Washington Metropolitan Area Industrial Market
|Average Asking Rent (Price/SF)||$15.08|
|Vacancy Rate (%)||4.8%|
|Net Absorption (SF)||-172,583|
Washington metro area industrial market fundamentals remain relatively tight in the first quarter of 2023. Rental rates in Northern Virginia, in particular, have continued increasing at a steady pace and now exceed $15 per square-foot. Overall rental rates have increased by 6.0% year-over-year, while vacancy has decreased by 20 basis points since Q1 2022. The market recorded negative 172,583 square feet of net absorption in the first quarter of 2023, down from the nearly 75,000 square feet of positive absorption recorded in the fourth quarter of 2022. The Washington metro area industrial market continues to show optimism for steady demand growth and investment performance. Across the metro, 3.1 million square feet of new supply is under construction. That represents 1.2% of the total exiting inventory. Elevated inflation has been a challenge for material costs, but supply chain disruptions are subsiding and overall enthusiasm for modern warehouse and distribution space should continue to support a sturdy overall market stability.