Amazon Web Services signed the largest lease of the quarter for 268,240 square feet at 13820 Sunrise Valley Drive in the Herndon submarket. Amazon signed four deals all of which were in the top ten largest deals of the quarter. Cumulatively, they signed for 585,000 square feet in National Landing.
Freddie Mac reached a deal to lease 151,949 square feet at 1550 Westbranch Drive in Tysons Corner.
Demand & Supply
Demand for office space grew by 568,455 square feet during the second quarter of the year. It marked the seventh consecutive quarter of positive net absorption in the market and the eleventh quarter of the last 12. This brings absorption up to 1.43 million year-to-date.
Demand for space in all three classes increased during the quarter. Absorption for Class A space was 305,279 square feet while combined Class B & C absorption was 263,176 square feet.
Comstock broke ground on their third office tower at Reston Station during the quarter. The 260,000 square foot building is being built on a speculative basis and is expected to deliver in the second half of 2021.
The Boro Loft is expected to be completed during the third quarter of this year. The building secured the first lease by the coworking group SPACES which will occupy 51,422 square feet at the project.
Vacancy & Rental Rates
As a result of increased demand, the vacancy rate fell from 16.9 percent to 16.6 percent during the quarter. The vacancy rate stood at 17.4 percent a year ago.
The Class A vacancy rate fell from 17.6 percent to 17.4 percent during the quarter. Both Class B and C vacancy rates also fell, from 18.1 percent to 17.8 percent and 11.1 percent to 10.8 percent, respectively.
During the quarter, the direct average asking rental rate decreased $0.09 (0.3%) to $32.70 per square foot. However, the rate increased by $0.70 (2.2%) from the same time last year.
The Class A direct average asking rate increased $0.19 during the quarter to end at $36.60 per square foot. An increase was also observed in the combined Class B & C rental rate, increasing $0.23, to end the quarter at $29.44 per square foot.