WASHINGTON, DC

Multi-Family Snapshot
Mid-Year 2016

Market Tracker
*Arrows = Current Qtr Trend

Vacancy

Net Absorption

Completions

Asking Rent

4.6%

5,247 Units

1,257 Units

$1,708

Washington DC Metropolitan market keeps trucking along at mid-year 2016

The Washington, DC Metropolitan area continued to experience strong multi-family
market fundamentals throughout the first half of 2016. Strong job creation coupled
with record population growth has led to an increase in demand for multi-family
product throughout the region. Net absorption at mid-year totaled 4,308 units within
the region which is broken into the three jurisdictions of the District of Columbia (1,479
units), Northern Virginia (1,025 units), and Suburban Maryland (1,804 units). With
added demand throughout the region, vacancy continued to decline registering 4.6%,
0.1 percentage points lower than one year ago.

DC METRO MULTI-FAMILY

Economic Indicators
2Q 2016

2Q 2015

3.233 M

3.164 M

Employment
Unemployment Rate

3.80%

4.50%

6.145 M

6.098 M

MF Permits Issued

3,346

3,006

MF Starts

2,723

2,104

$660,481

$671,635

Population

Average Home Sale Price

Average Days On Market

30

29

Average Rate (30 Year FRM)

3.57%

3.98%

10 Year Treasury Yield

1.49%

2.35%

Source: BLS, U.S. Census Bureau, Moodys Analytics, MRIS,

Freddie Mac, U.S. Department of the Treasury

16,000

7%

14,000

6%

12,000

5%

10,000

4%

8,000

3%

6,000

2%

4,000

1%

2,000
0

Vacancy Rate

Units (Thousands)

Absorption, Completions & Vacancy

2008

2009

2010

2011

New Deliveries

2012

2013

Net Absorption

2014 1Q 2015

0%

Vacancy Rate

Source: Cushman & Wakefield Research,

CoStar

$1,900
$1,800

Per Unit

$1,700
$1,600
$1,500
$1,400
$1,300
2008

2009

2010
DC

Source:
CoStar

Cushman

&

2011

2012

NoVA

Wakefield

2013

2014

Suburban MD

Research,

Concessions in the form of free rent continue to be a large deciding factor for many
renters and growth in asking rents continue to outpace growth in effective rents across
the metro. Overall asking rents grew by nearly 4.0% while effective rates only grew by
2.85% year-over-year. The spread between asking and effective rates grows even larger
in the top competitive submarkets of Tysons Corner, DuPont Circle/Kalorama/Adams
Morgan, and Bethesda (4.1%, 3.3%, and 2.7%, respectively). Tysons Corners and
Bethesdas disconnects are in large part due to abnormally high vacancy rates within
each submarket. Tysons Corner, at 13.9% vacant, and Bethesda, at 10% vacant, have
experienced increased competition between top class properties for the same renters.
As the development pipeline becomes more restrained over the next year, rent growth
is expected to experience an immediate impact and is projected to rebound as early as
late 2017 and into early 2018, sooner than originally anticipated.
Outlook

Asking Rents

$1,200

While new supply over the course of the last two years has far outpaced historical
norms, demand has also reached record levels. In 2014 and 2015, the overall market
delivered over 26,100 units. Tightening among lenders and high construction costs will
put a damper on construction moving forward. Over the next four quarters, anticipated
deliveries will top 14,000 units and 2017 will see a return to the historic average with
9,000 units coming online - many of which are in the urban core of the District of
Columbia and the new metro-proximate locations in Northern Virginia. The new product
that has delivered in the District has driven the vacancy rate down in the urban core as
experienced by the 0.6 percentage point drop year-over-year. The Northern Virginia
influx has been delayed compared to Downtown. Northern Virginia has experienced a
slight uptick in vacancy of 0.4 percentage points over the last two years as many of the
recent major developments have experienced slower lease up.

Q1 2015

With the development pipeline slowing in the coming the spread between asking and
effective rates appears to have hit its max in 2015. The compression between asking
and effective rent in the DC Metro has led to effective rent growth of 2.85% year-overyear as of June 2016. While there may be some short term impact on rental rates due
to the final wave of deliveries into 2017, strong effective rent growth should continue to
grow stronger in the near future. Many developers are working to get ahead of the
curve and beat the Metros Silver Line delivery date of 2019. The Silver Line, and its
expansion past Reston-Wiehle East, has brought increased accessibility to the Northern
Virginia suburbs and the new stations are expected to drive future demand as metroproximate locations continue to outperform the rest of the market. Metro-proximate
locations will continue to outperform the remainder of the submarkets. As millennials
want to move towards amenities and are leaning towards an urbanized lifestyle, these
locations will become increasingly more desirable.
cushmanwakefield.com | 1

Cushman & Wakefield Multi-Family Market Snapshot

DC Metro Second Quarter 2016
SUBMARKET

QUARTERLY NET
ABSORPTION

INVENTORY*

VACANCY RATE

Anacostia/ Southeast

21,784

3.3%

32

Brightwood/ Fort Totten/ Lower Northeast

18,912

4.9%

421

YTD NET

AVERAGE

AVERAGE

ABSORPTION

ASKING RENT

EFFECTIVE RENT

39

$1,102

$1,090

190

462

$1,480

$1,444

249

1,898

COMPLETIONS

UNDER
CONSTRUCTION

Capitol Hill/ H Street/ NoMa

9,965

5.8%

69

72

$1,986

$1,967

2,757

Columbia Heights/ Logan Circle/ Shaw

26,303

3.8%

272

205

$1,999

$1,953

95

922

Connecticut Ave/ Georgetown/ Wisconsin

Ave

22,890

6.5%

324

267

$2,096

$2,054

586

225

Downtown/ Penn Quarter/ Chinatown

6,299

2.6%

34

12

$2,418

$2,392

Dupont Circle/ Kalorama/ Adams Morgan

482

10,927

2.2%

38

22

$1,992

$1,891

Foggy Bottom/ GWU West End

9,049

2.3%

22

50

$2,459

$2,448

285

Southwest- Navy Yard

1,838

7.9%

256

350

$1,993

$1,942

756

3,749

DISTRICT OF COLUMBIA TOTALS

127,967

4.3%

1,468

1,479

$1,838

$1,801

1,686

10,508

Crystal City/ Pentagon City

14,755

6.1%

705

620

$2,167

$2,138

915

198

Huntington/ Franconia/ Springfield

19,209

3.5%

228

97

$1,544

$1,505

683

Landmark

18,915

3.4%

173

294

$1,520

$1,484

219

116

Old Town/ Virginia Highlands

14,606

11.5%

725

842

$1,918

$1,847

1,498

198

Reston/ Herndon

15,943

4.7%

206

308

$1,742

$1,690

448

2,925

Rosslyn Ballston Corridor

26,661

3.6%

38

60

$2,179

$2,115

1,368

South Arlington/ Columbia Pike

13,066

4.2%

65

(36)

$1,661

$1,618

Tysons Corner

10,337

13.9%

182

232

$2,118

$1,982

425

1,501

NORTHERN VIRGINIA TOTALS

133,492

5.7%

2,322

1,025

$1,857

$1,801

3,505

6,989

Bethesda/ Chevy Chase

11,656

10.0%

234

213

$2,303

$2,198

607

321

Gaithersburg/ Germantown

22,187

4.9%

429

613

$1,471

$1,433

1,116

Northern Prince George's County

54,944

3.0%

328

215

$1,316

$1,271

501

1,929

Rockville

16,680

5.5%

155

328

$1,883

$1,817

1,096

Silver Spring

31,583

3.3%

266

13

$1,660

$1,631

149

921

Southern Prince George's County

43,858

3.3%

45

422

$1,298

$1,248

1,500

SUBURBAN MARYLAND TOTALS

180,908

4.0%

1,457

1,804

$1,507

$1,458

1,257

6,883

DC METRO TOTALS

442,367

4.6%

5,247

4,308

$1,708

$1,661

6,448

24,380

Sources: Cushman & Wakefield Research, CoStar

*All figures are multi-family units, except vacancy rate and rental rates.

Key Sales Transactions 2Q 2016

PROPERTY

UNITS SELLER/BUYER

Riverside Apartments - 5860 Cameron

Run Terrace, Alexandria, VA

1,222

Flats 8300 - 8300 Wisconsin Avenue,

Bethesda, MD

PRICE

PRICE/UNIT

Aimco / WRIT

$244,775,000

$200,307

359

StonebridgeCarras JV Walton Street / Invesco RE

$207,000,000

$576,602

Residences at Market Common - 2800

Clarendon Boulevard, Arlington, VA

300

TIAA-CREF / AvalonBay

$120,300,000

$401,000

Avalon Potomac Yard - 731 Seaton

Avenue, Alexandria, VA

323

JBG JV MRP JV Cornerstone / AvalonBay

$108,250,000

$335,139

Flats at Atlas - 1600 Maryland Avenue,

NE, Washington, DC

257

Clark Realty Capital / Westbrook JV Kettler

$94,875,000

$369,163

The Warwick - 1131 University Boulevard

W, Silver Spring, MD

392

Greystar Management / LivCor

$86,058,500

$219,537

Sources: Cushman & Wakefield Research, Real Capital Analytics, CoStar

About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way
people work, shop, and live. Our 43,000 employees in more than 60 countries help investors and
occupiers optimize the value of their real estate by combining our global perspective and deep local
knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the
largest commercial real estate services firms with revenue of $5 billion across core services of agency
leasing, asset services, capital markets, facility services (C&W Services), global occupier services,
investment & asset management (DTZ Investors), project & development services, tenant
representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow
@CushWake on Twitter.

Joseph C Wood
Research Analyst
Tel: +1 202 266 1317
Fax: +1 202 223 2989
Email: joe.wood@cushwake.com

Nathan Edwards
Regional Director, Research
Tel: +1 202 266 1189
Fax: +1 202 223 2989
Email: nathan.edwards@cushwake.
com
2101 L Street, NW
Suite 700
Washington, DC 20037
The information contained within this
report is gathered from multiple sources
considered to be reliable. The information
may contain errors or omissions and
is presented without any warranty or
representations as to its accuracy.
Copyright 2016 Cushman & Wakefield. All
rights reserved.

cushmanwakefield.com | 2