Washington, DC office market report

Q4 2024

Reflecting on 2024, the DC office market showed signs of growth but also faced ongoing challenges similar to those seen in other major markets nationwide. A potential positive for Q4 was the stabilization of vacancy rates. While this could be a temporary trend, akin to what was observed in Q3 of 2021, other favorable factors, like increased investment sales volume, might help sustain this positive momentum. Investment sales rebounded in 2024, in comparison to what was a very low trading year in 2023, and while distressed properties remained the primary focus, there were also several higher-quality assets that traded hands as the economic outlook potentially shifted. 
12.1 %

Direct availability in trophy buildings

The Trophy segment of the market has continued to outperform all others, as a flight to quality in the market continues to be observed. Tenants are willing to pay a premium for high-quality space, and access to premier amenities, motivated by talent recruitment and retention.

$1.6 B

YTD Investment Sales volume

Following a lackluster investment sales market in 2023, office trade volume has nearly quadrupled that in 2024. Pricing appears to have bottomed out, as investors have entered the market with greater confidence and opportunity, though still cautious. Demand for core profile assets remains strong but investors continue to act with caution due to tenants' slow return, illiquidity in the debt market, and uncertainty surrounding the new administration’s approach towards underutilized office space. Total investment volume rebounded in 2024 due to investors seizing the opportunity to acquire assets at a reset basis.

400 k sf

Under construction office developments

The DC office development pipeline continues to be at its lowest point in more than 20 years, driven by factors such as elevated construction costs, high interest rates, and diminished tenant demand. The shortage of new deliveries has created a bottle neck in the availability of Class A and Trophy space. However, as buildings are sold at a much lower basis and lending rates improve, new construction activity could pick up.

Your source for the latest Washington, DC office market reports

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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