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DC Industrial Vacancy Declines as Data Center-Related Demand Grows
Data center growth is driving additional industrial demand in the Washington, D.C. region, particularly in Northern Virginia, which has accounted for nearly 40 percent of U.S. data center permit activity since 2022.
More than 3.3 million square feet of newer industrial space was absorbed over the past year, helping reduce the market’s supply overhang, according to a recent report from Marcus & Millichap. “Washington, D.C.’s industrial market has worked through a significant amount of new supply, and we’re beginning to see that pressure ease,” said Brian Hosey, senior managing director, market leader. “Northern Virginia is leading much of that improvement, and the continued growth of the data center sector is creating additional space needs for contractors and other industrial users.”
The report also found that industrial vacancy fell to 7.6 percent in June, making Washington, D.C., the only major Northeast market to post a year-over-year decline. Additionally, average asking rents rose 5.1 percent year-over-year, the fourth-largest increase among major U.S. industrial markets.
