Marcus & Millichap

Washington, DC Local Retail Report

Second Quarter 2019

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Northern Virginia Development Weighs on Vacancy;

High Demand for Retail Space in Core D.C.

Modest development improves rents in District of Columbia and vacancy in Maryland. Steadily increasing population density inside the District continues to raise the demand for retail services, which is enabling rents to appreciate faster than in most other parts of the market. Vacancy is also expected to improve as construction delays push new development to one of its lowest levels in more than a decade. Of the space opening in 2019, about half is ground-floor retail within larger mixed-use projects. Supply growth is also moderating in suburban Maryland. Worman’s Mill Town Center in Frederick mark’s the region’s largest single delivery at 68,000 square feet. As retail construction declines in Maryland, tenant demand will continue to compress vacancy here. However, the unoccupied space left is generally older and in less-central locations, skewing the average asking rent in the downward direction this year in Maryland.

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