Around the Region, Ups and Downs in Office Vacancy Rates

The office vacancy rate in Prince George's County spiked during the second quarter, reaching a nine-year high of 13.8 percent, up from 11.6 percent in the previous quarter and a year earlier, according to the CoStar Group real estate services firm. Asking rents continued to rise to $21.44 a square foot from $19.72 a year ago.

The departure of two large corporations from the market caused the absorption rate to plummet in Prince George's, which has one of the smaller office markets in the Washington region with 22.2 million square feet.

Royal Ahold sold its Landover headquarters buildings, with 350,000 square feet of office space, as part of its workforce reduction plan for Giant Food, leasing only 53,000 square feet of office space in another Landover complex for its remaining workers.

Insurance giant Aetna Inc. vacated 138,022 square feet in Landover. Harris Corp., a telecommunications and government contracting company, will sublease a portion of the space starting later this year, leaving 107,522 square feet empty.

Robert E. Hartley, director of market research for the Washington area at Trammell Crow Co., said demand should rebound as more companies move into the northern part of the county, particularly near College Park.

The National Oceanic and Atmospheric Administration is building a weather prediction center next to the University of Maryland. Hartley expects additional companies to invest in the area as more retail outlets and student housing developments move in.

"Prince George's has been a pretty slow-moving market all along," he said. "But there's a lot of government and a lot of need to support that local economy that will pick it up."

The $2 billion National Harbor project, a mix of high-end retail, residential, entertainment and office space near Oxon Hill in southern Prince George's is also expected to bolster demand.

-- Kim Hart

Howard County

The office vacancy rate in Howard County was 12.6 percent in the second quarter, up from 8.5 percent a year earlier, and the amount of new office space under construction dropped.

But the county's market remains robust and well-positioned for growth, said Peter Briskman, a vice president and real estate adviser at Staubach Co. Vacancies are up because deals are in the making and leases have yet to be signed at new buildings, Briskman said, but once they are the vacancy rate will drop. "The market is cyclical," he said. "What we're seeing now is some lag time."

The county had 524,109 square feet of office space under construction in the quarter, down from 893,864 square feet at the same time a year ago. Briskman said there was plenty of speculative construction, projects built without signed leases, a signal of underlying confidence in the marketplace.