District of Columbia Office Market
The District of Columbia experienced 546,635 SF of negative net absorption during the second quarter of 2025. Registering 19.7% as of the second quarter, the vacancy rate increased 50 basis points quarter-over-quarter and 70 basis points year-over-year. Net negative absorption during the second quarter was partly due to CoStar’s official vacating of its former headquarters at 1331 L Street NW, as well as some federal government tenants. The sole property under construction in the district is 600 Fifth NW, a 400,000-square-foot office building in the East End that is scheduled to deliver in the first quarter of 2026. Half of the building is already preleased to law firm Crowell & Moring.Overall asking rental rates declined 0.3% quarter-over-quarter during the second quarter of 2025 and are 2.9% lower than their peak in 2020, ending the quarter at $56.37 psf. Further conversion activity and a limited development pipeline will help to increase future rents. D.C. continues to benefit from one of the lowest sublease availability rates (2.3%) in the nation, ranking #1 among all gateway markets for lowest sublease listings.
Download District of Columbia Office Market Report 2Q25