Washington, DC office market reports

Q2 2022

The Washington, DC office market’s recovery continues to lag peer cities with many companies delaying their return-to-office decisions due to the looming recession. As employers maintain their hybrid postures, this has led to another quarter of record-high vacancies in the city, and landlords continue to get creative with their concession packages to increase occupancy in their buildings. With local owners facing upcoming loan maturities, there is a continued focus on weighted average lease term (WALT), which could also create acquisition opportunities for foreign capital, or institutional investors, looking to “buy low” for those that are most exposed.

147 MSF

Inventory

With limited buildings delivering this quarter, DC’s inventory rose slightly by 371k sqft. although remains generally flat. With increased construction costs, coupled with a rise in interest rates, further development in the city will be worth monitoring.

 

-666 KSF

Net absorption

After early move-ins during Q1 that had a positive effect, including several office-to-residential conversions affecting inventory, absorption turned negative during this quarter.

 

$62.13

Direct asking rent

Climbing concessions, including all-time high free rent and tenant improvement allowances, have highlighted the ability of tenants to be highly selective in their space requirements due to increased competition amongst landlords.

 

20.2%

Availabilities

Landlords are breaking up their large block availabilities to build out move-in ready, and spec suite, to appeal to a broader tenant base.

 

15.6%

Vacancy

Vacancy continues to trend upwards quarter-over-quarter, by 400 basis points in Q2, as DC experiences increased volatility due to the lack of return-to-office.

 

$591 M

Investment sales

Office investment volume in DC continues to decline as local-owners are executing their exit strategies, or consolidating their portfolios, including an exit from the city all-together in favor for emerging markets.

 

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Get in-depth office market reports and insights from commercial real estate experts in the Washington DC Metro area. Avison Young advisors look at Washington, DC commercial real estate activities and the latest Washington, DC statistics to provide you expert market research on Washington DC's office properties.

Explore different topics like the latest office market pricing trends and analysis of Washington DC's current office real estate market conditions. Gain a better understanding of Washington DC’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Washington DC's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in Washington, DC.

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