Washington, D.C. Quarterly Market Report. 3rd Quarter lpcwashingtondc.com

Transcription

1 Washington, D.C. Quarterly Market Report

2 Table of Contents Washington, D.C. Leasing & Market Research Metropolitan D.C. Market Overview...3 Washington, D.C. Quarterly Overview...5 Washington D.C. Top Sales... Washington D.C. Top Ten Leases... 9 Market Spotlight, 3Q 17: CBD... East End CBD / East End Class A... 1 CBD / East End Class B Southwest... 1 West End / Georgetown Capitol Hill / NoMa...1 Capitol Riverfront Tysons Corner John Marvin Jones Senior Vice President Managing Director jmjones@lpc.com Elaine Clancy Senior Vice President eclancy@lpc.com Geoff Kieffer Senior Vice President gkieffer@lpc.com Adam Biberaj Senior Vice President abiberaj@lpc.com Robert Hines Senior Vice President rhines@lpc.com Merrill Turnbell Senior Vice President mturnbell@lpc.com John Olson Senior Vice President jeolson@lpc.com Terry Amling Senior Vice President tamling@lpc.com Joe Mehok Director of Research jmehok@lpc.com

3 Metropolitan D.C. Market Overview Overall Market Summary The Washington, DC Metropolitan commercial real estate market is comprised of approximately 1. million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. The total vacancy rate decreased to 15.3% in the third quarter, down from 15.% at the end of the second quarter. The market recorded 1,7,9 square feet of net absorption in the third quarter, a significant improvement from the -51,5 square feet absorbed in the second quarter. Leasing activity totaled approximately 5.9 million square feet in transactions signed. The largest lease executed was by Marriott for 7, square feet at 775 Wisconsin Avenue, a proposed building, in Bethesda, MD. Four buildings, totaling 1,53, square feet, broke ground ( DC, 1 VA, 3 MD); bringing the yearto-date 17 under construction pipeline total to 9,99,197 square feet (% pre-leased). Four buildings, totaling 1,3,9 square feet and % leased, delivered this quarter (all were in Virginia). There were nineteen sale transactions in the third quarter, totaling $1.79 billion. The largest sale was 9 1th Street, NW in Washington, DC trading for $151,, ($1,3 psf). Average asking rental rates increased $. to $3.7 per square foot, Full Service. From August 1 - August 17 the DC Metropolitan area had a net increase of 7, jobs (3, private sector,, government) representing.1% growth, while the unemployment rate increased to 3.7%. The DC Metro is ranked 7th nationally in unemployment. DC VA MD Metro Area (YTD) Direct Vacancy (3Q 17).3% 15.% 15.% 1.% Total Vacancy (3Q 17) 11.3% 1.% 15.5% 15.3% Total Net Absorption (YTD 17) 35,5 SF 1.1 M SF 391,739 SF 1.9 M SF (YTD 17).1 M SF 9. M SF.9 M SF 1. M SF 3 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

4 Metropolitan D.C. Market Overview Outlook The Washington, DC Metropolitan market showed signs of improvement in the third quarter as total vacancy ticked down and absorption was positive across all three markets. Asking rents and sales volume ticked up for the region as well Regional employment experienced.1% of growth YOY ending August 17, primarily driven by the private sector, specifically the Educational & Health Services industry. While the unemployment rate increased slightly to 3.7%, the DC Metro area s ranking improved to 7th in unemployment nationally (among cities of 1 million+ people). Looking ahead, the private sector will continue to be the primary driver for employment in the Washington, DC Metropolitan area. With GSA lease approvals being held up in the Senate, expect GSA leasing activity to remain sluggish for the remainder of 17. While overall market fundamentals improved, the Washington, DC region should remain a tenant s market. Aggressive landlords will continue to offer generous concessions and initiate capital improvements to remain competitive. While the awarding of a new, massive FBI Headquarters has been shelved for the time being, the entire region is now vying for the for the new, and larger, Amazon HQ Headquarters requirement. 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

5 Washington, D.C. Market Summary The Washington, DC office market consists of 775 buildings over 5, square feet, totaling approximately 1.3 million square feet of rentable space. As of August 17, the unemployment rate for the District of Columbia increased to.%, while the Washington, DC Metropolitan area increased to 3.7% (ranking 7th nationally). The national unemployment rate remained flat at.%. The DC Metropolitan area gained 7, net new jobs from August 1-August 17, representing.1% growth. Educational & Health Services lead the private sector with 19,7 new jobs; while the Government added,. The largest public sector lease executed this quarter was by the DC Government for 11,7 square feet at 15 Half Street, SE in the Capitol Riverfront submarket. Amtrak signed the largest private sector lease with a,3-square-foot transaction at G Street, NE in the NoMa submarket. Direct Vacancy Total Vacancy Net Absorption (SF) Leasing Activity (SF) (SF) U/C Percent Pre-Leased 3Q 17 Q 17 3Q 1.3%.5%.% 11.3% 11.% 11.% 157,35 7,7 7, M. M.5 M 5.1 M 5. M.1 M 5% 53% % There were six sale transactions in DC, totaling $1,39,7,. The largest sale was Oxford Properties / Norges Bank purchasing 9 1th Street, NW for $151,, ($1,37 psf) from JBG Companies / ICG Properties. (SF) Vacancy Rate $5.39 $5.3 $51.5 The total vacancy rate in the District decreased to 11.3% at the end of the third quarter, totaling approximately 1.1 million square feet of vacant space. The Class A total vacancy rate decreased to 1.9%, while Class B total vacancy increased to 9.1%. Sales Volume $1. B $5 M $1.7 B Unemployment DC Metro Area 3.7% 3.%.% Sublet vacancy increased to 1.% at the end of the third quarter, totaling approximately 1. million square feet. 5 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

6 Washington, D.C. Net Absorption & Leasing Net Absorption Vacancy Rate 1 The Washington, DC market recorded 157,35 square feet of net absorption in the third quarter; totaling 35,5 square feet absorbed YTD 17. The -year average for net absorption in the District is 1. million square feet absorbed per year Contributing to the positive absorption this quarter included the Federal Elections Commission (FEC) moving into 9,1 square feet at 5 First Street, NE - Sentinel Square II. 1-1 '7 ' '9 ' '1 '1 '1 The Central Business District (CBD) market posted 7, square feet of net absorption in the third quarter; totaling -111, square feet absorbed YTD 17. The East End market posted -133,3 square feet of net absorption in the third quarter; totaling -,559 square feet absorbed YTD 17. Net Absorption A total of 1,, square feet of leases were executed in the third quarter, bringing the YTD 17 total to,,33 square feet leased. The -year average for leasing activity in DC is 9.7 million square feet annually. The largest lease executed this quarter was by the DC Government for 11,7 square feet. All other leases in the Top Ten ranged between,3 to 31,5 square feet, including seven private sector and 3 public sector transactions. Fifteen buildings were under construction in Washington, DC at the end of the third quarter, totaling 5,1,917 square feet (5% pre-leased). '7 ' '9 ' 15 1 '1 '1 '1 Pre-leasing remained strong at 7% in the core markets of the CBD and East End, while the rest of the DC market improved to % pre-leased. 9 Buildings expected to deliver in the fourth quarter 17 include; Maine Avenue, SW (, sf, 7% pre-leased) and 7 Pennsylvania Avenue, SE (3,5 sf, 31% pre-leased). 3 '7 ' '9 ' '1 '1 '1 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

7 Washington, D.C. (cont d) Sales Volume Buildings expected to deliver in 1 include; 99 M St, SE (31, sf, % pre-leased), Maine Ave, SW (5, sf, 5% pre-leased), 11 Pennsylvania Ave, NW (,, 53% pre-leased), th St, NW (75, sf, % pre-leased), 91 th St, NW (, sf, 7% pre-leased), 55 New York Ave, NW (75, sf, % pre-leased), 15 M St, NE - Constitution Square IV (93, sf, % pre-leased), and 1 M St, SE (13, sf, 1% preleased). Massachusetts Avenue, NW (,99 sf, % pre-leased) and 5 Massachusetts Avenue, NW (559,91 sf, % pre-leased) at Capitol Crossing are expected to deliver in 1 as well. Sales Volume ($ Billions) '7 ' '9 ' '1 '1 '1 5 L Enfant Plaza, SW (15, sf, 5% preleased) and 131 Pennsylvania Avenue, NW (3,5 sf, % pre-leased) are expected to deliver in 19. Buildings expected to break ground in the fourth quarter 17 include; 19 N Street, NW (5, sf, 3% pre-leased to Goodwin & Procter) and 5 L Street, NE (539,93 sf, % pre-leased to the FCC). No buildings delivered in the third quarter 17. The -year average for new inventory added to the District is 1.7 million square feet per year. Vacant Space Available & Vacancy by Class SF Vacant (Millions) 1 13.% 1.%.% 1 1 (%) of Building Class Vacant Buildings currently under renovation include; Alexander Court, 7 K Street, NW, K Street, NW, 171 Rhode Island Avenue, NW, 11 1th Street, NW, and 11 L Street, NW. A B C Outlook Washington, DC should continue to be a tenant s market through abundant supply and flat demand. The Class B market is expected to tighten further as more owners transition Class B product to Class A through extensive capital improvements. The consolidation and downsizing of the federal real estate footprint remains a priority of the GSA. Aggressive landlords continue to offer generous concessions (free rent and TI s) to be competitive. 7 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

8 Washington, D.C. Washington, D.C. Top Sales 9 1th St, NW Submarket CBD 11 New York Ave, NW Submarket East End th St, NW Submarket CBD 3 E St, SW Two Independence Square Submarket Southwest Date Sold July 17 Price Buyer Seller RBA Class $151,, ($1,3 PSF) Oxford Properties / Norges Bank JBG Companies / ICG Properties 1, SF A Leased 75.% Cap Rate.% Date Sold July 17 Price Buyer Seller RBA Class $39,3, ($1,11 PSF) Oxford Properties / Norges Bank Morgan Stanley / Property Group 35, SF A Leased 9.% Cap Rate.% Date Sold September 17 Price Buyer Seller RBA Class $3,, ($7 PSF) Unizo Holdings Company Clarion Partners 71,39 SF A Leased 91.% Cap Rate.5% Date Sold July 17 Price Buyer Seller RBA Class $359,, ($59 PSF) Hana Asset Management Piedmont Office Realty Trust 5,97 SF A Leased % Cap Rate 5.7% N. Capitol St, NW 51 School St, SW Submarket NoMa Submarket Southwest Date Sold September 17 Price Buyer Seller RBA Class $119,75, ($31 PSF) Boyd Watterson Asset Mgmt. CIM Commercial Trust Corp. 31, SF A Leased 93.% Cap Rate 5.55% Date Sold July 17 Price Buyer Seller RBA Class $1,557, ($5 PSF) David Schaeffer Robert N. Wolpe, SF A Leased 1.% Cap Rate Notes N/A High Vacancy 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

9 Washington, D.C. Top Ten Leases In the third quarter 17 there were eight new leases and two renewals in the Top Ten, including two leases over, square feet. The largest lease executed this quarter was in the public sector by the DC Government for 11,7 square feet at 15 Half Street, NE. The largest private sector lease was signed by Amtrak for,3 square feet at G Street, NE. Facebook and Yelp signed leases of significant size at 575 7th Street, NW - Terrell Place, in the East End market. Both tenants represent organic growth and future absorption for the market, as well as, giving credibility to DC s ever growing technology sector. Goodwin Procter was the only law firm in the Top Ten this quarter, executing a,39-square-foot pre-lease at 19 N Street, NW. 19 N is expected to break ground in the fourth quarter 17 and total 5, square feet upon delivery in mid- 19. A total of 1,, square feet was leased in the third quarter 17, representing a 7.3% decrease from the,15,1 square feet leased in the second quarter. The market has totaled,,33 square feet of leasing activity through three quarters of 17; equaling 3% of the yearly 9.7 million-square-foot -year average. 15 Half St, SE DC Government 11,7 SF New Martin Luther King Ave, SE DC Government - Department of General Services, SF New G St, NE Amtrak,3 SF New 375 E St, SW Patriots Plaza II GSA - Surface Transportation Board (STB) 3,5 SF Renewal 1 K St, NW Alexander Court - South Building Bates White 575 7th St, NW Terrell Place Yelp 7,5 SF 5,73 SF New New 19 N St, NW Goodwin Procter,39 SF New / Pre-lease 3 K St, NW Washington Harbour Rally Health, SF Renewal 575 7th St, NW Terrell Place Facebook 73, SF New 15 New York Ave, NW Bully Pulpit 31,5 SF New 9 1 Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

10 Market Spotlight CBD '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the CBD market decreased to 9.3% at the end of the third quarter, down from 9.5% at the end of the second quarter. The CBD recorded 7, square feet of net absorption in the third quarter, up from the -73,533 square feet absorbed in the second quarter. s contributing to the positive net absorption include Wilkinson Walsh moving into 3,51 square feet at 1 M Street, NW and Defense Analysis moving into 1,5 square feet at 171 Pennsylvania Avenue, NW. Leasing activity decreased to 7, square feet in the third quarter, down from the 7,9 square feet leased in the previous quarter. s executing leases this quarter include Bates White signing for,35 square feet at 1 K Street, NW and Goodwin Procter signing a pre-lease for,39 square feet at 19 N Street, NW. 9 1th Street, NW sold to Oxford Properties / Norges Bank for $151,, ($1,3 psf), setting a new DC record on a price per square foot basis. Year Averages (7-1) Net Absorption 5,37 SF / Year 1,197 SF / Year 3.1 M SF / Year Market Stats Inventory. M SF Direct Vacancy.% Total Vacancy 9.3% YTD 17 Absorption -111, SF YTD 17 1,9,513 SF 39, SF Percent Pre-Leased 71% YTD 17 SF Two buildings are currently under construction in the CBD; 11 Pennsylvania Avenue, NW (, sf, 53% pre-leased to Cleary Gottlieb) and K Street, NW (15, sf, % pre-leased to International Finance Corporation). 7: $7. 1: $53.79 YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

11 Market Spotlight East End '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the East End market increased to 13.% at the end of the third quarter, up from 13.% at the end of the second quarter. The East End recorded -133,3 square feet of net absorption in the second quarter, a further drop from the -,3 square feet absorbed in the second quarter. s contributing to the negative net absorption include the National Park Service vacating 11,79 square feet at 1 Eye Street, NW and The U.S. Telecom Association vacating 3, square feet at 7 1th Street, NW. Leasing activity decreased to 7,59 square feet in the third quarter, down from the 5,75 square feet leased in the previous quarter. s executing leases this quarter include Facebook and Yelp signing for 73, square feet and 5,73 square feet respectively at 575 7th Street, NW - Terrell Place. 11 New York Avenue, NW sold to Oxford Properties / Norges Bank from Morgan Stanley / Property Group Partners for $39,3, ($1,11 psf). Year Averages (7-1) Net Absorption,355 SF / Year 9, SF / Year 3.5 M SF / Year Market Stats Inventory. M SF Direct Vacancy 1.1% Total Vacancy 13.% YTD 17 Absorption -,559 SF YTD 17 1,7,571 SF,1,55 SF Percent Pre-Leased 7% YTD 17 SF A total of four buildings are currently under construction in the East End. 7: $9.73 1: $5.3 YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

12 Market Spotlight CBD / East End Class A '7 ' '9 ' '1 '1 '1 Total Net Absorption 1 '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the CBD / East End Class A market increased to 1.% at the end of the third quarter, up from 1.% at the end of the second quarter. The Class A market recorded -9,3 square feet of net absorption in the third quarter, a further drop from the -93,719 square feet absorbed in the second quarter. s contributing to the negative absorption include Skadden Arps vacating 13,71 square feet of sublease space at 7 1th Street, NW. Leasing activity totaled 5,591 square feet in the third quarter, a decrease from the 715,3 square feet leased in the previous quarter; totaling,,57 square feet leased YTD 17. s executing leases this quarter include Bully Pulpit signing for 31,5 square feet at 15 New York Avenue, NW and Feeding America signing for 13,7 square feet at 17 Eye Street, NW. Both 9 1th Street, NW and 11 New York Avenue, NW sold to Oxford Properties / Norges Bank; 9 1th traded for $151,, ($1,3 psf), while 11 New York traded for $39,3, ($1,11 psf). A total of six Class A buildings ( East End, CBD) were under construction at the end of the second quarter, totaling,,55 square feet. Year Averages (7-1) Net Absorption Market Stats Inventory 31,35 SF / Year 1,19 SF / Year.1 M SF / Year 57.1 M SF Direct Vacancy 1.9% Total Vacancy 1.% YTD 17 Absorption YTD 17 3,7 SF. M SF. M SF Percent Pre-Leased 7% YTD 17 7: $ : $5. SF YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

13 Market Spotlight CBD / East End Class B '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights The vacancy rate in the CBD / East End Class B market decreased to 7.% and the end of third quarter, down from 7.5% at the end of the second quarter. The Class B market continues to out-pace the Class A market in total vacancy; 7.% (Class B) vs. 1.% (Class A). Class B buildings recorded a total of -,391 square feet of net absorption in the third quarter. While net absorption was negative for Class B buildings, tenants moving into the market include Monument Realty taking occupancy of 11,557 square feet at 75 17th Street, NW and the Walton Family Foundation moving into, square feet at 919 1th Street, NW. Leasing activity totaled 55,3 square feet in the third quarter, a decrease from the 59,57 square feet leased in the previous quarter; totaling 1,1,579 square feet leased YTD 17. s executing leases this quarter include Metro Offices renewing,17 square feet at 15 Connecticut Avenue, NW, IMPAQ subleasing 1, square feet at 135 G Street, NW, and the U.S. Soccer Federation signing for 1,3 square feet at 1 Connecticut Avenue, NW. Year Averages (7-1) Net Absorption Market Stats Inventory -,9 SF / Year SF / Year.5 M SF / Year 33.3 M SF Direct Vacancy.5% Total Vacancy 7.% YTD 17 Absorption YTD 17-1, SF 1.3 M SF SF Percent Pre-Leased % YTD 17 7: $3.17 1: $5.7 SF YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

14 Market Spotlight Southwest '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the Southwest market increased to 13.1% at the end of the third quarter, up from 1.3% at the end of the second quarter. Year Averages (7-1) Net Absorption 159,3 SF / Year 19,99 SF / Year The Southwest recorded -5,119 square feet of net absorption in the third quarter, a substantial drop from the 3,3 square feet absorbed in the second quarter. Market Stats 17,15 SF / Year Leasing activity decreased to 1,1 square feet in the third quarter, down from the 79,77 square feet leased in the previous quarter. Leases executed this quarter include the GSA - Surface Transportation Board (STB) renewing 3,5 square feet at 375 E Street, SW and The Urban Institute signing for 5,55 square feet of expansion space at 5 L Enfant Plaza, SW. Two buildings sold in the Southwest in the third quarter; 3 E Street, SW - Two Independence Square traded to Hana Asset Management for $359. million ($59 psf) and 51 School Street, SW traded to David Schaeffer for $1. million ($5 psf). Inventory 11. M SF Direct Vacancy 1.% Total Vacancy 13.1% YTD 17 Absorption 19, SF YTD 17 71,7 SF 5, SF Percent Pre-Leased % YTD 17 SF At the end of the quarter, three buildings were under construction; 5 L Enfant Plaza, SW (15, sf, 5% pre-leased), Maine Avenue, SW (, sf, 7% pre-leased), and Maine Avenue, SW (5, sf, 5% pre-leased). 7: $. 1: $51.7 YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

15 Market Spotlight West End / Georgetown '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the West End / Georgetown market increased to.5% at the end of the third quarter, up from.3% at the end of the second quarter. The West End / Georgetown recorded -,7 square feet of net absorption in the third quarter, a further decrease from the -19, square feet absorbed in the second quarter. While the submarket experienced negative net absorption for the quarter overall, tenants moving into the West End / Georgetown include Le Printemps absorbing,55 square feet at 155 3rd Street, NW. Leasing activity increased to 5,37 square feet in the third quarter, up from the,97 square feet leased in the previous quarter. Leases executed this quarter include Rally Health renewing, square feet at 3 K Street, NW - Washington Harbour East. Year Averages (7-1) Total Absorption 3,19 SF / Year 3,9 SF / Year 99,739 SF / Year Market Stats Inventory 7. M SF Direct Vacancy.% Total Vacancy.5% YTD 17 Absorption -,311 SF YTD 17 1,5 SF SF Percent Pre-Leased % YTD 17 SF 7: $5. 1: $51.51 YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

16 Market Spotlight Capitol Hill / NoMa '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the Capitol Hill / NoMa market remained flat at.% at the end of the third quarter. Capitol Hill / NoMa recorded 37,55 square feet of net absorption in the third quarter, up substantially from the -3, square feet absorbed in the second quarter. Contributing to the positive net absorption includes the Federal Elections Commission (FEC) moving into 9,1 square feet at 5 First Street, NE - Sentinel Square II and Amtrak moving into,15 square feet at 1 Massachusetts Avenue, NW. Leasing activity decreased to 3,9 square feet in the third quarter, down from the 5,9 square feet leased in the previous quarter. Leases executed this quarter include Amtrak signing for,3 square feet at G Street, NE and Mylan signing for,55 square feet at N. Capitol Street, NW. N. Capitol Street, NW sold to Boyd Watterson Asset Management from CIM Commercial Trust Corporation for $119,75, ($31 psf). Year Averages (7-1) Net Absorption 3,39 SF / Year,55 SF / Year 977,3 SF / Year Market Stats Inventory 1. M SF Direct Vacancy.% Total Vacancy.% YTD 17 Absorption 317, SF YTD 17 1,9,53 SF 1.7 M SF Percent Pre-Leased 33% YTD 17 SF At the end of the quarter four buildings, totaling 1,9,37 square feet, were under construction in the Capitol Hill / NoMa market. 7: $.7 1: $51.9 YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.

17 Market Spotlight Capitol Riverfront '7 ' '9 ' '1 '1 '1 Total Net Absorption '7 ' '9 ' '1 Direct Vacancy Rate '1 '1 Highlights Total vacancy in the Capitol Riverfront market decreased to 7.1% at the end of the third quarter, down from.9% at the end of the second quarter. The Capitol Riverfront recorded, square feet of net absorption in the third quarter, a decrease from the 9,79 square feet absorbed in the second quarter. s contributing to the positive net absorption include African Wildlife Federation moving into 15, square feet at 1 New Jersey Avenue, SE and General Dynamics moving into 13,5 square feet at M Street, SE. Leasing activity increased to 19,79 square feet in the third quarter, up from the 59,37 square feet leased in the previous quarter. s executing leases this quarter include the DC Government signing for 11,7 square feet at 15 Half Street, SE and Credit Union National Association (CUNA) signing a pre-lease for,13 square feet at 99 M Street, SE. Two buildings are currently under construction in the Capitol Riverfront; 99 M Street, SE (31, sf, % pre-leased) and 1 M Street, SE (13, sf, 1% pre-leased). Year Averages (7-1) Net Absorption Market Stats Inventory 1,11 SF / Year 155,15 SF / Year,5 SF / Year 3. M SF Direct Vacancy.% Total Vacancy 7.1% YTD 17 Absorption YTD 17 17,33 SF,11 SF 31, SF Percent Pre-Leased % YTD 17 7: $.1 1: $.35 SF YTD 17: $ Constitution Ave., Suite 35 East Washington D.C Wilson Blvd., Suite Arlington, VA 73.5.