Market Summary

The Columbia office market consists of 10.2 million square feet of multi-tenant office buildings situated in the Central Business District (CBD) and four suburban markets. As of December 31, 2000, the overall Columbia office market was 93.0% occupied, an increase from 92.1% at year-end 1999. The increased occupancy, coupled with new buildings completed during the last twelve months, indicates the absorption during the year was over 225,000 square feet. Absorption was very strong in the year 2000, but the absorption rate is slowing due to the availability of sublease space appearing in the market.

As of year-end 2000, the occupancy rate for Class A space was 94.2%. Additionally, there was only 90,000 square feet of new office space under construction in the market, all of which is located in the CBD. With the overall occupancy at an all time high and with limited new construction, the Columbia market has experienced increasing base rental rates in most market areas, but most notably in the CBD.

Central Business District

The CBD continued its stellar condition increasing its occupancy from 92.0% as of year-end December 1999 to 95.4% at year-end 2000. The market continues to see expansions of service related companies and law firms within the CBD. Also, the market is benefiting from the presence of State government as many new companies enter the market to serve governmental agencies. Rental rates in the newer Class A buildings continued to escalate at a rapid pace during 2000, due to the high levels of occupancy and limited options for tenants in search of available space. However, the slowing absorption rate, coupled with the availability of sublease space, may reduce the ability to increase rates much further.

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