The office construction pipeline in the DC Metro region sits at its lowest level in over 10 years, along with 2023 construction starts registering their lowest level over the same timeframe.
Structural issues as it relates to office utilization are a driving factor behind this phenomenon, coupled with cyclical macroeconomic issues such as high inflation, which have resulted in higher interest rates and therefore suppressed new development.
What does this mean? This will result in supply constraints in the trophy segment of the office market, with new product becoming even rarer than it already is.
New construction has represented the most-in-demand type of space since 2020, and with construction starts almost at a standstill, this type of product is poised to become even rarer.
December 19, 2023