TAKEAWAYS

• The total availability rate in Suburban Maryland dropped by a modest 10 basis points (bps) quarter over quarter ending at 21.6% in Q4 2021. The availability rate peaked in 2021 at 22.0% and has been gradually declining ever since, however, due to limited demand it will take some time to return to pre-pandemic levels.
• Leasing volume at year-end 2021 was 0.6 million square feet (msf) which was below the 5-year average of 0.7 msf but a 8.8% increase from Q3 2021 due to Tetracore / CirrusDX taking 93,400 sf at 77 Upper Rock Circle in Rockville.
• Sublease space on the market decreased for the second consecutive quarter ending Q4 2021 at 1.3 msf. While some sublease space has been leased, more has been pulled off the market as tenants reevaluate their office needs. However, more sublease space needs to be removed for the market to fully recover.
• The full impact of a mainstream hybrid remote work policy has not yet been felt industry-wide, however, flexibility with regards to both lease terms and build-out will be at the forefront of both occupiers and landlords as the pandemic hopefully eases in 2022.

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