•Demand in Montgomery County was concentrated in submarkets along the I-270 Corridor with 282,000 sq. ft. of positive absorption in the first half of the year, while the rest of Montgomery County posted 23,000 sq. ft. of contraction. North Bethesda and North Rockville absorbed a combined 120,000 sq. ft. in Q2 2018.

•The “flight to quality” continues, with Class A inventory posting 420,000 sq. ft. of occupancy gain during the first half of the year, while occupancy in Class B and Class C buildings contracted by 154,000 sq. ft.

•Although interest in Trophy/Class A+ space remains high, developers are cautious with speculative construction. We expect that new groundbreakings will be predicated on significant preleasing commitments.