District of Columbia Office Real Estate Market Report

District of Columbia Office Market

The District of Columbia experienced 107,571 SF of negative net absorption during Q3 2024. The vacancy rate declined 10 basis points quarter-over-quarter at 20.2%, although increased 100 basis points year-over-year. The District of Columbia’s development pipeline remains historically low, with no deliveries during the quarter. The sole property under construction in the district is 600 Fifth, a 400,000-square-foot office building in the East End. Overall, asking rents have decreased slightly during 2024. Class A rents were the cause of this, as they have declined 2.4% year-to-date, while Class B rents have increased 1.6%. The longer-term trend, however, shows that both Class A and Class B rents have remained relatively flat since 2019. The rent spread between direct and sublet deals has settled around $10, after having spiked in 2020 and 2021 when it hovered around $12 to $14.