Washington Metropolitan Area Office Market
| Average Asking Rent (Price/SF) | $41.76 |
| Vacancy Rate (%) | 18.6% |
| Net Absorption (SF) | -524,612 |
The economic recovery in the Washington metro area accelerated in the fall of 2021, following a period of slow growth in late summer. Although labor market growth accelerated, office market recovery was less pronounced. Quarterly net absorption was in line with the third quarter, indicating a slowing pace of recovery and causing vacancy to increase 30 basis points from the previous quarter. Occupancy losses have been the largest factor in driving vacancy growth over the course of the pandemic, however, new construction deliveries were a significant factor in the fourth quarter. Despite the region’s elevated vacancy, average asking rents continue to appreciate, though at a slowing rate. Average asking rents increased 1.0% over the last year to $41.76/SF.
District of Columbia Office Market
| Average Asking Rent (Price/SF) | $56.88 |
| Vacancy Rate (%) | 17.2% |
| Net Absorption (SF) | 44,848 |
The District of Columbia’s office market continued to show signs of modest recovery from the pandemic’s worst effects. For the first time since the second quarter of 2020, the District recorded positive net occupancy. Although the move-ins have outweighed the move-outs over the last quarter, other market fundamentals remain pressured by the pandemic. Asking rents have contracted for the last two quarters and a wave of new deliveries increased vacant space in the market, causing the vacancy rate to rise 40 basis points on the quarter, despite occupancy growth.
Download District of Columbia Office Market Report 4Q21
Suburban Maryland Office Market
| Average Asking Rent (Price/SF) | $30.26 |
| Vacancy Rate (%) | 16.8% |
| Net Absorption (SF) | -185,190 |
Suburban Maryland’s office market recovery remained static in the fourth quarter of 2021. Net absorption totaled negative 185,190 square feet on the quarter; marginally less negative than last quarter, but still largely flat. The overall vacancy rate was 16.8% at the end of the fourth quarter, an increase of 40 basis points from the previous quarter and an increase of 160 basis points from one year ago. The average asking rental rate measured $30.26/SF, an increase of 4.2% from fourth-quarter 2020. The soft office market fundamentals in Suburban Maryland are likely to slowly tighten over the next two years; leasing activity is increasing slowly, but the Omicron variant and public health conditions are why leasing remains limited as tenants remain cautious in assessing office needs.
Download Suburban Maryland Office Market Report 4Q21
Northern Virginia Office Market
| Average Asking Rent (Price/SF) | $34.49 |
| Vacancy Rate (%) | 20.6% |
| Net Absorption (SF) | -384,270 |
Northern Virginia’s office market growth continues to be stifled by COVID-19 and the emergence of new variants. Quarterly net absorption registered negative 384,270 square feet, which brought Northern Virginia’s year-to-date absorption total to negative 3,335,370 square feet. While negative, demand during the fourth quarter was stronger than the previous quarter, suggesting stronger recovery in net occupancy in 2022. The overall vacancy rate was 20.6% at the end of the fourth quarter, up 20 basis points from the prior quarter and up 100 basis points from one year ago. The overall asking rent averaged $34.49 per square foot, an increase of 1.8% over the past 12 months.
Download Northern Virginia Office Market Report 4Q21