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DC Office Market Shows Renewed Momentum
Washington, D.C.’s office market saw renewed leasing momentum in Q2, led by several large law firm transactions after a slower start to the year, according to a recent report by Colliers.
While vacancy remains elevated, a lack of new deliveries, continued inventory reduction through demolitions and conversions, and rising rental rates point to a market that is gradually stabilizing. Leasing activity rebounded in Q2, highlighted by the largest private sector deal for the quarter at 1701 Pennsylvania NW. The largest Federal Government lease came from the United States Department of Agriculture’s downsizing at 355 E Street SW for 86,409 square feet.
Overall, asking rents increased to $56.09 per square foot, with Class A rents rising to $60.02 per square foot. Vacancy increased slightly to 21.3%, but has largely stabilized as office-to-residential conversions and redevelopment continue to reduce aging inventory. No new office buildings were delivered for the second consecutive quarter, while nearly 150,000 square feet of obsolete inventory was removed from the market.
