Increase in Office Investment Sales in Suburban Maryland
2016 is poised to be a great year for the office market, thanks to an increase in office investment sales in suburban Maryland. We are already seeing major growth in the number of sales and the total square footage being sold throughout Prince George’s, Montgomery, Howard, and Anne Arundel counties.
By the end of June 2015, the suburban Maryland* market saw 43 buildings sold, with a total of 2,856,583 square feet – the equivalent of nearly 6 football fields – according to data NAI Michael has gathered from the CoStar Group**. This year so far, CoStar reports the sale of 53 buildings and a total of 4,227,305 square feet. In other words, the first half of 2016 has seen a 19 percent increase in the number of buildings sold and a 32 percent increase in total square footage sold.
Increase in Office Investment Sales – Square Footage Sold Comparison
Increase in Office Investment Sales – Building Sale Comparison
Prince George’s County alone has seen a 45 percent increase in the total square footage sold; 373,297 square feet by the end of June 2015, but 675,168 square feet sold so far in 2016.
Contributing to this increase in office investment sales are multiple portfolio sales in the Landover/New Carrollton submarket. There are additional portfolio sales slated for the second half of the year as well. Assuming this positive trend continues at the same rate, suburban Maryland’s office investment sales are projected to be 136 buildings with a total of more than 9.7 million square feet sold in 2016.
This increase in office investment sales can be attributed to a number of factors, including low acquisition prices, low interest rates on commercial loans, competitive rates compared to other areas, and consistent growth within Prince George’s County as well as the rest of the state.
Overall, the office market in suburban Maryland is showing strong growth, despite the declining investments occurring in downtown Washington, D.C. Prince George’s County is poised to end 2016 strongly, with many new office investment sales.
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*Maryland counties surrounding Washington DC – Prince George’s County, Montgomery County, Howard County and Anne Arundel County
**All numbers and statistics come from the CoStar Group