District of Columbia Office Market
The District of Columbia experienced 37,698 SF of positive net absorption during the first quarter of 2025. Registering 18.9% as of the first quarter, the vacancy rate has declined 30 basis points quarter-over-quarter and 80 basis points year-over-year. After the Voice of America media network suddenly closed in March, the District still clocked net positive absorption this quarter—a remarkable feat in the wake of 350,000 SF going back to EastBanc, the owner of 1875 Pennsylvania Ave NW. The sole property under construction in the district is 600 Fifth NW, a 400,000-square-foot office building in the East End that is scheduled to deliver in the first quarter of 2026. Half of the building is already preleased to law firm Crowell & Moring. After decreasing year-over-year since 2021, overall asking rental rates rebounded during the first quarter of 2025, with 0.7% annual growth. Still, rents remain 1.5% lower than their peak in 2020. The conversion of obsolete office space to other uses helps to raise average rents to a level more reflective of competitive product D.C. continues to benefit from one of the lowest sublease availability rates (2.3%) in the nation, ranking #1 among all gateway markets for lowest sublease listings.
Download District of Columbia Office Market Report 1Q25