DTZ MD Survey 2q15

Market Report
Suburban Maryland | 2nd Quarter 2015
Contents
DC Metropolitan Area Overview.....................................................................................................3

Suburban Maryland & Map.........................................................................................................4-6
Bethesda/Chevy Chase.....................................................................................................................7
North Bethesda...................................................................................................................................8
Rockville..............................................................................................................................................9
North Rockville..................................................................................................................................10
Gaithersburg/Germantown.............................................................................................................11
Silver Spring..............................................................................................................................................12
Prince Georges County..........................................................................................................................13
Appendix..................................................................................................................................................14
Tables..................................................................................................................................................14-22
Methodology & Definitions..................................................................................................................23
About DTZ...............................................................................................................................................24
DTZ | 2
Washington, DC Metropolitan Area

DC Metro Region Rises off the Bottom
After a lackluster performance in 2014, by midyear 2015 it was clear
WASHINGTON, DC METRO
Economic Indicators
that the DC Metro economy is back on track. Job growth in 2014 was
Q2 14
Q2 15
below average with just over 19,000 new nonfarm payroll jobs for the
DC Metro Employment
3.11M
3.18M
year; in fact the DC Metro Region was last among major metropolitan
DC Metro Unemployment
5.0%
4.6%
regions in job growth in 2014. Compare that to June 2015: over-the-year
U.S. Unemployment
6.1%
5.3%
Q2 14
Q2 15
Overall Vacancy
15.6%
16.1%
Net Absorption
154K
666K
Under Construction
3.9M
5.8M
Deliveries
2.1K
567K
$35.91
$35.29
12-Month
Forecast
employment in the region was 64,000 net new jobs well above the
the return of office-using job growth to the region. Overall office-using
employment (including federal government employment) in the DC
Region shrank by 12,000 jobs in 2014. At midyear 2015, office-using
employment had turned positive, driven by a surge of over 20,000 jobs
in the high- paying Professional and Business Services sector since June
of 2014. A closer examination of that very important sector shows that
consulting has been leading the way in employment growth, adding 9,500
jobs from since June 2014, administrative jobs adding 8,100 positions
and an even a modest growth in executive level management and legal
services in the region.
Market Indicators
Average Asking Rent (FS)
12-Month
Forecast
Net Absorption/Asking Rent

4Q TRAILING AVERAGE
2.0
$36.50
Major regional demand drivers are at an inflection point. After being a

drag on the local economy for the last four years, the Federal Government
has reached stabilization both in terms of spending and employment. The
$36.00
1.0
$35.50
federal contracting community that is an integral part of the suburban

office landscape is estimated to be about 65% of the way through its
round of downsizing. Finally, about 80% of law firms that account for a
$35.00
0.0
$34.50
$34.00
third of the District of Columbias downtown core market footprint have

transacted deals. While these law firms as a whole have reduced size
-1.0
requirements and returned 1.2 million square feet to the market from
2010
2011
bottom in 2014 and is now poised for positive, if modest, conditions
2015
$33.50
Asking Rent, $ PSF
NET ABSORPTION - DELIVERIES - VACANCY
10
importantly, the decrease in regional vacancy signals a reversal from
15 straight quarters of flat or rising vacancy. The downtick in vacancy
coincides with overall positive absorption of 670,000 sf for the second
MSF
12
at 16.1%, a 0.1% decrease from its level in the first quarter of 2015. More
16%
12%
8%
a backdrop, investment in the region continues unabated. As of midyear
2015, $4 billion in transaction volume had occurred in the office sector
-2
signaling another robust year for investors bullish on prospects for the
-4
future of the DC Region.
2014
Washington, DC Metropolitan Area
moving forward in the near term. The vacancy rate for the region stands
quarter, bringing the midyear absorption total to 390,000 sf. With this as
2013
Net Absorption, MSF
2011-2014, the impact of any future downsizing will be far less dramatic.
In retrospect, it appears that the DC Metro regions office market hit
2012
Vacancy Rate
historical average of 35,000 jobs per year. Adding to the good news is
4%
05
06
07
08
Net Absorption
09
10
11
Deliveries
12
13
14
Vacancy Rate
YTD
15
0%
www.dtz.com | 3
Suburban Maryland
Economy
Market Indicators
While DC metro is among the most competitive job markets across the country
Q2 14
Q2 15
12-Month
Forecast
with a 4.6% unemployment rate, Montgomery County, in particular, has shown
Overall Vacancy
17.6%
18.5%
strong employment numbers. The county had a 4.0% unemployment rate as
Net Absorption
333K
(80K)
of the end of June 2015a 20 basis-point decline from January 2015 and down
Under Construction
508K
634K
30 basis points year-over-year. Employment growth in Suburban Maryland
Deliveries
592K
was equally robust with 19,000 more jobs in May 2015 compared to a year
Average Asking Rent
$26.06
$26.12
prior. While the employment growth was predominantly in non-office-using

sectors, Suburban Maryland did see modest gains in Professional and Business
Services employment. Suburban Maryland continues to see activity in many
Submarket Comparison
MAJOR TENANT VACANCIES VS. PENDING
1,400
years of budget cuts, the spending bill (so-called CR-Omnibus budget)
1,200
passed by Congress late last year will likely drive demand out of agencies such
1,000
as the Centers for Disease Control and the National Institutes of Health. The
effect of this demand on the office sector is not expected to be entirely positive
as many of the large federal leases in the market will consist of consolidations
and moves to federally owned space, thus bringing more large blocks to market.
Square Feet, 000s
major sectors driven by federal government spending. After four consecutive
800
600
400
200
0
Bethesda/CC N Bethesda
Market Overview
Rockville
Vacated (Q4 13 to Q1 15)
N Rockville
Gaith./Germ.
PG County
Pending Vacancies (Remaining 2015)
After registering positive demand at the beginning of 2015, the Suburban

Maryland office market experienced a return to negative growth during the
second quarter of 2015. Net absorption registered a negative 79,600 square
feet (sf), bringing year-to-date absorption to 36,600 sf. The overall vacancy
rate increased 0.1 percentage points from the previous quarter, rising to
18.5% at the end of the second quarter. Suburban Maryland typically relies
heavily on the public sector to pace absorption in the region, but during
the second quarter government demand was anemic, consisting mainly of
renewals. In fact, the largest lease signed in Suburban Maryland during the
second quarter of 2015 was a renewal: the General Services Administration
(GSA) renewed for 80,000 sf at 7700 Wisconsin Avenue in the Bethesda/
Chevy Chase submarket. In addition to weak public sector demand, the
private sector also failed to generate significant leasing momentum. The
largest non-renewal signed during the second quarter was that of Berkeley
Point Capital which signed for 22,800 sf, also at 7700 Wisconsin Avenue.
Overall Vacancy
19.0%
18.0%
17.0%
Historical Average = 16.2%
16.0%
15.0%
14.0%
13.0%
12.0%
11.0%
10.0%
2010
2011
2012
2013
2014
2015
Large Blocks of Contiguous Space

Southern PGC
With demand still tepid in Suburban Maryland, average asking rents have
remained relatively flat over the past few months. Rents increased, albeit
slightly, by $0.05 from the previous quarter and $0.14 from a year ago to
end the second quarter at $26.12 per square foot (psf) on a full service basis.
Rent growth in the near term could be limited as some owners have dropped
Central PGC
Northern PGC
Silver Spring
100k to 150k
150k to 200k
Rockville
North Bethesda
tenant rollover. Retaining current tenants and attracting new ones continues
Bethesda/ Chevy Chase
space efficiency across industry sectors.
50k to 100k
North Rockville
asking rates by a couple of dollars for credit tenants in the face of future
to be a challenge for building owners, particularly with the intense focus on
25k to 50k
Gaithersburg/ Germantown
200k +
10
20
30
# of Blocks
DTZ | 4
Maryland Office Submarkets

Maryland Office Submarkets
CLARKSBURG
124
R
WA
HO
27
D
CO
TY
UN
32
355
GERMANTOWN /
GAITHERSBURG
270
OLNEY
650
NORTH ROCKVILLE
124
370
200
Shady Grove
28
355
650
28
NORTH POTOMAC
ROCKVILLE
200
97
Rockville
WHEATON
270
Glenmont
183
190
Twinbrook
NORTH BETHESDA
NORTH
SILVER SPRING
Wheaton
White Flint
29
Forest Glen
MO
PR NTG
IN
CE OME
R
GE
OR Y CO
UN
GE
S
T
CO Y
UN
TY
Grosvenor-Strathmore
495
187
355
Friendship Heights
193
Silver Spring
PRINCE GEORGES
COUNTY
Takoma
650
410
ST
495
M
RI AR
CT YL
OF AN
CO D
LU
M
Bethesda
190
SILVER SPRING
185
DI
INIA
VIRG
BETHESDA /
CHEVY CHASE
Medical Center
BI
A
POTOMAC
Fort Totten
www.dtz.com | 5
Top Transactions
Key Lease Transactions 2Q 15
PROPERTY
TENANT
TRANSACTION TYPE
SUBMARKET
7700 Wisconsin Avenue
SF
80,000
GSA
Renewal
Bethesda/Chevy Chase
14400 Sweitzer Lane
60,500
SI Corporation
Renewal
Northern PGC
22,800
Berkeley Point Capital
Relet
2273 Research Boulevard
22,700
Turning Point Global Solutions
Relet
North Rockville
820 W Diamond Aveneu
13,500
Icon Clinical Research
Relet
Gaithersburg
9601 Blackwell
13,400
Shady Grove Orthopedics
Relet
Rockville
7845 Walker Drive
13,300
GSA Probation and Parole
Relet
Northern PGC
4520 East-West Highway
10,100
3E Company
Renewal
SELLER/BUYER
PRICE
SUBMARKET
Key Sales Transactions 2Q 15

PROPERTY
SF
353,000
MRP JV Rockpoint / JP Morgan
$150,000,000
Bethesda / Chevy Chase
4520 East-West Highway
174,400
Intelligent Decisions / EBA Engineering
$63,500,000
Bethesda / Chevy Chase
9600 Blackwell Road
102,600
LNR Partners / True North
$17,175,000
North Rockville
6710 Oxon Hill Road
118,300
PPM America / Rickman Development
$14,630,000
Southern PGC
Suburban Maryland Office Market
Suburban Maryland Office Market
2.0
0.0
8%
-0.5
14
MSF
12%
25%
16
Vacancy Rate
0.5
30%
18
16%
1.0
MSF
20
20%
1.5
20%
12
10
15%
10%
4%
-1.0
-1.5
Inventory by Class and Vacancy by Submarket, Second Quarter 2015
05
06
07
08
Net Absorption
09
10
11
Deliveries
12
13
14
Vacancy Rate
YTD
15
0%
5%
2
0
Vacancy Rate
Net Absorption - Deliveries - Vacancy, Second Quarter 2015
Gaith./Germ. Silver Spring
Class A
Rockville
N Bethesda Bethesda/CC N Rockville PG County
Class B
Class C
0%
Vacancy %
DTZ | 6
Net Absorption
(36,700) SF
Demand was tepid in the Bethesda/Chevy Chase (BCC) submarket

during the second quarter of the year. Following two consecutive
quarters of positive absorption, BCC experienced negative absorption
of 36,700 sf which brought net absorption for the first six months of
2015 from a positive to negative 17,000 sf. The main driver of negative
demand during the second quarter was Microsoft returning two full
floors (53,500 sf) to the market at 5404 Wisconsin Avenue. With
space being returned, vacancy rose by 30 basis points to 11.8%. Despite
negative demand from Class A buildings during the second quarter,
high-quality product is still performing quite well in the submarket.
BCCs relet vacancy rate for Class A buildings remains the lowest in
Suburban Maryland at 7.3%.
Gross leasing activity in Bethesda/Chevy Chase during the second
quarter was also relatively slow. The largest lease signed in Suburban
Maryland during the second quarter of 2015 was a renewal: the
General Services Administration (GSA) renewed for 80,000 sf
at 7700 Wisconsin Avenue. In addition to weak public sector
demand, the private sector also failed to generate significant leasing
momentum. The largest non-renewal lease during the second quarter
was that of Berkeley Point Capital which signed for 22,800 sf, also at
7700 Wisconsin Avenue. Other notable leases in the area consisted
of Kalamata Capital at 7315 Wisconsin Avenue for 2,400 sf and
NorthMarq Capital at 7600 Wisconsin Avenue for 6,900 SF.
Asking rents across all classes averaged $36.28 psf on a full service
basis, up 1.6% from the first quarter of 2015. Class A asking rents
recovered from the previous quarter, increasing nearly $0.40 back to
$39.85 psf. After Carr Properties delivery of 4500 East West Highway
in the final quarter of 2014, no other projects have been completed
and no buildings are under construction. Vacancy has been inching
upward in the submarket since last year, but with no deliveries during
the remainder of 2015 existing product should capture demand and
vacancy will likely stabilize.
Outlook
Governor Larry Hogan approved the Metro Purple line
over this past quarter. Expect the governor to take serious
measures in order to match the necessary funding needed for
the projects success. This is a big step for Suburban Maryland
and commuters throughout Montgomery and Prince Georges
County.
With NIHs rumored consolidation to their Bethesda campus,
expect up to 2,600 workers to move out of previously leased
space and into the 90 building campus, leaving numerous
buildings throughout suburban Maryland vacant.
Large blocks of space are becoming increasingly rare in
Bethesda. With several deals in the works for the remaining
spaces, demand should start to creep up the I-270 Corridor.
Under Construction
Deliveries
Asking Rent
0 SF
0 SF
$36.25 FS
Net Absorption Deliveries Vacancy

400
20%
300
16%
200
12%
100
8%
Vacancy Rate
11.8%
Square Feet, 000s
Vacancy
4%
-100
-200
05
06
07
08
09
Net Absorption
10
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%
Vacant and Available Space
MSF
*Arrows = Current Qtr Trend
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
0.2
0.5
0.4
1.2
1.0
Q4 11
Q4 12
Vacant
0.5
1.0
1.1
Q4 13
Q4 14
0.5
0.5
1.3
1.3
Q1 15
Q2 15
Marketed Available (not yet vacant)
Asking Rent
Full Service PSF
Market Indicators
$45
$43
$41
$39
$37
$35
$33
$31
$29
$27
$25
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
www.dtz.com | 7
North Bethesda
Vacancy
Net Absorption
Under Construction
Deliveries
Asking Rent
21.8%
11,400 SF
0 SF
0 SF
$29.67 FS
With positive demand, albeit modest, vacancy dropped by 0.1

percentage point from the previous quarter to 21.8%. Although
North Bethesdas vacancy is currently higher than most Suburban
Maryland submarkets, vacancy in the area could likely fall soon due
to two reasons. First, the availability rate in North Bethesda is a mere
1.4 percentage points above its vacancy rate which means there is a
shortage of supply coming back on the market from existing buildings.
Also, there are no developments currently under construction in the
submarket that would pull existing tenants from older buildings or add
to inventory. These two factors combined with stable demand should
see vacancy trend downward. Class A properties captured most of the
demand in the submarket, registering 10,738 sf of positive absorption
followed by Class B properties with a positive 992 sf. Class A asking
rents fell $0.65 over the second quarter to $30.64, contributing to the
decrease in overall asking rent from $29.72 psf to $29.67 psf.

500
400
300
200
100
0
-100
-200
-300
-400
-500
-600
24%
20%
16%
12%
8%
Vacancy Rate
In the second quarter of 2015, North Bethesda absorbed 11,400 sf

bringing its midyear-absorption total to 91,900 sf. North Bethesdas
mid-year 2015 absorption total is the highest in Suburban Maryland.
The fact that no Suburban Maryland submarket has a midyearabsorption total greater than 100,000 sf however is a testament to
the waning demand of Marylands leasing landscape. Demand was
positive for first-generation space during the second quarter of the
year. New space absorption registered 61,500 sf while relet and sublet
space both posted negative totals. The largest lease signed during
the second quarter in North Bethesda was that of Global Engineering
Solutions which leased 14,000 sf in Building A at 6700 Rockledge
Drive. Leasing activity during the quarter was down substantially as
the Global Engineering deal was the only lease signed greater than
10,000 sf.
Square Feet, 000s
4%
05
06
07
08
09
Net Absorption
10
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%

3.0
2.5
2.0
MSF
Market Indicators
0.8
1.0
0.0
0.1
2.3
2.2
2.2
Q4 14
Q1 15
Q2 15
0.6
1.5
1.0
1.7
1.4
1.4
Q4 11
Q4 12
0.5
0.0
0.1
Vacant
Q4 13
Outlook
While currently at a standstill, NIHs consolidations are
still expected to continue throughout 2015, returning
significant space to the market, notably at Executive
Boulevard.
Five million square feet of leases in Suburban Maryland

are set to expire from 2015-2017. The continued focus of
the federal government/GSA on consolidation, value and
efficiency will bring more space to market and drive rents
further downward
Marriotts pending relocation could add more than

900,000 sf of vacancy to the market, but vacancy should
remain stagnant in the near-term with the hotel companys
lease expiring in 2022 and most believing that the tenant
is only in the market for a hefty incentive package from the
state rather than a move to the District or NoVA.
Asking Rent
$37
$35
Full Service PSF
$33
$31
$29
$27
$25
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
DTZ | 8
Rockville
Vacancy
17.0%
Net Absorption
Under Construction
Deliveries
Asking Rent
7,600 SF
216,600 SF
0 SF
$30.81 FS
Rockville finally bucked the trend of consecutive quarters of negative

demand and registered positive net absorption of 7,600 square feet
(sf) during the second quarter of 2015. The overall vacancy rate fell 10
basis points from 17.1% from the first quarter of 2015 to 17.0% in the
second quarter. Home to the largest lease of the first quarter, Rockville
experienced lighter leasing activity with the exception of a 19,400 sf
lease at 9601 Blackwell and Shady Grove Orthopedics lease for 13,400
sf. These two leases accounted for nearly 60% of the 58,400 sf of
leasing activity across the submarket. The rest of the leasing activity
was dominated by smaller leases, the next largest being that of Realty
Capital Investments sublet for 8,700 sf at 1201 Seven Locks Road.
600
20%
500
16%
400
300
12%
200
8%
100
0
4%
-100
-200
05
06
07
08
09
Net Absorption
10
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%
MSF
12358 Parklawn Drive and 12435 Park Potomac remain under

construction and are expected to deliver in November 2015 and
January 2016, respectively. This will bring another 205,000 sf of office
space to the submarket, only 10% of which is preleased to Foulger Pratt
Companies. There will be one new delivery coming up at the beginning
of the third quarter at 275 N Washington Street, which consists of
23,600 sf. With 11,700 sf of office space still available on the second
floor and only a block away from the Rockville Metro, expect the
building to see some activity in the near future. These three deliveries
will likely boost demand and leasing activity back to quarterly averages.
Vacancy Rate
Square Feet, 000s
Market Indicators
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
0.4
0.3
1.2
1.2
1.3
Q4 11
Q4 12
Q4 13
0.1
Vacant
0.2
0.2
0.3
1.5
1.5
1.5
Q4 14
Q1 15
Q2 15
Asking Rent
$38
Outlook

Medical tenants will continue to drive demand for office

space in the Rockville submarket, as they have been
throughout the recovery.
The vacancy rate will remain stable as no major vacancies
are anticipated in 2015, except in spec development in the
submarket.
Full Service PSF
$36
$34
$32
$30
$28
$26
$24
$22
$20
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
www.dtz.com | 9
North Rockville
Vacancy
17.6%
Net Absorption
Under Construction
77,800 SF
0 SF
As was the case in the rest of Suburban Maryland, gross leasing activity
in North Rockville slowed during the second quarter of 2015 to a total
132,900 sfwell below the submarkets historical quarterly average
of 228,000 sf. North Rockville continued to follow the trend towards
smaller leases, with only two deals over 10,000 sf executed during
the quarter, on par with the previous quarter. On a positive note, the
submarket boasted the highest level of demand in Suburban Maryland,
registering 77,800 sf of absorption over the quarter. This is the second
quarter in a row with positive demand, a much needed development
following a very poor year in 2014. The largest deal of the quarter
in North Rockville was signed by TurningPoint Global Solutions. The
software services firm leased the entire fourth floor (22,800 sf) at
2273 Research Boulevard.
The submarkets overall vacancy rate declined by 0.7 percentage points
to end the second quarter at 17.6%, primarily due to the absorption of
relet space. The North Rockville submarket consists of 8.2 msf of Class
A product with a vacancy rate of 12.4%. Class A product continued to
perform well over the quarter, with 37,300 sf of high-quality product
absorbed. Asking rents in the submarket currently average $25.67
psf with Class A rents at $27.42 psf. No new or spec projects have
broken ground over the past year as developers postponed suburban
development in favor of core development in the District of Columbia.
Asking Rent
Deliveries
$25.67 FS
0 SF

800
20%
600
16%
400
12%
200
0
8%
-200
Vacancy Rate
Square Feet, 000s
Market Indicators
4%
-400
-600
05
06
07
08
09
Net Absorption
10
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%

3.0
2.5
MSF
2.0
0.4
0.4
1.6
1.5
1.6
Q4 11
Q4 12
Q4 13
1.5
1.0
0.5
0.0
0.5
0.4
0.5
2.1
2.1
2.0
Q4 14
Q1 15
Q2 15
0.8
Vacant
Asking Rent
$32
Outlook
North Rockville will continue to attract tenants from

within the I-270 Corridor as average asking rents remain
an economical alternative to those in North Bethesda and
Rockville.
With fewer large biotech and lab spaces available
throughout the 270 corridor, the market for such existing
space may tighten in the near future.
$30
Full Service PSF
$28
$26
$24
$22
$20
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
DTZ | 10
Gaithersburg/Germantown
18.5%
Net Absorption
Under Construction
(700) SF
80,000 SF
After a first quarter of modest growth, Gaithersburg/Germantown

stumbled during the second quarter of 2015 posting negative 700
sf of absorption. With leasing activity decreasing in the second
quarter, Gaithersburg/Germantowns midyear absorption total fell
to 15,100 sf. After returning less than 1,000 sf to the market during
the quarter, vacancy in the submarket remained unchanged from the
previous quarter at 18.5%. Demand has faltered over the last year in
the submarket, as the last four quarters have produced just 39,200 sf
of absorption. Gross leasing activity was noticeably down during the
second quarter as well. Typically, the submarket sources 113,000 sf
of activity during per quarter, but in the most recent quarter leasing
activity decreased by more than half at 51,900 sf. Smaller deals were
the primary of demand with only one deal eclipsing the 5,000 sf mark.
The largest lease in the submarket during the quarter was that of Icon
Clinical Research which signed for 13,500 sf at 820 West Diamond
Avenue in Gaithersburg.
Gaitherburg/Germantown is one of the few Suburban Maryland
submarkets where demand for Class B product exceeded that of Class
A. With tenants displaying of preference for top-quality space over the
past few quarters, it was surprising to see a negative total for Class A
absorption during the second quarter. Vacancy for Class A buildings
in the submarket also exceeds that of older legacy product. As of the
end of the second quarter, Class A vacancy was 6.4 percentage points
above commodity product at 23.0%. Average rents in the submarket
rose by $0.29 over the quarter. Class A Rents, however, fell by $0.07
while Class B rents rose by $0.04. This indicates that perhaps more
cost conscious tenants will locate in the submarket moving forward.
300
250
200
150
100
50
0
-50
-100
-150
-200
20%
16%
12%
8%
4%
05
06
07
08
Numerous properties in the Gaithersburg/Germantown

submarket offer large blocks of available space (greater
than 25,000 sf) allowing the submarket to accommodate
large tenant requirements.
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%
2.5
2.0
1.5
0.8
0.8
0.8
1.2
1.2
1.2
1.2
Q4 13
Q4 14
Q1 15
Q2 15
0.9
0.7
0.6
1.0
1.1
Q4 11
Q4 12
1.0
0.5
Asking Rent
As activity tends to move north up the I-270 Corridor,

tightening conditions in Bethesda may lead to movement
towards cheaper alternatives in Gaithersburg/
Germantown.
With less than ten spec suites currently listed on the
market for lease, look for owners with stagnant leasing
activity to convert existing inventory into spec suites to
capture demand for tenants with immediate requirements.
10
$29
$28
Full Service PSF
09
Net Absorption
Vacant
$23.56 FS
0 SF
0.0
Outlook
Asking Rent
Deliveries
Vacancy Rate
Vacancy
Square Feet, 000s
MSF
Market Indicators
$27
$26
$25
$24
$23
$22
$21
$20
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
www.dtz.com | 11
Silver Spring
11.8%
Net Absorption
Under Construction
37,800 SF
16,800 SF
Silver Spring registered the second highest levels of absorption in all

of Suburban Maryland: 36,800 sf. This marked the second straight
quarter with positive absorption. Positive demand consisted of
multiple leases fewer than 10,000 sf. Some buildings with notable
activity included 8115 Fenton Street, 8484 Georgia Avenue, and 1100
Wayne Avenue which accounted for 4,000 sf, 5,500 sf, and 10,400 sf
respectively. Due to a steady increase in absorption over the last two
quarters, the vacancy rate continued to drop, declining 0.7 percentage
points since year end 2014.
Despite all the positive metrics, total leasing activity was only 49,400
sf. This is the second lowest leasing volume experienced by the
submarket over the past 10 years, with only last quarter being lower at
44,700 sf. The majority of leases were for space in Class A buildings;
in fact, Class A space accounted for almost 80 percent of all positive
demand at 34,100 sf. Class B was the only class that saw more moveouts than move-ins, resulting in negative absorption of 6,200 sf.
After a number of years without any deliveries, one building is currently
under construction in Silver Spring: Lee & Associates 4009 Sandy
Spring Road. The building will deliver 16,800 sf of office space to the
area referred to as North Silver Spring as vacant. Rents throughout the
submarket have not grown significantly over the past four quarters,
only up 1.7% year-over-year. Previously reported, Petrie Ross Ventures
had plans for a 210,600 sf project at 8645 Colesville Road. Upon
further review, the developer has not begun construction and has
currently put a hold on the project. With limited development in the
pipeline and only one small building currently under construction,
expect the market to remain flat over the near term.
Asking Rent
Deliveries
$26.26 FS
0 SF

200
16%
150
100
12%
50
0
8%
-50
-100
4%
Vacancy Rate
Vacancy
Square Feet, 000s
-150
-200
05
06
07
08
09
Net Absorption
10
11
12
14 YTD
15
Vacancy Rate
Deliveries
13
0%

1.6
1.4
1.2
MSF
Market Indicators
0.3
0.3
0.4
1.0
0.9
Q4 11
Q4 12
1.0
0.3
0.3
0.3
0.4
0.8
0.6
0.4
1.1
1.0
1.0
0.9
0.9
Q4 13
Q2 14
Q3 14
Q1 15
Q2 15
0.2
0.0
Vacant
Asking Rent
$34
With a Class B office vacancy rate of 18.1% at the end of

2014, expect rents in this segment to further decline.
Tenant-favorable conditions are likely to persist over the
short term.
$32
Full Service PSF
Outlook
$30
$28
$26
$24
$22
$20
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
DTZ | 12
Prince Georges County

Vacancy
Net Absorption
Under Construction
25.2%
(176,700) SF
110,000 SF
Prince Georges County continually has the highest vacancy rate

among major Suburban Maryland markets. The vacancy rate has
increased a full percentage point over the last quarter to 25.2%. This is
consistent with recent trends, as the vacancy rate has remained in the
mid-twenties for the past six quarters. Dont expect the vacancy rate to
shoot up much higher as the spread between availability and vacancy
is only 3% and among the lowest throughout suburban Maryland. The
submarket continued to show poor leasing fundamentals with negative
demand of 176,700 sf bringing the midyear total to negative 181,195 sf.
This was the fourth consecutive quarter in which the submarket has
experienced negative demand.
With the ongoing poor leasing conditions, the development pipeline
looks bleak. Only one building remains under construction and only
a few others have been proposed for development. The one building
that remains under construction is at 7800 Harkins Road. Berman
Enterprises is building out 110,000 sf of office space for the Maryland
Department of Housing and Community Development.
Asking Rent
Deliveries
$21.22 FS
0 SF

400
300
200
100
0
-100
-200
-300
-400
-500
-600
28%
24%
20%
16%
12%
8%
Vacancy Rate
Prince Georges County (PGC) was home to two of the largest lease
transactions in all of Suburban Maryland over the second quarter of
2015. The largest was that of SI Organization, an engineering services
company, which signed a new deal for 60,500 sf. Although a large
deal, this lease is only for half of the square footage that the company
previously held. Another major transaction was the GSA/Probation
and Paroles signing for 13,300 sf at 7855 Walker Drive. This was
not only one of the few transactions over 10,000 sf across suburban
Maryland but was also the second largest GSA lease in the DC Metro
throughout the second quarter. A couple of buildings saw a flurry of
medium-sized deals: 7,400 sf was leased at 7500 Greenway Center
Drive and 7,200 sf at 7400 Executive Place.
Square Feet, 000s
4%
05
06
07
08
09
Net Absorption
10
11
Deliveries
12
13
14 YTD
15
Vacancy Rate
0%

6.0
5.0
4.0
MSF
Market Indicators
0.9
0.2
0.2
3.8
3.9
3.8
Q4 11
Q4 12
Q4 13
0.7
0.8
0.5
4.3
4.2
4.4
Q4 14
Q1 15
Q2 15
3.0
2.0
1.0
0.0
Vacant
Asking Rent
Outlook
Anticipating a late 2016 opening, the MGM National

Harbor Casino will bring significant excitement and
activity to the submarket. A top executive of MGM Resorts
International refers to the new project as a destination
and one that will attract not only local businesses but
business from around the country.
Asking rents will remain flat to falling for the next 12
months as vacancy registered 7.9 percentage points above
the submarkets historical norm. As the search for FBIs
2.1-msf headquarters location narrows to a short list of
sites, prospects for PGC look pretty good.
$25
$24
Full Service PSF
$23
$22
$21
$20
$19
$18
2009
2010
2011
Class A
2012
2013
2014
2015
Class B
www.dtz.com | 13
Appendix
Table Summaries
Metro Washington Office
Market Summary
13
Employment Data
13
Office Availability, Vacancy,
and Net Absorption
14
Metro Washington Office Market Summary: Second Quarter 2015p

Total
Inventory
Total Space
Vacant
Vacancy
Rate
Q2 2015
Absorption
YTD
Absorption
Washington, DC
122,850,343
13,562,737
11.0%
275,133
250,129
Northern Virginia
162,377,414
30,463,789
18.8%
370,078
172,605
Suburban Maryland
72,887,967
13,466,110
18.5%
(79,631)
36,624
Regional Totals
358,115,724
57,492,636
16.1%
665,580
459,358
Trailing 12-Month Data

15
Historical Year-End Data
16
Metro Washington Current Employment Data

Non Farm
Employment
(Jan-June 2014)
Non Farm
Employment
(Jan-June 2015p)
Jobs Added/
Lost*
Percent Change
Washington, DC
751,100
761,950
10,850
1.4%
Northern Virginia
1,376,800
1,397,000
20,200
1.5%
956,550
974,250
17,700
1.9%
3,101,550
3,155,450
53,900
1.7%
Market Statistics by Class

17-18
Survey of New Office Space by
Submarket
19-22
Methodology & Definitions
23
Suburban Maryland
Regional Totals
SOURCE: U.S. Bureau of Labor Statistics (Not seasonally adjusted)

* Average per year to date
p - preliminary
DTZ | 14
9,880,127
8,809,516
11,366,007
6,528,643
7,654,652
55,472,707
10,165,584
4,882,619
2,367,057
17,415,260
72,887,967
North
Bethesda
Rockville
North
Rockville
Gaithersburg/
Germantown
Silver Spring
Montgomery
County
Northern
Central
Southern
Prince
George's
County
Suburban
Maryland
p - preliminary
11,233,762
Bethesda/
Chevy Chase
Total
Inventory
859,563
71,220
71,220
788,343
28,116
131,623
244,804
145,804
237,996
New Space
Vacant
11,863,360
4,210,670
293,587
1,285,378
2,631,705
7,652,690
838,470
1,121,113
1,669,452
1,124,799
1,964,059
934,797
Relet Space
Vacant
743,187
109,489
15,204
33,053
61,232
633,698
53,613
56,216
195,467
126,348
46,122
155,932
Sublet
Space
Vacant
13,466,110
4,391,379
308,791
1,389,651
2,692,937
9,074,731
892,083
1,205,445
1,996,542
1,495,951
2,155,985
1,328,725
Total Space
Vacant
Office Availability, Vacancy, and Net Absorption, Second Quarter 2015p
18.5%
25.2%
13.0%
28.5%
26.5%
16.4%
11.7%
18.5%
17.6%
17.0%
21.8%
11.8%
Vacancy
Rate (%)
69,897
69,897
2,870
61,522
5,505
New Space
Absorption
(141,187)
(173,416)
11,945
(58,190)
(127,171)
32,229
40,305
(3,200)
56,984
13,891
(42,172)
(33,579)
Relet Space
Absorption
(8,341)
(3,307)
(6,788)
3,481
(5,034)
(2,503)
2,474
17,948
(6,333)
(7,982)
(8,638)
Sublet
Space
Absorption
(79,631)
(176,723)
11,945
(64,978)
(123,690)
97,092
37,802
(726)
77,802
7,558
11,368
(36,712)
Total Net
Absorption
Appendix
www.dtz.com | 15
9,902,127
8,824,111
11,366,007
6,528,643
7,751,296
55,379,594
10,165,584
5,064,619
2,367,057
17,597,260
72,976,854
North Bethesda
Rockville
North Rockville
Gaithersburg/
Germantown
Silver Spring
Montgomery
County
Northern
Central
Southern
Prince George's
County
Suburban
Maryland
p - preliminary
11,007,410
Bethesda/
Chevy Chase
3rd Qtr
2014
Trailing 12-Month Data
73,091,967
17,597,260
2,367,057
5,064,619
10,165,584
55,494,707
7,654,652
6,528,643
11,366,007
8,809,516
9,902,127
11,233,762
4th Qtr
2014
72,887,967
17,415,260
2,367,057
4,882,619
10,165,584
55,472,707
7,654,652
6,528,643
11,366,007
8,809,516
9,880,127
11,233,762
1st Qtr
2015
Total Inventory
72,887,967
17,415,260
2,367,057
4,882,619
10,165,584
55,472,707
7,654,652
6,528,643
11,366,007
8,809,516
9,880,127
11,233,762
2nd Qtr
2015
16.0%
21.5%
14.7%
19.7%
24.0%
14.3%
13.9%
18.2%
14.2%
14.9%
16.8%
9.4%
3rd Qtr
2014p
17.4%
23.7%
14.3%
25.9%
24.7%
15.4%
13.1%
19.2%
16.9%
14.8%
19.7%
9.9%
4th Qtr
2013
18.4%
24.2%
13.5%
27.1%
25.3%
16.5%
12.1%
18.5%
18.3%
17.1%
21.9%
11.5%
1st Qtr
2015
Vacancy Rate (%)
18.5%
25.2%
13.0%
28.5%
26.5%
16.4%
11.7%
18.5%
17.6%
17.0%
21.8%
11.8%
2nd Qtr
2015
(299,688)
(19,700)
9,600
(8,109)
(21,191)
(279,988)
(42,299)
17,191
(61,748)
(141,520)
(26,674)
(24,938)
3rd Qtr
2014
(212,615)
(102,652)
(32,880)
(40,307)
(29,465)
(109,963)
(36,460)
6,910
(38,983)
(9,353)
(50,056)
17,979
4th Qtr
2014p
116,255
(4,472)
6,731
(2,961)
(8,242)
120,727
22,697
15,802
1,568
(19,572)
80,506
19,726
1st Qtr
2015
Total Absorption
(79,631)
(176,723)
11,945
(64,978)
(123,690)
97,092
37,802
(726)
77,802
7,558
11,368
(36,712)
2nd Qtr
2015
Appendix
DTZ | 16
9,921,687
8,446,363
10,638,540
6,389,608
7,835,746
54,252,312
9,908,822
5,192,785
2,624,259
17,725,866
71,978,178
North Bethesda
Rockville
North Rockville
Gaithersburg/
Germantown
Silver Spring
Montgomery
County
Northern
Central
Southern
Prince
George's
County
Suburban
Maryland
p - preliminary
11,020,368
Bethesda/
Chevy Chase
2012
Historical Year-End Data
72,684,230
17,794,907
2,424,538
5,192,785
10,177,584
54,889,323
7,835,746
6,551,893
11,264,826
8,394,363
9,822,127
11,020,368
2013
73,091,967
17,597,260
2,367,057
5,064,619
10,165,584
55,494,707
7,654,652
6,528,643
11,366,007
8,809,516
9,902,127
11,233,762
2014
Total Inventory
72,887,967
17,415,260
2,367,057
4,882,619
10,165,584
55,472,707
7,654,652
6,528,643
11,366,007
8,809,516
9,880,127
11,233,762
2015p
15.5%
21.9%
22.7%
20.6%
22.5%
13.4%
11.8%
17.2%
14.0%
13.9%
14.5%
10.6%
2012
16.0%
21.5%
14.7%
19.7%
24.0%
14.3%
13.9%
18.2%
14.2%
14.9%
16.8%
9.4%
2013
18.4%
24.2%
13.8%
26.9%
25.2%
16.7%
12.4%
18.7%
18.1%
16.8%
22.8%
11.7%
2014
Vacancy Rate (%)
18.5%
25.2%
13.0%
28.5%
26.5%
16.4%
11.7%
18.5%
17.6%
17.0%
21.8%
11.8%
2015p
364,410
(83,336)
(1,636)
20,424
(102,124)
447,746
23,288
(72,637)
77,731
(3,978)
287,174
136,168
2012
219,180
(39,290)
64,402
44,192
(147,884)
258,470
(163,455)
45,714
436,963
69,302
(299,000)
168,946
2013
116,255
(4,472)
6,731
(2,961)
(8,242)
120,727
22,697
15,802
1,568
(19,572)
80,506
19,726
2014
Total Absorption
(79,631)
(176,723)
18,676
(67,939)
(131,932)
217,819
60,499
15,076
79,370
(12,014)
91,874
(16,986)
2015p
Appendix
www.dtz.com | 17
Market Statistics
Suburban Maryland 2nd Quarter 2015 Market Statistics
Buildings
Total
Inventory
(SF)
New
Vacancy
(%)
Relet
Vacancy
(%)
Sublet
Vacancy
(%)
Total
Vacancy*
(%)
Total
Availability
(%)
Net
Absorption
Current QTR
(SF)
Under
Construction
(SF)
Average
Asking
Rent
(FS)
Class
A
31
6,259,195
3.8%
7.3%
1.1%
12.1%
14.8%
(53,566)
$39.59
52
4,476,641
0.0%
10.2%
1.9%
12.2%
17.6%
17,887
$33.90
19
497,926
0.0%
4.8%
0.1%
4.9%
6.3%
(1,033)
$29.37
TOTAL
102
11,233,762
2.1%
8.3%
1.4%
11.8%
15.6%
(36,712)
$36.25
North Bethesda
Class
A
33
7,249,555
2.0%
21.8%
0.3%
24.1%
24.7%
10,738
$30.64
30
2,251,558
0.0%
15.6%
1.0%
16.5%
18.0%
(352)
$26.72
12
379,014
0.0%
9.0%
0.0%
9.0%
20.4%
992
$25.11
TOTAL
75
9,880,127
1.5%
19.9%
0.5%
21.8%
22.7%
11,378
$29.67
30
4,335,076
5.6%
15.8%
0.5%
21.9%
26.1%
27,650
216,613
$33.05
45
4,052,592
0.0%
9.8%
2.6%
12.5%
15.2%
(19,516)
$26.76
18
421,848
0.0%
9.8%
0.0%
9.8%
9.9%
(576)
$23.62
TOTAL
93
8,809,516
2.8%
12.8%
1.4%
17.0%
20.5%
7,558
216,613
$30.81
Rockville
Class
North Rockville
Class
A
63
8,150,921
1.6%
12.4%
2.0%
16.1%
19.8%
37,280
$27.42
43
2,876,160
0.0%
20.0%
1.0%
21.0%
26.5%
40,522
$23.27
338,926
0.0%
23.7%
0.0%
23.7%
30.2%
$19.55
111
11,366,007
1.2%
14.7%
1.7%
17.6%
21.9%
77,802
$25.67
TOTAL
* Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space.
DTZ | 18
Market Statistics
Suburban Maryland 2nd Quarter 2015 Market Statistics
Total
Inventory
(SF)
Buildings
New
Vacancy
(%)
Relet
Vacancy
(%)
Sublet
Vacancy
(%)
Total
Vacancy*
(%)
Total
Availability
(%)
Net
Absorption
Current QTR
(SF)
Under
Construction
(SF)
Average
Asking
Rent
(FS)
Class
A
27
2,846,347
1.0%
20.4%
1.6%
23.0%
23.4%
(14,966)
$25.57
59
3,173,699
0.0%
16.3%
0.3%
16.6%
29.4%
13,295
80,000
$21.75
11
508,597
0.0%
4.5%
0.0%
4.5%
37.2%
945
$21.37
TOTAL
97
6,528,643
0.4%
17.2%
0.9%
18.5%
24.4%
(726)
80,000
$23.56
25
4,589,454
0.0%
7.7%
0.6%
8.3%
14.9%
34,119
227,408
$28.72
48
2,367,455
0.1%
17.3%
1.1%
18.5%
20.0%
(6,235)
$23.83
21
697,743
1.5%
11.0%
0.2%
12.7%
20.0%
9,918
$22.23
TOTAL
94
7,654,652
0.1%
11.0%
0.7%
11.8%
17.0%
37,802
227,408
$26.26
Silver Spring
Class
Prince Georges County

Class
A
63
8,509,609
0.8%
26.2%
0.9%
28.0%
28.3%
(125,788)
110,000
$22.40
151
7,285,250
0.0%
24.7%
0.4%
25.1%
29.3%
(57,949)
$20.73
55
1,620,401
0.0%
11.1%
0.0%
11.1%
15.4%
7,014
$17.88
TOTAL
269
17,415,260
0.4%
24.2%
0.6%
25.2%
27.1%
(176,723)
110,000
$21.22
Suburban Maryland
Class
A
272
41,940,157
2.0%
16.4%
1.0%
19.5%
21.3%
(84,533)
554,021
$28.49
428
26,483,355
0.0%
17.0%
1.2%
18.2%
23.5%
(12,348)
80,000
$23.84
141
4,464,455
0.0%
10.3%
0.0%
10.3%
18.0%
17,260
$20.47
TOTAL
841
72,887,967
1.2%
16.3%
1.0%
18.5%
22.0%
(79,621)
634,021
$26.12
* Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space.
www.dtz.com | 19
DTZ | 20
JBG Rosenfeld Retail Properties
Greencourt Property Group
The Foulger-Pratt Companies
275 N Washington Street
12358 Parklawn Drive
12435 Park Potomac Avenue

Park Potomac - Building D
Gittleson Zuppas Commercial

Realty, Inc. / NexCore Healthcare Withheld
Capital Corp
19851 Observation Drive

Holy Cross Hospital Germantown
Campus MOB
= Full Service NN = Plus Electric & Char

= Plus Electric NT = Plus Taxes
FS
U/R = Under Renovation
NNN = Net of all Operating Expenses and Taxes
Operating Expense and Real Estate Tax Base
Status
U/C = Under Construction
Total
OWNER/DEVELOPER
RENTAL RATE
Negotiable
$35.00-$38.00 FS
$36.00 FS
RENTAL RATE
BUILDING ADDRESS
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Rockville
U/C
STATUS
U/C
U/C
U/C
STATUS
3Q15
DELIVERY
DATE
1Q16
4Q15
3Q15
DELIVERY
DATE
Survey of Office Space Under Construction/Under Renovation
80,000
80,000
RENTABLE
BUILDING AREA
216,613
104,930
100,000
11,683
RENTABLE
BUILDING AREA
49,306
49,306
AVAILABLE
SPACE
195,863
84,180
100,000
11,683
AVAILABLE
SPACE
38%
38%
PERCENT
PRELEASED
10%
20%
0%
0%
PERCENT
PRELEASED
Potomac Valley Orthopedic
MAJOR TENANTS
N/A
N/A
MAJOR TENANTS
www.dtz.com | 21
Lee & Associates
4009 Sandy Spring Road

Starpoint Plaza
Berman Enterprises
7800 Harkins Road

Maryland Department of Housing
and Community Development

FS
U/R = Under Renovation
Status
U/C = Under Construction
423,421
TOTAL CURRENTLY UNDER

CONSTRUCTION/RENOVATION
AVAILABLE
SPACE
RENTABLE
BUILDING AREA
260,877
84,180
176,697
AVAILABLE
SPACE
15,708
15,708
AVAILABLE
SPACE
110,000
110,000
RENTABLE
BUILDING AREA
16,808
16,808
RENTABLE
BUILDING AREA
104,930
3Q15
DELIVERY
DATE
3Q15
DELIVERY
DATE
318,491
U/C
STATUS
U/C
STATUS
2016 DELIVERIES
N/A
RENTAL RATE
Negotiable
RENTAL RATE
2015 DELIVERIES
Suburban, MD Summary
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Central Prince George's County
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Silver Spring
Survey of Office Space Under Construction/Under Renovation
38%
20%
45%
PERCENT
PRELEASED
100%
100%
PERCENT
PRELEASED
7%
7%
PERCENT
PRELEASED
Maryland Department of Housing and

Community Development
MAJOR TENANTS
N/A
MAJOR TENANTS
DTZ | 22
Carr Properties
Federal Realty Investment Trust
The JBG Companies
Lerner Enterprises
4500 East West Highway
11810 Grand Park Avenue

Pike & Rose Building 11
5601 Fishers Lane
14995 Shady Grove Road
The JBG Companies
Shady Grove Medical Building
9609 Medical Center Drive

National Cancer Institute
9905 Medical Center Drive

Aquilino Cancer Center
N/A
LCOR / USAA Real Estate
University of Maryland Medical

System/Corporate Office Properties Delivered 3Q12
Trust
11601 Landsdown Street

3 White Flint North - NRC
Headquarters
5830 University Research Court

NOAA Building
FS
Total
N/A
Delivered 4Q12
B.F. Saul
Negotiable
162,285
Gaithersburg/
Germantown
Northern
Prince
George's
North
Bethesda
921,970
269,000
362,000
185,470
105,500
Bethesda/
Chevy Chase
Bethesda/
Chevy Chase
RENTABLE
BUILDING
AREA
SUBMARKET
963,161
41,156
575,000
184,720
RENTABLE
BUILDING
AREA
898,531
101,181
490,998
North Rockville
North Rockville
Rockville
SUBMARKET
North Rockville
Rockville
80,000
226,352
Bethesda/
Chevy Chase
North
Bethesda
RENTABLE
BUILDING
AREA
SUBMARKET
34%
93%
0%
50%
75%
8%
17%
0%
0%
25%
40,165
35,238
4,927
4%
0%
0%
19%
5%
VACANCY RATE
NEW SPACE
(AS OF CURRENT
AVAILABLE
QUARTER)*
74,281
28,116
46,165
VACANCY RATE
NEW SPACE
(AS OF CURRENT
AVAILABLE
QUARTER)*
304,161
94,518
39,822
169,821
VACANCY RATE
NEW SPACE
(AS OF CURRENT
AVAILABLE
QUARTER)*
*Vacancy rate for new space- does not include relet or sublet space available
Delivered 1Q12
Withheld
7700 Old Georgetown Road

Chevy Chase Garden Plaza
Delivered 4Q12
Akridge
RENTAL RATE
$28.00 FS
N/A
N/A
$44.50 FS
RENTAL RATE
Withheld
N/A
$45.00 FS
Withheld
RENTAL RATE
OWNER/DEVELOPER
STATUS
Delivered 1Q13
Delivered 3Q13
Delivered 1Q13
Delivered 2Q13
STATUS
Delivered 2Q14
Delivered 2Q14
Delivered 3Q14
Delivered 4Q14
STATUS
BUILDING ADDRESS
2012 Deliveries
Total
MEPT/New Tower Trust Company
121 Rockville Pike

Rockville Metro Plaza II
12409 Milestone Center Court

Milestone Building 5
OWNER/DEVELOPER
BUILDING ADDRESS
2013 Deliveries
Total
OWNER/DEVELOPER
BUILDING ADDRESS
2014 Deliveries
Suburban Maryland Survey of New Office Space
71%
100%
100%
15%
0%
PERCENT LEASED
UPON DELIVERY
92%
83%
100%
100%
75%
PERCENT LEASED
UPON DELIVERY
66%
0%
100%
50%
12%
PERCENT LEASED
UPON DELIVERY
Methodology & Definitions

Methodology
Explanation of Terms
Market statistics are calculated from a

base building inventory made up of office
properties deemed to be competitive in
the typical Washington, DC office market.
Single-tenant buildings and privately-owned
buildings in which the federal government
leases space are included. Generally, owneroccupied and federally-owned buildings
are not included. Older buildings unfit for
occupancy or ones that require substantial
renovation before tenancy are generally
not included in the competitive inventory.
Vacant space is defined as space that is
physically vacant and available immediately.
Sublet space still occupied by the tenant is
not counted as vacant space.
Total Inventory: The total amount of office

space (in buildings greater than 10,000
square feet) that can be rented by a Fourth
party.
New Space Vacant: First generation, neveroccupied office space in newly constructed
or substantially renovated buildings, being
actively marketed by a landlord.
Relet Space Vacant: Second-generation,
unoccupied office space being actively
marketed by a landlord. (Space that is
marketed but largely occupied is not counted
as vacant space.)
Sublet Space Vacant: Second-generation,
unoccupied space being actively marketed
by a tenant. (Sublet space that is marketed
but still occupied is not counted as vacant
space.)
Total Space Vacant: The sum of new, relet,
and sublet space that is unoccupied and
being actively marketed.
Vacancy Rate: The amount of unoccupied
space (new, relet, and sublet) expressed as
a percentage of total inventory. (Total Space
Vacant divided by Total Inventory.)
Total Space Available: The total amount

of space, both vacant and occupied, being
actively marketed for lease by a tenant
or landlord. (This includes space that is
currently occupied but marketed for future
availability.)
Availability Rate: The total amount of
space being actively marketed for lease
(both vacant and occupied) expressed as a
percentage of total inventory. (Total Space
Available divided by Total Inventory.)
Absorption: The net change in occupied
space between two points in time. (Total
occupied space in the previous quarter
minus total occupied space in the current
quarter, quoted on a net, not gross, basis.)
New Space Absorption: The net change in
occupied new space between two quarters.
Relet/Sublet Absorption: The net change
in occupied relet and sublet space between
two quarters.
Total Absorption: The The net change in
total occupied (new, relet, and sublet) space
between two quarters.
Disclaimer
This report and other research materials may be found on our website at www.dtz.com. This is a research document of DTZ in Washington, DC. Questions related to
information herein should be directed to the Research Department at 202-463-2100. Information contained herein has been obtained from sources deemed reliable and no
representation is made as to the accuracy thereof.
About DTZ
DTZ is a global leader in commercial real estate services providing occupiers, tenants and investors around the world with a full spectrum of property solutions. The companys
core capabilities include agency leasing, tenant representation, corporate and global occupier services, property management, facilities management, facility services, capital
markets, investment and asset management, valuation, research, consulting, and project and development management. DTZ provides property management for 1.9 billion
square feet, or 171 million square meters, and facilities management for 1.3 billion square feet, or 124 million square meters. The company completed $63 billion in transaction
volume globally in 2014 on behalf of institutional, corporate, government and private clients. Headquartered in Chicago, DTZ has more than 28,000 employees who operate
across more than 260 offices in 50 countries and represent the companys culture of excellence, client advocacy, integrity and collaboration.
DTZ announced an agreement to merge with Cushman & Wakefield in a May 11 press release. The new company, which will operate under the Cushman & Wakefield brand,
will have revenues over $5.5 billion, over 43,000 employees and will manage more than 4 billion square feet globally on behalf of institutional, corporate and private clients.
The agreement is subject to customary closing conditions and is expected to close before the end of 2015. For further information, visit: www.dtz.com or follow us on Twitter
@DTZ.
www.dtz.com | 23
Visit www.dtz.com for more information on the full range of DTZ

commercial real estate services or contact:
Nathan Edwards
Vice President
2101 L Street, NW, Suite 700
Washington, DC 20037
+1 202 463 2100
Northern Virginia
CJ Hardy
Research Analyst
+1 202 463 2100
Washington, DC & Suburban Maryland
Joseph Wood
Research Analyst
+1 202 463 2100
About DTZ
DTZ is a global leader in commercial real estate services providing occupiers, tenants and investors
around the world with a full spectrum of property solutions. The companys core capabilities include
agency leasing, tenant representation, corporate and global occupier services, property management,
facilities management, facility services, capital markets, investment and asset management, valuation,
research, consulting, and project and development management. DTZ provides property management
for 1.9 billion square feet, or 171 million square meters, and facilities management for 1.3 billion square
feet, or 124 million square meters. The company completed $63 billion in transaction volume globally
in 2014 on behalf of institutional, corporate, government and private clients. Headquartered in Chicago,
DTZ has more than 28,000 employees who operate across more than 260 offices in 50 countries and
represent the companys culture of excellence, client advocacy, integrity and collaboration.
DTZ announced an agreement to merge with Cushman & Wakefield in a May 11 press release. The
new company, which will operate under the Cushman & Wakefield brand, will have revenues over $5.5
billion, over 43,000 employees and will manage more than 4 billion square feet globally on behalf of
institutional, corporate and private clients. The agreement is subject to customary closing conditions
and is expected to close before the end of 2015. For further information, visit: www.dtz.com or follow us
on Twitter @DTZ.
Publication date: 7.30.15
Copyright 2015 DTZ. All rights reserved.
Core Services
Capital Markets
- Debt Placement
- Investment Sales
- Note Sales
- Structured Finance
Corporate Services
- Facilities Management
- Portfolio Administration
- Project Management
- Strategic Consulting
- Transaction Management
Project Leasing
Project and Development Services
Property Management
Tenant Representation
Practices and Specialties
Auction Services
Distressed Assets
Financial Advisory
Food and Beverage
Golf and Resort Properties
Government Contracting
Government Services
Healthcare
Higher Education
Hospitality
Law Firm
Life Sciences
Location Advisory and Incentives
Mission Critical
Net Lease
Not-for-profit
Private Client
Supply Chain
Sustainability Services
Real Estate Types
Industrial
Land
Multi-family
Office
Retail

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Market Report

Suburban Maryland | 2nd Quarter 2015

DC Metropolitan Area Overview.....................................................................................................3

Washington, DC Metropolitan Area

regions in job growth in 2014. Compare that to June 2015: over-the-year

Average Asking Rent (FS)

Net Absorption/Asking Rent

Major regional demand drivers are at an inflection point. After being a

federal contracting community that is an integral part of the suburban

third of the District of Columbias downtown core market footprint have

bottom in 2014 and is now poised for positive, if modest, conditions

Asking Rent, $ PSF

NET ABSORPTION - DELIVERIES - VACANCY

importantly, the decrease in regional vacancy signals a reversal from

15 straight quarters of flat or rising vacancy. The downtick in vacancy

coincides with overall positive absorption of 670,000 sf for the second

a backdrop, investment in the region continues unabated. As of midyear

2015, $4 billion in transaction volume had occurred in the office sector

future of the DC Region.

Washington, DC Metropolitan Area

Net Absorption, MSF

with a 4.6% unemployment rate, Montgomery County, in particular, has shown

strong employment numbers. The county had a 4.0% unemployment rate as

30 basis points year-over-year. Employment growth in Suburban Maryland

Average Asking Rent

prior. While the employment growth was predominantly in non-office-using

years of budget cuts, the spending bill (so-called CR-Omnibus budget)

Square Feet, 000s

major sectors driven by federal government spending. After four consecutive

Vacated (Q4 13 to Q1 15)

Pending Vacancies (Remaining 2015)

After registering positive demand at the beginning of 2015, the Suburban

Historical Average = 16.2%

Large Blocks of Contiguous Space

Bethesda/ Chevy Chase

space efficiency across industry sectors.

Maryland Office Submarkets

7700 Wisconsin Avenue

14400 Sweitzer Lane

7700 Wisconsin Avenue

Berkeley Point Capital

2273 Research Boulevard

Turning Point Global Solutions

820 W Diamond Aveneu

Icon Clinical Research

Shady Grove Orthopedics

7845 Walker Drive

GSA Probation and Parole

4520 East-West Highway

Key Sales Transactions 2Q 15

7315 Wisconsin Avenue

MRP JV Rockpoint / JP Morgan

Bethesda / Chevy Chase

4520 East-West Highway

Intelligent Decisions / EBA Engineering

Bethesda / Chevy Chase

9600 Blackwell Road

LNR Partners / True North

6710 Oxon Hill Road

PPM America / Rickman Development

Suburban Maryland Office Market

Suburban Maryland Office Market

Inventory by Class and Vacancy by Submarket, Second Quarter 2015