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D.C. Office Vacancies Reach New High
Following two years of healthy rebound in demand, office vacancy in Washington, D.C. hit an all-time high of 14.3% in the first quarter, CBRE reported. Driving Q1’s negative absorption were a space consolidation by the Federal Communications Commission and the National Institute of Food and Agriculture’s relocation to Kansas City.
The coronavirus pandemic didn’t leave its mark on the District’s Q1 numbers, but is expected to drive vacancies north of 15% by year’s end. “While the full impacts of COVID-19 are still rapidly evolving, the short-term outlook for office real estate is to the downside, with slowdown expected in leasing and construction activity, and vacancy rates likely to increase,” according to CBRE.
Longer term, said CBRE, “as the government’s fiscal and monetary stimulus begins to bear fruit, the U.S. economy should return to growth by year-end, resulting in a recovery of office demand in 2021.”
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