District of Columbia Office Market
The District of Columbia’s vacancy rate ended 2025 at 20.4%, an increase of 50-basis points quarter-over-quarter and 100-basis points year-over-year. Annual absorption registered net negative 1.7 MSF, including negative 304,154 SF during the fourth quarter. Average asking rates have finally turned a corner, increasing by 0.4% over the quarter and 1.9% over the year. Following three years of annual decline, office rents ended 2025 at $57.19/SF. The District’s trophy office product has outperformed all other asset classes, with vacancy tightening 890 basis points since peaking during the second quarter of 2020, ending 2025 at 10.7%.The District of Columbia’s development pipeline remains historically low, with one delivery occurring during 2025 and no projects currently under construction. 600 Fifth Street, NW delivered during the fourth quarter of 2025, the market’s first new office property added since the second quarter of 2024. Conversions covering more than 7.0 million SF of office space have been completed or proposed in the District since 2020. Office-using jobs in the region are currently 4.3% higher than five years ago, but only slightly higher than in March 2020, just before the pandemic began. Year-over-year office employment declined by 1.3%.