Suburban Maryland’s office vacancy hit a record high in the first quarter of 2024, owing primarily to moves by two major tenants in Montgomery County, according to a recent market report from brokerage CBRE.
The submarket, including much of Montgomery and Prince George’s counties, entered the new year with 232,000 square feet of negative net absorption, per the March 31 report. That brings vacancy, which has risen steadily for several years, to 20.5% — 4.9 percentage points higher than when the pandemic hit in March 2020.
The jump stems primarily from food services and facilities management giant Sodexo reducing its headquarters footprint in a move from Gaithersburg to North Bethesda, and global alternative investment manager Ares Management Corp. (NYSE: ARES) consolidating its Bethesda operation with its office in Northern Virginia.
Ares Management, headquartered in Los Angeles, quit 63,000 square feet it had at 2 Bethesda Metro Center — a 299,000-square-foot office built in 1999 and owned by an affiliate of The Chevy Chase Land Co. The company will now “operate fully from its Northern Virginia location,” per CBRE’s report.
