., CoStar has developed geographic designations to help group properties together, calledRegions, Markets and Submarkets. Regions are the equivalent of metropolitan areas, or areas containing a large population nucleus,that together with adjacent communities have a high degree of economic and social integration. Regions are then divided intoMarkets, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attractingand keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core groupof buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.

MARKETS

Markets Submarkets

Alexandria/I-395 Area Crystal City Eisenhower Ave Corridor I-395 Corridor Old Town AlexandriaPentagon City

Bethesda/Chevy Chase Bethesda/Chevy Chase

Capitol Hill Area Capitol Hill* Capitol Riverfront NoMa* Southwest*

Downtown DC CBD* East End* West End*

Dulles Corridor Great Falls Herndon Reston Route 28 Corridor NorthRoute 28 Corridor South

E Prince Georges County Bowie Greater Upper Marlboro

East Falls Church N Arlington/E FallsChurch

Frederick Frederick

Georgetown/Uptown Georgetown* Uptown*

Greater Fairfax County Annandale Fairfax Center Fairfax City Falls ChurchMcLean Merrifield Oakton Tysons CornerVienna

I-270 Corridor Gaithersburg Germantown I-270 Corridor North North Bethesda/PotomacNorth Rockville Rockville

Leesburg/Route 7 Corridor Leesburg/West Loudoun Route 7 Corridor

Manassas/Route 29/I-66 Manassas Route 29/I-66 Corridor

N Prince Georges County Beltsville/Calverton College Park Greenbelt Landover/Largo/Captl HtsLanham Laurel

Northeast/Southeast Northeast* Southeast*

R-B Corridor Ballston Clarendon/Courthouse Rosslyn Virginia Square

S Prince Georges County Branch Avenue Corridor NatHbr/OxnHill/FtWash Pennsylvania Ave Corridor

SE Fairfax County Huntington/Mt Vernon Springfield/Burke

SE Montgomery County Kensington/Wheaton North Silver Spring/Rt 29 Silver Spring

Winchester City Winchester City

Woodbridge/I-95 Corridor Woodbridge/I-95 Corridor

* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.


10/55




Total Employment by Industry Total Employment GrowthPercent of Total Employment by Industry Total Number of Jobs Added Per Year

Source: Department of Labor, Bureau of Labor Statistics Source: Department of Labor, Bureau of Labor Statistics

Office* Employment Growth Office* Employment Growth

Cumulative Growth in Office* Jobs Over the Past 5 Years Number of Office* Jobs Added Per Year

Market

Employment

Growth

Inventory

Growth Difference

Atlanta -9.70% 6.00% -15.70%

Boston -1.90% 2.70% -4.60%

Chicago -11.60% 3.50% -15.10%

Dallas/Ft Worth -0.70% 6.40% -7.10%

Denver -3.90% 4.70% -8.60%

Los Angeles -11.10% 2.80% -13.90%

New York City -2.80% 1.50% -4.30%

Seattle/Puget Sound -4.20% 9.30% -13.50%

Tampa/St Petersburg -12.90% 6.60% -19.50%

Washington -1.60% 7.50% -9.10%

Source: Department of Labor, Bureau of Labor Statistics

Historical Unemployment Rates

Source: Department of Labor, Bureau of Labor Statistics.

Source: Department of Labor, Bureau of Labor Statistics. * Office employment is defined as jobs in the Information,

Financial Activities, and Professional & Business Services industries

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PercentGrowth

Washington, D.C. U.S. Average

12%10%

7%

26%

0%

24%

1%

13%

3%

4%

0%

Natural Resources &

MiningConstruction

Manufacturing

Trade, Transportation &

UtilitiesInformation

Financial Activities

Professional & Business

ServicesEducation & Health

ServicesLeisure & Hospitality

Other Services

Government

-8.0%-7.0%-6.0%-5.0%-4.0%

-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PercentGrowth


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2000

1q

2000

3q

2001

1q

2001

3q

2002

1q

2002

3q

2003

1q

2003

3q

2004

1q

2004

3q

2005

1q

2005

3q

2006

1q

2006

3q

2007

1q

2007

3q

2008

1q

2008

3q

2009

1q

2009

3q

2010

1q

2010

3q

PercentUnemp

loyment


EMPLOYMENT AND TENANT


11/55



Washington, D.C. Office MarketEMPLOYMENT AND TENANT

Tenant by Size Range Tenants by Lease ExpirationBased on Total Number of Tenants Based on Total Square Footage of Tenants

Source: CoStar Tenant Source: CoStar Tenant

Tenants by Industry SF Per Employee by IndustryBased on Total Square Footage of Tenants Based on All Tenants

Source: CoStar Tenant Source: CoStar Tenant

42.5%

22.2%

15.0%

11.7%

4.3%

1.4%

2.8%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Up to 2,499 SF

2,500-4,999 SF

5,000-9,999 SF

10,000-24,999 SF

25,000-49,999 SF

50,000-74,999 SF

75,000 SF & Up

Percentage of Tenants

12.7%

12.1%

12.2%

10.4%

6.6%

7.5%

0% 2% 4% 6% 8% 10% 12% 14%

2012

2013

2014

2015

2016

2017


21.6%

16.0%

15.0%

12.8%

10.9%

6.2%

4.5%

4.2%

3.3%

2.1%

1.6%

1.4%

0.5%

0% 5% 10% 15% 20% 25%

Services

Government

Business-Service

Finance/Ins/RE

Law Firms

Manufacturing

Communications

Medical

Engineers/Archit

Agri/Mining/Util

Retailers/Wholes

Accountants

Transportation


425.2

352.5

347.9

325.2

298.1

288.6

280.9

276.5

271.6

257.0

252.7

249.2

230.3

0 50 100 150 200 250 300 350 400 450

Law Firms

Services

Government

Manufacturing

Finance/Ins/RE

Retailers/Wholes

Engineers/Archit

Agri/Mining/Util

Business-Service

Communications

Accountants

Medical

Transportation

SF Per Employee


12/55




Construction Highlights in Select CoStar MarketsColor Coded by Under Construction Square Footage as a Percentage of Existing Inventory

INVENTORY & DEVELOPMENT



13/55




Historical Deliveries 1982 - 2010

Source: CoStar Property * Future deliveries based on current under construction buildings.

Construction Activity Markets Ranked by Under Construction Square Footage

# Bldgs Preleased SF Preleased % All Existing U/C

Downtown DC 4 668,989 62.5% 113,289 267,771

R-B Corridor 3 485,220 60.9% 128,544 265,772

Capitol Hill Area 1 0 0.0% 72,611 414,029

SE Fairfax County 5 94,280 23.9% 28,152 78,856

I-270 Corridor 1 358,440 100.0% 56,217 358,440

Georgetown/Uptown 1 103,600 74.0% 20,725 140,000

Dulles Corridor 1 120,000 100.0% 73,615 120,000

Woodbridge/I-95 Corridor 2 23,725 47.4% 14,618 25,016

Frederick 1 0 0.0% 14,797 33,000Alexandria/I-395 Area 1 9,750 65.0% 44,851 15,000

All Other 2 0 0.0% 33,450 8,051

Totals 22 1,864,004 54.7% 47,439 154,967


Recent Deliveries Future DeliveriesLeased & Un-Leased SF in Deliveries Since 2006 Preleased & Un-Leased SF in Properties Scheduled to Deliver

Source: CoStar Property Source: CoStar Property

16,103

1,071,083

3,409,282

797,315

414,029

394,280

358,440

140,000

120,000

50,032

33,00015,000

Market

Under Construction Inventory Average Bldg Size

Total RBA

12.1

9.8

13.4

16.817.6

21.8

17.1 18.3 16.6

8.4

5.3

3.7

1.72.5

4.4

2.3

5.0

11.3 11.5

14.5

12.2

4.9

7.1 6.9

11.210.2

9.4

7.6

4.4

0.0

5.0

10.0

15.0

20.0

25.0

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MillionsofSF

Deliveries Average Delivered SF

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2006 2007 2008 2009 2010

MillionsofSF

Leased Un-Leased

0

200

400

600

800

1,000

1,200

1,400

2011 1q 2011 2q 2011 3q 2011 4q

ThousandsofSF

Preleased Un-Leased



14/55




Historical Construction Starts & DeliveriesSquare Footage Per Quarter Starting and Completing Construction


Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project

Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant

< 50,000 SF 8 164,588 66,237 40.2% $28.54 0 164,588

50,000 SF - 99,999 SF 2 138,546 57,896 41.8% $70.00 50,000 88,546

100,000 SF - 249,999 SF 8 1,147,745 401,513 35.0% $44.32 0 1,147,745

250,000 SF - 499,999 SF 5 1,805,712 1,269,022 70.3% $53.50 0 1,805,712

>= 500,000 SF 2 1,114,088 1,114,088 100.0% $0.00 1,114,088 0


Recent Development by Tenancy Existing Inventory ComparisonBased on RBA Developed for Single & Multi Tenant Use Based on Total RBA

2010 Deliveries


Currently Under Construction By Class By Space Type

2.87

1.98 1.982.14

1.80

3.36

1.32

0.67

0.16 0.20

0.700.60

0.24

0.53

0.00

0.38

2.232.47

1.69

3.82

3.173.02

1.641.52

1.09

3.20

2.30

1.05

1.55

2.19

0.59

0.04

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2010 2q 2010 3q 2010 4q

MillionsofSF

Construction Starts Deliveries

73%

27%

Multi Single

27%

73%

Multi Single

8%

55%

37%

Class A Class B Class C

11%

89%

Multi Single



15/55






16/55






17/55




Class A Market Statistics Year-End 2010YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Alexandria/I-395 Area 100 19,076,797 2,577,219 2,690,039 14.1% 432,482 523,941 0 $36.99

Bethesda/Chevy Chase 27 5,796,554 388,596 590,058 10.2% (55,989) 0 0 $37.25

Capitol Hill Area 71 24,204,753 4,527,366 4,599,086 19.0% 2,962,260 2,280,614 414,029 $51.65

Downtown DC 240 59,849,806 5,757,256 6,759,724 11.3% 962,194 365,000 1,071,083 $54.29

Dulles Corridor 284 39,325,670 6,246,240 6,809,057 17.3% 941,222 525,000 120,000 $28.21

E Prince Georges County 9 822,842 168,413 197,107 24.0% 64,198 0 0 $21.98

East Falls Church 1 300,000 2,500 2,500 0.8% 0 0 0 $37.99

Frederick 20 2,086,538 251,705 260,292 12.5% (9,195) 0 0 $26.10

Georgetown/Uptown 23 4,056,906 476,077 561,130 13.8% (35,107) 0 140,000 $42.18

Greater Fairfax County 189 33,588,569 4,893,348 5,444,723 16.2% (708,307) 0 0 $32.06

I-270 Corridor 145 20,784,328 3,267,023 3,700,268 17.8% 626,319 0 358,440 $30.55

Leesburg/Route 7 Corridor 39 3,451,836 899,453 910,760 26.4% 20,930 121,000 0 $26.52

Manassas/Route 29/I-66 15 987,949 243,495 243,495 24.6% 54,427 0 0 $24.60

N Prince Georges County 55 7,505,482 1,545,621 1,577,520 21.0% 143,859 123,000 0 $21.03

Northeast/Southeast 1 63,000 1,400 1,400 2.2% (200) 0 0 $0.00

R-B Corridor 68 15,697,030 829,989 1,110,216 7.1% 260,449 217,536 797,315 $41.83

S Prince Georges County 8 1,049,087 511,369 528,423 50.4% (19,741) 0 0 $23.21

SE Fairfax County 14 1,615,506 77,063 88,123 5.5% 105,797 0 94,280 $35.93

SE Montgomery County 30 5,661,497 446,395 510,443 9.0% (31,830) 0 0 $30.97

Winchester City 1 24,500 24,500 24,500 100.0% 0 0 0 $26.28

Woodbridge/I-95 Corridor 11 544,189 141,480 144,752 26.6% 51,313 32,400 0 $25.60

Totals 1,351 246,492,839 33,276,508 36,753,616 14.9% 5,765,081 4,188,491 2,995,147 $37.88


Class B Market Statistics Year-End 2010YTD Net YTD Under Quoted


Alexandria/I-395 Area 403 15,819,620 882,032 946,645 6.0% (43,937) 0 15,000 $29.43

Bethesda/Chevy Chase 138 5,151,776 388,245 413,504 8.0% 16,842 0 0 $31.95

Capitol Hill Area 139 7,286,508 721,460 727,160 10.0% (274,892) 0 0 $42.03

Downtown DC 360 30,265,937 1,743,539 2,051,261 6.8% (81,307) 0 0 $41.73

Dulles Corridor 390 13,906,171 2,097,165 2,271,173 16.3% (65,044) 7,000 0 $21.91

E Prince Georges County 45 1,124,517 81,884 84,434 7.5% (10,094) 0 0 $21.44

East Falls Church 22 319,643 2,600 2,600 0.8% 1,024 0 0 $37.20

Frederick 232 4,236,229 634,915 639,263 15.1% 4,981 34,788 33,000 $23.55

Georgetown/Uptown 364 8,433,493 567,719 625,775 7.4% (8,785) 0 0 $33.61

Greater Fairfax County 644 24,276,598 3,333,863 3,520,526 14.5% 74,347 12,700 0 $24.91

I-270 Corridor 373 17,106,473 1,978,415 1,995,072 11.7% 205,562 20,000 0 $23.56

Leesburg/Route 7 Corridor 216 3,395,708 366,409 401,647 11.8% (20,616) 16,700 11,303 $24.34

Manassas/Route 29/I-66 181 3,998,866 454,123 475,645 11.9% (28,296) 20,000 0 $20.29

N Prince Georges County 275 9,053,686 1,775,000 1,785,287 19.7% (57,648) 0 0 $19.76

Northeast/Southeast 61 1,339,496 150,469 150,469 11.2% (141,669) 0 0 $24.04

R-B Corridor 55 6,222,446 431,578 442,935 7.1% 278,316 0 0 $36.14

S Prince Georges County 86 2,354,612 292,225 292,225 12.4% 41,850 21,000 0 $21.71

SE Fairfax County 170 4,568,789 704,040 713,747 15.6% (225,231) 0 300,000 $26.40

SE Montgomery County 158 5,478,754 482,773 516,441 9.4% 30,282 50,000 0 $23.08

Winchester City 72 1,537,849 128,684 128,684 8.4% 25,254 0 4,800 $18.43

Woodbridge/I-95 Corridor 140 2,133,189 251,117 255,197 12.0% 87,554 0 50,032 $22.03

Totals 4,524 168,010,360 17,468,255 18,439,690 11.0% (191,507) 182,188 414,135 $27.58


Existing Inventory Vacancy


FIGURES AT A GLANCE


18/55




Class C Market Statistics Year-End 2010YTD Net YTD Under Quoted


Alexandria/I-395 Area 373 4,393,417 265,770 265,770 6.0% (19,598) 0 0 $24.03

Bethesda/Chevy Chase 95 1,006,579 155,344 155,344 15.4% (8,311) 0 0 $26.79

Capitol Hill Area 245 1,546,921 86,616 89,726 5.8% (2,914) 0 0 $36.39

Downtown DC 243 5,387,177 211,223 213,423 4.0% (23,655) 0 0 $37.71

Dulles Corridor 63 1,022,674 105,140 109,040 10.7% (34,197) 0 0 $20.37

E Prince Georges County 36 238,224 7,356 7,356 3.1% 11,854 0 0 $19.04

East Falls Church 29 305,272 60,293 60,293 19.8% (42,091) 0 0 $31.31

Frederick 277 1,505,090 123,346 123,346 8.2% 3,603 0 0 $18.37

Georgetown/Uptown 413 4,089,799 328,634 328,634 8.0% (31,071) 0 0 $32.05

Greater Fairfax County 303 3,034,253 191,081 191,271 6.3% (18,642) 0 0 $24.25

I-270 Corridor 227 3,991,037 311,844 319,244 8.0% 49,606 0 0 $22.28

Leesburg/Route 7 Corridor 110 480,001 56,029 57,789 12.0% (7,776) 0 0 $22.27

Manassas/Route 29/I-66 151 891,020 54,745 55,095 6.2% (8,623) 0 0 $18.59

N Prince Georges County 335 2,558,010 153,501 153,501 6.0% 17,031 0 0 $19.48


R-B Corridor 58 1,346,998 105,023 105,023 7.8% 23,530 0 0 $23.11

S Prince Georges County 191 1,478,866 128,072 128,072 8.7% (275) 0 0 $19.77

SE Fairfax County 69 938,280 43,102 43,102 4.6% (3,038) 0 0 $18.21

SE Montgomery County 179 1,750,199 244,715 260,142 14.9% (26,323) 0 0 $21.46

Winchester City 39 227,995 43,067 43,067 18.9% (2,641) 0 0 $14.72

Woodbridge/I-95 Corridor 69 538,554 97,447 97,447 18.1% (33,795) 0 0 $20.50

Totals 3,658 37,733,212 2,905,542 2,949,746 7.8% (165,272) 0 0 $24.46


Total Office Market Statistics Year-End 2010YTD Net YTD Under Quoted


Alexandria/I-395 Area 876 39,289,834 3,725,021 3,902,454 9.9% 368,947 523,941 15,000 $33.90

Bethesda/Chevy Chase 260 11,954,909 932,185 1,158,906 9.7% (47,458) 0 0 $34.27

Capitol Hill Area 455 33,038,182 5,335,442 5,415,972 16.4% 2,684,454 2,280,614 414,029 $49.79

Downtown DC 843 95,502,920 7,712,018 9,024,408 9.4% 857,232 365,000 1,071,083 $50.40

Dulles Corridor 737 54,254,515 8,448,545 9,189,270 16.9% 841,981 532,000 120,000 $26.60

E Prince Georges County 90 2,185,583 257,653 288,897 13.2% 65,958 0 0 $21.57

East Falls Church 52 924,915 65,393 65,393 7.1% (41,067) 0 0 $32.05

Frederick 529 7,827,857 1,009,966 1,022,901 13.1% (611) 34,788 33,000 $23.52

Georgetown/Uptown 800 16,580,198 1,372,430 1,515,539 9.1% (74,963) 0 140,000 $37.18

Greater Fairfax County 1,136 60,899,420 8,418,292 9,156,520 15.0% (652,602) 12,700 0 $28.95

I-270 Corridor 745 41,881,838 5,557,282 6,014,584 14.4% 881,487 20,000 358,440 $27.58

Leesburg/Route 7 Corridor 365 7,327,545 1,321,891 1,370,196 18.7% (7,462) 137,700 11,303 $25.84

Manassas/Route 29/I-66 347 5,877,835 752,363 774,235 13.2% 17,508 20,000 0 $21.53

N Prince Georges County 665 19,117,178 3,474,122 3,516,308 18.4% 103,242 123,000 0 $20.21


R-B Corridor 181 23,266,474 1,366,590 1,658,174 7.1% 562,295 217,536 797,315 $40.52

S Prince Georges County 285 4,882,565 931,666 948,720 19.4% 21,834 21,000 0 $22.09

SE Fairfax County 253 7,122,575 824,205 844,972 11.9% (122,472) 0 394,280 $28.46

SE Montgomery County 367 12,890,450 1,173,883 1,287,026 10.0% (27,871) 50,000 0 $26.06

Winchester City 112 1,790,344 196,251 196,251 11.0% 22,613 0 4,800 $18.81

Woodbridge/I-95 Corridor 220 3,215,932 490,044 497,396 15.5% 105,072 32,400 50,032 $22.54

Totals 9,533 452,236,411 53,650,305 58,143,052 12.9% 5,408,302 4,370,679 3,409,282 $33.72




FIGURES AT A GLANCE


19/55



Washington, D.C. Office MarketFIGURES AT A GLANCE

Class A Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Annandale 5 486,100 93,546 96,246 19.8% 1,127 0 0 $26.06

Ballston 26 6,024,153 182,185 235,673 3.9% 139,985 0 797,315 $43.20

Beltsville/Calvert 7 796,902 266,477 266,477 33.4% (4,351) 0 0 $23.50

Bethesda/Chevy 27 5,796,554 388,596 590,058 10.2% (55,989) 0 0 $37.25

Bowie 8 768,842 168,413 197,107 25.6% 64,198 0 0 $21.98

Branch Avenue 1 59,753 46,558 46,558 77.9% 0 0 0 $0.00

Capitol Hill 11 2,515,170 307,391 317,046 12.6% 48,638 162,268 0 $61.93

Capitol Riverfron 9 3,310,453 411,809 429,322 13.0% 192,075 0 414,029 $47.54

CBD 103 23,392,821 2,516,378 2,962,985 12.7% 528,780 365,000 394,145 $52.67

Clarendon/Cour 20 3,623,560 428,676 563,183 15.5% 112,470 217,536 0 $40.92

College Park 10 1,835,819 141,004 141,004 7.7% 110,508 123,000 0 $24.25

Crystal City 15 4,664,306 671,299 704,103 15.1% 275,176 409,744 0 $40.36

East End 123 33,750,879 3,048,251 3,591,611 10.6% 248,396 0 244,038 $56.78

Eisenhower Ave 12 3,350,148 262,909 262,909 7.8% 76,616 0 0 $38.29

Fairfax Center 35 5,146,732 979,290 1,126,355 21.9% (309,990) 0 0 $27.90

Fairfax City 12 1,020,426 156,005 156,005 15.3% (70,239) 0 0 $28.79

Falls Church 4 364,341 14,227 14,227 3.9% 38,613 0 0 $25.92

Frederick 20 2,086,538 251,705 260,292 12.5% (9,195) 0 0 $26.10

Gaithersburg 14 1,513,296 330,329 339,283 22.4% 112,895 0 0 $24.73

Georgetown 11 1,788,450 249,129 306,446 17.1% 13,855 0 0 $43.96

Germantown 12 1,226,579 240,688 264,953 21.6% 44,298 0 0 $28.68

Great Fal ls 0 0 0 0 0.0% 0 0 0 $0.00

Greater Upper 1 54,000 0 0 0.0% 0 0 0 $0.00

Greenbelt 20 2,296,179 580,704 585,679 25.5% 48,134 0 0 $21.53

Herndon 61 9,349,026 1,393,707 1,569,905 16.8% 72,302 0 0 $29.94

Huntington/Mt 2 171,439 39,718 39,718 23.2% (4,505) 0 0 $24.73

I-270 Corridor N 1 250,000 0 0 0.0% 0 0 0 $0.00

I-395 Corridor 23 5,619,488 958,588 1,007,075 17.9% (45,433) 0 0 $33.50

Kensington/Wh 2 165,000 18,431 21,431 13.0% (10,983) 0 0 $29.00

Landover/Largo 9 1,204,035 445,578 445,578 37.0% (20,275) 0 0 $19.35

Lanham 2 447,000 8,467 25,301 5.7% 3,679 0 0 $16.00

Laurel 7 925,547 103,391 113,481 12.3% 6,164 0 0 $19.38

Leesburg/West 13 772,068 419,671 419,671 54.4% (51,861) 121,000 0 $25.59




20/55




FIGURES AT A GLANCE

Class A Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Manassas 4 247,824 107,791 107,791 43.5% 23,562 0 0 $25.08

McLean 1 65,999 4,144 7,094 10.7% (3,641) 0 0 $30.38

Merrifield 36 6,720,582 1,250,847 1,356,369 20.2% (144,901) 0 0 $34.74

N Arlington/E F 1 300,000 2,500 2,500 0.8% 0 0 0 $37.99

NatHbr/OxnHill 4 450,366 79,155 96,209 21.4% (38,923) 0 0 $26.22

NoMa 27 9,523,101 1,756,804 1,775,838 18.6% 1,506,007 1,492,346 0 $49.26

North Bethesda/ 31 6,819,655 973,318 1,147,321 16.8% (46,894) 0 358,440 $31.77

North Rockville 61 7,461,786 1,124,938 1,298,748 17.4% 243,629 0 0 $29.64

North Silver Spri 9 1,500,945 22,289 28,114 1.9% 50,098 0 0 $24.18

Northeast 0 0 0 0 0.0% 0 0 0 $0.00

Oakton 11 1,397,990 244,461 275,788 19.7% (18,486) 0 0 $27.11

Old Town Alexa 47 4,750,522 666,877 698,406 14.7% 143,669 114,197 0 $34.52

Pennsylvania Av 3 538,968 385,656 385,656 71.6% 19,182 0 0 $22.50

Pentagon City 3 692,333 17,546 17,546 2.5% (17,546) 0 0 $0.00

Reston 101 14,764,470 2,382,151 2,739,348 18.6% (159,834) 0 0 $27.72

Rockville 26 3,513,012 597,750 649,963 18.5% 272,391 0 0 $33.79

Rosslyn 16 5,050,946 192,060 284,292 5.6% (22,214) 0 0 $39.78

Route 28 Corrid 50 5,484,055 770,066 792,133 14.4% 152,752 0 120,000 $24.89

Route 28 Corrid 72 9,728,119 1,700,316 1,707,671 17.6% 876,002 525,000 0 $28.11

Route 29/I-66 C 11 740,125 135,704 135,704 18.3% 30,865 0 0 $24.23

Route 7 Corrido 26 2,679,768 479,782 491,089 18.3% 72,791 0 0 $27.41

Silver Spring 19 3,995,552 405,675 460,898 11.5% (70,945) 0 0 $31.62

Southeast 1 63,000 1,400 1,400 2.2% (200) 0 0 $0.00

Southwest 24 8,856,029 2,051,362 2,076,880 23.5% 1,215,540 626,000 0 $52.50

Springfield/Burk 12 1,444,067 37,345 48,405 3.4% 110,302 0 94,280 $38.41

Tysons Corner 83 17,986,399 2,150,828 2,412,639 13.4% (203,937) 0 0 $32.86

Uptown 12 2,268,456 226,948 254,684 11.2% (48,962) 0 140,000 $40.38

Vienna 2 400,000 0 0 0.0% 3,147 0 0 $0.00

Virginia Square 6 998,371 27,068 27,068 2.7% 30,208 0 0 $44.74

West End 14 2,706,106 192,627 205,128 7.6% 185,018 0 432,900 $42.90

Winchester City 1 24,500 24,500 24,500 100.0% 0 0 0 $26.28

Woodbridge/I-9 11 544,189 141,480 144,752 26.6% 51,313 32,400 0 $25.60

Totals 1,351 246,492,839 33,276,508 36,753,616 14.9% 5,765,081 4,188,491 2,995,147 $37.88




21/55




Class B Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Annandale 60 1,485,642 162,482 182,678 12.3% 9,751 0 0 $22.57

Ballston 5 380,118 85,076 85,076 22.4% 24,290 0 0 $29.46


Bethesda/Chevy 138 5,151,776 388,245 413,504 8.0% 16,842 0 0 $31.95

Bowie 29 916,122 64,974 67,524 7.4% 2,030 0 0 $22.55

Branch Avenue 47 1,521,137 138,107 138,107 9.1% 20,768 0 0 $19.79

Capitol Hill 107 2,567,441 476,699 482,399 18.8% (313,537) 0 0 $46.15

Capitol Riverfron 8 1,202,396 86,554 86,554 7.2% 11,740 0 0 $0.00

CBD 207 18,901,996 916,002 1,091,801 5.8% (54,924) 0 0 $42.11

Clarendon/Cour 15 1,938,705 149,141 150,666 7.8% 178,303 0 0 $38.98

College Park 50 1,738,716 397,350 397,350 22.9% (20,698) 0 0 $20.88

Crystal City 21 6,014,010 311,535 328,213 5.5% 24,540 0 0 $36.17

East End 138 10,333,525 775,358 907,281 8.8% (70,380) 0 0 $41.47

Eisenhower Ave 16 1,706,720 113,777 113,777 6.7% (72,665) 0 0 $26.09

Fairfax Center 30 1,775,903 166,847 187,718 10.6% 100,920 0 0 $23.00

Fairfax City 139 3,325,397 362,690 365,646 11.0% (2,033) 0 0 $21.12

Falls Church 82 2,021,120 239,676 249,074 12.3% 28,497 0 0 $23.66

Frederick 232 4,236,229 634,915 639,263 15.1% 4,981 34,788 33,000 $23.55

Gaithersburg 113 3,685,821 448,139 448,139 12.2% (17,081) 0 0 $21.22

Georgetown 91 1,388,600 52,878 61,427 4.4% 71,460 0 0 $40.07

Germantown 39 1,621,656 145,632 145,632 9.0% 126,387 20,000 0 $18.53

Great Falls 17 197,225 17,064 17,064 8.7% 4,112 0 0 $25.52

Greater Upper 16 208,395 16,910 16,910 8.1% (12,124) 0 0 $16.19

Greenbelt 50 1,254,670 245,862 250,512 20.0% (10,305) 0 0 $19.02

Herndon 95 2,786,384 435,406 449,132 16.1% (30,918) 0 0 $22.43

Huntington/Mt 32 756,954 78,071 78,071 10.3% (31,869) 0 0 $22.61

I-270 Corridor N 7 644,274 11,443 11,443 1.8% (741) 0 0 $24.39

I-395 Corridor 97 3,005,357 138,938 170,498 5.7% (44,111) 0 0 $27.56

Kensington/Wh 45 1,436,527 111,657 119,410 8.3% 3,266 0 0 $22.23

Landover/Largo 48 2,071,276 404,810 405,447 19.6% 16,524 0 0 $21.15

Lanham 36 1,383,092 261,725 266,725 19.3% 26,763 0 0 $19.47

Laurel 70 1,772,147 268,918 268,918 15.2% 13,400 0 0 $18.23

Leesburg/West 173 1,542,183 197,766 206,115 13.4% (5,562) 16,700 11,303 $25.45




22/55




FIGURES AT A GLANCE

Class B Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Manassas 82 1,913,267 199,010 210,410 11.0% 24,961 20,000 0 $21.69

McLean 73 1,484,438 115,873 121,362 8.2% 76 0 0 $27.83

Merrifield 68 2,970,110 299,135 349,263 11.8% (76,424) 12,700 0 $26.47

N Arlington/E F 22 319,643 2,600 2,600 0.8% 1,024 0 0 $37.20

NatHbr/OxnHill 20 566,960 122,907 122,907 21.7% 10,482 21,000 0 $24.92

NoMa 13 819,442 141,426 141,426 17.3% 14,158 0 0 $33.41

North Bethesda/ 65 2,898,308 239,500 252,545 8.7% 129,824 0 0 $26.11

North Rockville 66 4,109,240 645,098 645,982 15.7% (35,418) 0 0 $25.42

North Silver Spri 48 1,924,222 157,329 173,095 9.0% (1,944) 0 0 $22.12

Northeast 39 1,045,168 108,820 108,820 10.4% (104,120) 0 0 $22.79

Oakton 10 195,458 5,900 5,900 3.0% 71,431 0 0 $23.65

Old Town Alexa 266 4,317,550 317,782 334,157 7.7% 48,299 0 15,000 $27.69

Pennsylvania Av 19 266,515 31,211 31,211 11.7% 10,600 0 0 $21.76

Pentagon City 3 775,983 0 0 0.0% 0 0 0 $0.00

Reston 103 4,001,090 523,315 527,715 13.2% 120,552 0 0 $23.19

Rockville 83 4,147,174 488,603 491,331 11.8% 2,591 0 0 $23.77

Rosslyn 23 3,442,780 173,809 183,641 5.3% 73,779 0 0 $37.67

Route 28 Corrid 92 3,523,200 582,696 603,798 17.1% (66,815) 7,000 0 $21.57

Route 28 Corrid 83 3,398,272 538,684 673,464 19.8% (91,975) 0 0 $20.67

Route 29/I-66 C 99 2,085,599 255,113 265,235 12.7% (53,257) 0 0 $19.22

Route 7 Corrido 43 1,853,525 168,643 195,532 10.5% (15,054) 0 0 $22.76

Silver Spring 65 2,118,005 213,787 223,936 10.6% 28,960 50,000 0 $24.16

Southeast 22 294,328 41,649 41,649 14.2% (37,549) 0 0 $29.31

Southwest 11 2,697,229 16,781 16,781 0.6% 12,747 0 0 $41.80

Springfield/Burk 138 3,811,835 625,969 635,676 16.7% (193,362) 0 300,000 $26.81

Tysons Corner 116 9,823,675 1,911,876 1,989,501 20.3% (43,811) 0 0 $25.75

Uptown 273 7,044,893 514,841 564,348 8.0% (80,245) 0 0 $32.70

Vienna 66 1,194,855 69,384 69,384 5.8% (14,060) 0 0 $23.31

Virginia Square 12 460,843 23,552 23,552 5.1% 1,944 0 0 $37.27

West End 15 1,030,416 52,179 52,179 5.1% 43,997 0 0 $38.57

Winchester City 72 1,537,849 128,684 128,684 8.4% 25,254 0 4,800 $18.43

Woodbridge/I-9 140 2,133,189 251,117 255,197 12.0% 87,554 0 50,032 $22.03

Totals 4,524 168,010,360 17,468,255 18,439,690 11.0% (191,507) 182,188 414,135 $27.58




23/55




Class C Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Annandale 28 185,876 7,878 7,878 4.2% (2,305) 0 0 $25.92

Ballston 9 582,746 4,100 4,100 0.7% (860) 0 0 $0.00


Bethesda/Chevy 95 1,006,579 155,344 155,344 15.4% (8,311) 0 0 $26.79

Bowie 12 134,314 4,200 4,200 3.1% 2,500 0 0 $16.89

Branch Avenue 111 944,218 66,200 66,200 7.0% 17,834 0 0 $17.87

Capitol Hill 200 1,173,936 43,658 46,768 4.0% 14,324 0 0 $39.13

Capitol Riverfron 28 125,243 37,558 37,558 30.0% (13,488) 0 0 $30.19

CBD 103 2,193,734 65,883 65,883 3.0% (13,168) 0 0 $34.96

Clarendon/Cour 31 430,752 29,940 29,940 7.0% (3,049) 0 0 $28.29

College Park 162 1,172,530 105,240 105,240 9.0% 14,561 0 0 $19.78

Crystal City 10 1,111,460 152,352 152,352 13.7% (17,078) 0 0 $25.56

East End 134 2,692,106 139,545 141,745 5.3% (7,932) 0 0 $39.45

Eisenhower Ave 11 55,173 0 0 0.0% 0 0 0 $25.67

Fairfax Center 5 99,541 927 927 0.9% 4,667 0 0 $19.66

Fairfax City 63 717,484 38,900 38,900 5.4% (25,194) 0 0 $23.29

Falls Church 101 704,731 67,929 68,119 9.7% 5,219 0 0 $20.50

Frederick 277 1,505,090 123,346 123,346 8.2% 3,603 0 0 $18.37

Gaithersburg 78 969,151 47,271 47,271 4.9% (3,637) 0 0 $21.66

Georgetown 67 464,429 26,219 26,219 5.6% (9,552) 0 0 $38.45

Germantown 8 38,849 1,400 1,400 3.6% (1,400) 0 0 $21.44

Great Falls 3 19,849 1,728 1,728 8.7% 1,072 0 0 $36.17

Greater Upper 24 103,910 3,156 3,156 3.0% 9,354 0 0 $21.90

Greenbelt 8 85,434 0 0 0.0% 1,540 0 0 $18.23

Herndon 19 229,314 23,980 23,980 10.5% 1,203 0 0 $18.56

Huntington/Mt 25 316,353 5,422 5,422 1.7% 2,338 0 0 $19.63

I-270 Corridor N 5 11,518 3,350 3,350 29.1% (894) 0 0 $18.45

I-395 Corridor 50 1,660,087 39,666 39,666 2.4% 3,110 0 0 $17.39

Kensington/Wh 51 504,165 53,625 64,514 12.8% 4,514 0 0 $21.45

Landover/Largo 68 535,063 6,386 6,386 1.2% 706 0 0 $18.17

Lanham 24 207,811 7,112 7,112 3.4% (4,118) 0 0 $17.14

Laurel 51 375,750 23,620 23,620 6.3% 11,027 0 0 $18.95

Leesburg/West 108 463,956 56,029 57,789 12.5% (7,776) 0 0 $22.27




24/55




FIGURES AT A GLANCE

Class C Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Manassas 128 747,173 30,555 30,905 4.1% (2,051) 0 0 $18.63

McLean 23 244,758 15,221 15,221 6.2% 5,508 0 0 $35.26

Merrifield 15 182,934 7,946 7,946 4.3% 10,171 0 0 $26.17

N Arlington/E F 29 305,272 60,293 60,293 19.8% (42,091) 0 0 $31.31

NatHbr/OxnHill 26 216,618 52,670 52,670 24.3% (24,795) 0 0 $21.60

NoMa 15 181,181 5,400 5,400 3.0% (3,750) 0 0 $28.22

North Bethesda/ 38 972,793 130,539 131,939 13.6% (6,723) 0 0 $23.76

North Rockville 18 511,044 56,636 62,636 12.3% 16,894 0 0 $20.35

North Silver Spri 24 164,254 7,760 7,760 4.7% 1,200 0 0 $19.59

Northeast 85 564,455 109,494 111,769 19.8% 4,377 0 0 $21.00

Oakton 6 54,286 1,022 1,022 1.9% (97) 0 0 $19.37

Old Town Alexa 302 1,566,697 73,752 73,752 4.7% (5,630) 0 0 $26.25

Pennsylvania Av 54 318,030 9,202 9,202 2.9% 6,686 0 0 $19.22

Pentagon City 0 0 0 0 0.0% 0 0 0 $0.00

Reston 14 486,050 20,763 20,763 4.3% (4,088) 0 0 $22.92

Rockville 80 1,487,682 72,648 72,648 4.9% 45,366 0 0 $22.40

Rosslyn 7 255,219 67,502 67,502 26.4% 29,020 0 0 $19.32

Route 28 Corrid 15 168,769 26,228 30,128 17.9% (11,976) 0 0 $18.74

Route 28 Corrid 12 118,692 32,441 32,441 27.3% (20,408) 0 0 $19.88

Route 29/I-66 C 23 143,847 24,190 24,190 16.8% (6,572) 0 0 $18.51

Route 7 Corrido 2 16,045 0 0 0.0% 0 0 0 $0.00

Silver Spring 104 1,081,780 183,330 187,868 17.4% (32,037) 0 0 $21.54

Southeast 68 438,391 23,700 31,292 7.1% (12,323) 0 0 $25.50

Southwest 2 66,561 0 0 0.0% 0 0 0 $0.00

Springfield/Burk 44 621,927 37,680 37,680 6.1% (5,376) 0 0 $17.55

Tysons Corner 21 480,158 13,170 13,170 2.7% (4,280) 0 0 $23.94

Uptown 346 3,625,370 302,415 302,415 8.3% (21,519) 0 0 $31.31

Vienna 41 364,485 38,088 38,088 10.4% (12,331) 0 0 $28.67

Virginia Square 11 78,281 3,481 3,481 4.4% (1,581) 0 0 $30.96

West End 6 501,337 5,795 5,795 1.2% (2,555) 0 0 $36.54

Winchester City 39 227,995 43,067 43,067 18.9% (2,641) 0 0 $14.72

Woodbridge/I-9 69 538,554 97,447 97,447 18.1% (33,795) 0 0 $20.50

Totals 3,658 37,733,212 2,905,542 2,949,746 7.8% (165,272) 0 0 $24.46




25/55




Total Office Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Annandale 93 2,157,618 263,906 286,802 13.3% 8,573 0 0 $24.03

Ballston 40 6,987,017 271,361 324,849 4.6% 163,415 0 797,315 $41.87

Beltsville/Calvert 50 1,812,109 473,955 473,955 26.2% (94,368) 0 0 $20.38

Bethesda/Chevy 260 11,954,909 932,185 1,158,906 9.7% (47,458) 0 0 $34.27

Bowie 49 1,819,278 237,587 268,831 14.8% 68,728 0 0 $22.06

Branch Avenue 159 2,525,108 250,865 250,865 9.9% 38,602 0 0 $19.20

Capitol Hill 318 6,256,547 827,748 846,213 13.5% (250,575) 162,268 0 $52.61

Capitol Riverfron 45 4,638,092 535,921 553,434 11.9% 190,327 0 414,029 $46.02

CBD 413 44,488,551 3,498,263 4,120,669 9.3% 460,688 365,000 394,145 $49.01

Clarendon/Cour 66 5,993,017 607,757 743,789 12.4% 287,724 217,536 0 $40.36

College Park 222 4,747,065 643,594 643,594 13.6% 104,371 123,000 0 $21.39

Crystal City 46 11,789,776 1,135,186 1,184,668 10.0% 282,638 409,744 0 $38.48

East End 395 46,776,510 3,963,154 4,640,637 9.9% 170,084 0 244,038 $52.54

Eisenhower Ave 39 5,112,041 376,686 376,686 7.4% 3,951 0 0 $33.60

Fairfax Center 70 7,022,176 1,147,064 1,315,000 18.7% (204,403) 0 0 $26.60

Fairfax City 214 5,063,307 557,595 560,551 11.1% (97,466) 0 0 $23.11

Falls Church 187 3,090,192 321,832 331,420 10.7% 72,329 0 0 $23.20

Frederick 529 7,827,857 1,009,966 1,022,901 13.1% (611) 34,788 33,000 $23.52

Gaithersburg 205 6,168,268 825,739 834,693 13.5% 92,177 0 0 $22.52

Georgetown 169 3,641,479 328,226 394,092 10.8% 75,763 0 0 $42.98

Germantown 59 2,887,084 387,720 411,985 14.3% 169,285 20,000 0 $24.01

Great Falls 20 217,074 18,792 18,792 8.7% 5,184 0 0 $27.02

Greater Upper 41 366,305 20,066 20,066 5.5% (2,770) 0 0 $17.38

Greenbelt 78 3,636,283 826,566 836,191 23.0% 39,369 0 0 $20.44

Herndon 175 12,364,724 1,853,093 2,043,017 16.5% 42,587 0 0 $28.06

Huntington/Mt 59 1,244,746 123,211 123,211 9.9% (34,036) 0 0 $23.13

I-270 Corridor N 13 905,792 14,793 14,793 1.6% (1,635) 0 0 $21.84

I-395 Corridor 170 10,284,932 1,137,192 1,217,239 11.8% (86,434) 0 0 $30.56

Kensington/Wh 98 2,105,692 183,713 205,355 9.8% (3,203) 0 0 $22.36

Landover/Largo 125 3,810,374 856,774 857,411 22.5% (3,045) 0 0 $20.24

Lanham 62 2,037,903 277,304 299,138 14.7% 26,324 0 0 $19.30

Laurel 128 3,073,444 395,929 406,019 13.2% 30,591 0 0 $18.62

Leesburg/West 294 2,778,207 673,466 683,575 24.6% (65,199) 137,700 11,303 $25.36




26/55




FIGURES AT A GLANCE

Total Office Submarket Statistics Year-End 2010YTD Net YTD Under Quoted


Manassas 214 2,908,264 337,356 349,106 12.0% 46,472 20,000 0 $22.51

McLean 97 1,795,195 135,238 143,677 8.0% 1,943 0 0 $28.88

Merrifield 119 9,873,626 1,557,928 1,713,578 17.4% (211,154) 12,700 0 $33.19

N Arlington/E F 52 924,915 65,393 65,393 7.1% (41,067) 0 0 $32.05

NatHbr/OxnHill 50 1,233,944 254,732 271,786 22.0% (53,236) 21,000 0 $24.35

NoMa 55 10,523,724 1,903,630 1,922,664 18.3% 1,516,415 1,492,346 0 $47.52

North Bethesda/ 134 10,690,756 1,343,357 1,531,805 14.3% 76,207 0 358,440 $29.35

North Rockville 145 12,082,070 1,826,672 2,007,366 16.6% 225,105 0 0 $28.07

North Silver Spri 81 3,589,421 187,378 208,969 5.8% 49,354 0 0 $22.51

Northeast 124 1,609,623 218,314 220,589 13.7% (99,743) 0 0 $21.80

Oakton 27 1,647,734 251,383 282,710 17.2% 52,848 0 0 $27.02

Old Town Alexa 615 10,634,769 1,058,411 1,106,315 10.4% 186,338 114,197 15,000 $31.42

Pennsylvania Av 76 1,123,513 426,069 426,069 37.9% 36,468 0 0 $22.32

Pentagon City 6 1,468,316 17,546 17,546 1.2% (17,546) 0 0 $0.00

Reston 218 19,251,610 2,926,229 3,287,826 17.1% (43,370) 0 0 $26.95

Rockville 189 9,147,868 1,159,001 1,213,942 13.3% 320,348 0 0 $29.36

Rosslyn 46 8,748,945 433,371 535,435 6.1% 80,585 0 0 $38.29

Route 28 Corrid 157 9,176,024 1,378,990 1,426,059 15.5% 73,961 7,000 120,000 $23.52

Route 28 Corrid 167 13,245,083 2,271,441 2,413,576 18.2% 763,619 525,000 0 $25.90

Route 29/I-66 C 133 2,969,571 415,007 425,129 14.3% (28,964) 0 0 $20.73

Route 7 Corrido 71 4,549,338 648,425 686,621 15.1% 57,737 0 0 $26.38

Silver Spring 188 7,195,337 802,792 872,702 12.1% (74,022) 50,000 0 $27.74

Southeast 91 795,719 66,749 74,341 9.3% (50,072) 0 0 $27.58

Southwest 37 11,619,819 2,068,143 2,093,661 18.0% 1,228,287 626,000 0 $52.19

Springfield/Burk 194 5,877,829 700,994 721,761 12.3% (88,436) 0 394,280 $29.22

Tysons Corner 220 28,290,232 4,075,874 4,415,310 15.6% (252,028) 0 0 $29.51

Uptown 631 12,938,719 1,044,204 1,121,447 8.7% (150,726) 0 140,000 $34.82

Vienna 109 1,959,340 107,472 107,472 5.5% (23,244) 0 0 $24.90

Virginia Square 29 1,537,495 54,101 54,101 3.5% 30,571 0 0 $43.81

West End 35 4,237,859 250,601 263,102 6.2% 226,460 0 432,900 $41.78

Winchester City 112 1,790,344 196,251 196,251 11.0% 22,613 0 4,800 $18.81

Woodbridge/I-9 220 3,215,932 490,044 497,396 15.5% 105,072 32,400 50,032 $22.54

Totals 9,533 452,236,411 53,650,305 58,143,052 12.9% 5,408,302 4,370,679 3,409,282 $33.72




27/55




Class A Market Statistics Year-End 2010YTD Net YTD Under Quoted


CBD 326 84,864,012 10,350,290 11,492,018 13.5% 3,697,072 2,645,614 1,211,083 $53.02

Suburban 1,025 161,628,827 22,926,218 25,261,598 15.6% 2,068,009 1,542,877 1,784,064 $31.11

Totals 1,351 246,492,839 33,276,508 36,753,616 14.9% 5,765,081 4,188,491 2,995,147 $37.88


Class B Market Statistics Year-End 2010YTD Net YTD Under Quoted


CBD 916 46,123,038 3,096,633 3,468,111 7.5% (518,393) 0 0 $40.07

Suburban 3,608 121,887,322 14,371,622 14,971,579 12.3% 326,886 182,188 414,135 $24.04

Totals 4,524 168,010,360 17,468,255 18,439,690 11.0% (191,507) 182,188 414,135 $27.58


Class C Market Statistics Year-End 2010YTD Net YTD Under Quoted


CBD 1,026 11,901,500 722,109 737,286 6.2% (52,098) 0 0 $32.38

Suburban 2,632 25,831,712 2,183,433 2,212,460 8.6% (113,174) 0 0 $21.97

Totals 3,658 37,733,212 2,905,542 2,949,746 7.8% (165,272) 0 0 $24.46


Class A & B Market Statistics Year-End 2010YTD Net YTD Under Quoted


CBD 1,242 130,987,050 13,446,923 14,960,129 11.4% 3,178,679 2,645,614 1,211,083 $49.28

Suburban 4,633 283,516,149 37,297,840 40,233,177 14.2% 2,394,895 1,725,065 2,198,199 $28.35

Totals 5,875 414,503,199 50,744,763 55,193,306 13.3% 5,573,574 4,370,679 3,409,282 $34.15


Total Office Market Statistics Year-End 2010YTD Net YTD Under Quoted


CBD 2,268 142,888,550 14,169,032 15,697,415 11.0% 3,126,581 2,645,614 1,211,083 $48.62

Suburban 7,265 309,347,861 39,481,273 42,445,637 13.7% 2,281,721 1,725,065 2,198,199 $28.05

Totals 9,533 452,236,411 53,650,305 58,143,052 12.9% 5,408,302 4,370,679 3,409,282 $33.72








28/55




FIGURES AT A GLANCE

Class A Market Statistics Year-End 2010Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2010 4q 1,351 246,492,839 33,276,508 36,753,616 14.9% 1,571,761 0 0 12 2,995,147 $37.88

2010 3q 1,351 246,492,839 34,500,721 38,325,377 15.5% 1,247,535 3 582,536 11 2,920,147 $38.21

2010 2q 1,348 245,910,303 34,989,247 38,990,376 15.9% 2,045,320 6 2,123,468 14 3,502,683 $37.902010 1q 1,342 243,786,835 34,702,232 38,912,228 16.0% 900,465 8 1,482,487 18 5,098,673 $37.79

2009 4q 1,334 242,304,348 33,981,087 38,330,206 15.8% 909,660 5 1,010,843 25 6,461,160 $37.21

2009 3q 1,329 241,293,505 33,653,069 38,229,023 15.8% (282,729) 10 2,001,282 27 6,884,983 $36.89

2009 2q 1,319 239,292,223 31,780,530 35,945,012 15.0% 689,465 14 3,056,107 35 8,191,545 $36.86

2009 1q 1,305 236,236,116 29,687,634 33,578,370 14.2% 73,496 9 947,835 47 11,071,252 $37.79

2008 1,296 235,288,281 29,258,078 32,704,031 13.9% 2,443,524 61 8,895,520 54 11,901,549 $38.16

2007 1,235 226,392,761 23,430,361 26,252,035 11.6% 3,847,786 55 8,962,615 83 14,273,268 $37.60

2006 1,181 217,559,103 18,992,917 21,266,163 9.8% 6,878,356 58 9,233,777 77 14,811,213 $35.67

2005 1,123 208,325,326 16,077,675 18,910,742 9.1% 9,814,645 26 5,773,388 74 14,312,061 $33.51

2004 1,097 202,551,938 18,473,594 22,951,999 11.3% 8,885,404 30 5,874,952 52 12,927,838 $32.77

2003 1,067 196,676,986 20,901,843 25,962,451 13.2% 5,944,905 21 4,404,086 43 11,238,848 $30.58

2002 1,047 192,526,499 20,548,340 27,756,869 14.4% 4,929,113 60 10,857,295 36 10,215,413 $30.78

2001 987 181,669,204 14,106,406 21,828,687 12.0% 1,672,211 69 12,540,232 64 12,259,876 $31.85


Class B Market Statistics Year-End 2010Net Quoted


2010 4q 4,524 168,010,360 17,468,255 18,439,690 11.0% (86,549) 2 41,000 10 414,135 $27.58

2010 3q 4,522 167,969,360 17,250,697 18,312,141 10.9% 175,481 1 7,000 8 155,135 $27.49

2010 2q 4,522 168,041,698 17,307,365 18,559,960 11.0% (354,614) 3 64,188 9 162,135 $27.55

2010 1q 4,519 167,977,510 16,874,684 18,141,158 10.8% 74,175 2 70,000 11 221,523 $27.43

2009 4q 4,517 167,907,510 16,776,589 18,145,333 10.8% 68,337 2 39,092 8 167,491 $27.44

2009 3q 4,515 167,868,418 16,489,809 18,174,578 10.8% (302,172) 11 300,419 9 191,583 $27.99

2009 2q 4,504 167,567,999 15,915,797 17,571,987 10.5% (475,787) 7 145,085 19 485,002 $27.99

2009 1q 4,498 167,423,913 15,302,023 16,952,114 10.1% (476,326) 5 140,065 24 608,295 $28.17

2008 4,493 167,283,848 14,934,185 16,335,723 9.8% (1,074,205) 27 455,407 27 708,360 $28.44

2007 4,472 167,300,321 13,856,013 15,277,991 9.1% (310,175) 50 1,246,222 22 536,150 $28.77

2006 4,424 166,212,463 12,680,796 13,879,958 8.4% 1,422,965 76 1,904,018 47 1,226,648 $27.87

2005 4,354 164,831,935 12,605,351 13,922,395 8.4% 3,208,262 39 1,107,087 80 2,225,340 $26.52

2004 4,316 163,809,978 14,238,436 16,108,700 9.8% 2,217,245 41 1,189,790 36 1,060,805 $25.71

2003 4,278 162,773,327 14,612,045 17,289,294 10.6% 621,419 21 458,980 31 1,096,716 $24.92

2002 4,261 162,659,380 14,300,612 17,796,766 10.9% (2,975,183) 52 1,106,191 17 548,250 $25.56

2001 4,214 162,492,364 11,472,722 14,654,567 9.0% (4,325,239) 76 1,916,083 50 1,080,341 $26.60


Total Office Market Statistics Year-End 2010Net Quoted


2010 4q 9,533 452,236,411 53,650,305 58,143,052 12.9% 1,552,152 2 41,000 22 3,409,282 $33.72

2010 3q 9,531 452,195,411 54,707,886 59,654,204 13.2% 1,267,671 4 589,536 19 3,075,282 $33.94

2010 2q 9,529 451,696,073 55,082,880 60,422,537 13.4% 1,602,294 9 2,187,656 23 3,664,818 $33.81

2010 1q 9,521 449,553,942 54,318,742 59,882,700 13.3% 986,185 10 1,552,487 29 5,320,196 $33.76

2009 4q 9,511 448,001,455 53,494,422 59,316,398 13.2% 955,253 7 1,049,935 33 6,628,651 $33.42

2009 3q 9,504 446,951,520 52,865,938 59,221,716 13.3% (735,609) 21 2,301,701 36 7,076,566 $33.43

2009 2q 9,483 444,649,819 50,312,766 56,184,406 12.6% 44,769 21 3,201,192 54 8,676,547 $33.35

2009 1q 9,463 441,449,626 47,447,881 53,028,982 12.0% (460,126) 14 1,087,900 71 11,679,547 $34.08

2008 9,450 440,362,973 46,585,553 51,482,203 11.7% 1,179,686 88 9,350,927 81 12,609,909 $34.42

2007 9,372 431,541,150 39,565,806 43,840,066 10.2% 3,075,652 105 10,208,837 105 14,809,418 $34.16

2006 9,276 421,869,037 33,652,725 37,243,605 8.8% 8,889,074 140 11,207,719 124 16,037,861 $32.45

2005 9,146 411,386,074 31,442,654 35,649,716 8.7% 13,309,242 66 6,881,575 158 16,565,788 $30.45

2004 9,088 404,840,709 35,917,563 42,413,593 10.5% 10,132,304 76 7,118,162 89 13,989,743 $29.78

2003 9,020 398,083,409 37,947,941 45,788,597 11.5% 6,162,046 46 4,899,566 79 12,388,984 $28.40

2002 8,988 394,445,691 37,519,638 48,312,925 12.2% 1,910,216 122 12,196,618 56 10,772,263 $28.69

2001 8,882 383,472,468 28,243,564 39,249,918 10.2% (2,919,688) 148 14,499,577 123 13,553,957 $29.76


UC Inventory

Existing Inventory Vacancy Deliveries UC Inventory

Existing Inventory Vacancy Deliveries UC Inventory

Existing Inventory Vacancy Deliveries


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Washington, D.C. Office MarketLEASING ACTIVITY

Leasing Highlights in Select CoStar MarketsColor Coded by Vacancy Rate



30/55




Historical Rental RatesBased on Full-Service Equivalent Rental Rates


Vacancy by Available Space Type Vacancy by ClassPercent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Class


U.S. Rental Rate Comparison Future Space AvailableBased on Full-Service Equivalent Rental Rates Space Scheduled to be Available for Occupancy*

Source: CoStar Property * Includes Under Construction Spaces Source: CoStar Property

Washington United States Washington United States

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

1993

1q

1993

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1994

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1995

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1996

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1996

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2003

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Dollars/SF/Year

A B C Total Market

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

2008

3q

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2010

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Dollars/SF/Year

Washington, D.C. United States

92%

8%

Direct Sublet

5%

95%

Direct Sublet

63%

32% 5%


4.27

1.57

3.96

0.50

4.39

2.71

0.0

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1.0

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2.0

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3.0

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2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q

Millions

15%

48% 37%


LEASING ACTIVITY

costar dc office market report 2010

Documents