District of Columbia Office Market
- The vacancy rate increased to 19.7% in the third quarter of 2023, up 30 basis points quarter-over-quarter and 60 basis points year-over-year. The lack of new speculative office construction is advantageous in helping to balance supply with waning demand.
- Average asking rents measured $56.27/SF in the third quarter of 2023, an increase of $0.44 quarter-over-quarter. This is the first quarter of positive rent movement after the market experienced four straight quarters of rent decline.
- Leasing activity improved from the second quarter of 2023 despite an ongoing period of lower activity. The NoMa submarket was most active during the quarter, containing the three largest transactions which totaled over one million square feet.
- The Business/Professional and Government industries remain the top regional industries, constituting almost half of the employees in the region. With both industries being large office-users, this provides optimism for the stability of the office market going forward.