Washington Metropolitan Area Office Market
The Washington D.C. Metro region experienced 250,000 SF of negative net absorption during the third quarter of 2025. The negative net absorption was largely seen in the District, which experienced 344,450 SF of negative net absorption, followed by Northern Virginia seeing 20,000 SF of negative net absorption. Suburban Maryland, however, saw positive movement during the third quarter of 2025, experiencing 115,000 SF of positive net absorption. Overall vacancy ended Q3 2025 at 20.8%, expanding 20 bps since the third quarter of 2024. Availability tightened, however, ending Q3 2025 at 23.2%, tightening 200 bps year-over-year. Leasing activity was concentrated in the District and Northern Virginia during Q3 2025, with these regions containing the five largest transactions. Government agencies, contractors and law firms dominated the headlines, with four of the largest leases of the quarter. After five deliveries throughout 2024 totaling roughly 1.2 MSF, the market has seen just one delivery during the first three quarters of 2025. The development pipeline ended Q3 2025 with 725,000 SF under construction spread across four properties.
Download Washington Metropolitan Area Office Market Report 3Q25
District of Columbia Office Market
The District of Columbia experienced 344,540 SF of negative net absorption during the third quarter of 2025. Registering 19.9% as of the third quarter, the vacancy rate increased 30 basis points quarter-over-quarter and 90 basis points year-over-year. Net negative absorption during the third quarter was partly due to several private sector tenants vacating leased space, including Georgetown University at 650 Massachusetts Avenue NW, Independent Bankers Association at 1615 L Street NW and Locke Lord at 2001 K Street NW. 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 preleased to law firm Crowell & Moring. Overall asking rental rates increased 0.2% quarter-over-quarter during the third quarter of 2025 and are 2.9% lower than their peak in 2020, ending the quarter at $56.38 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 (2.2%) in the nation.
Download District of Columbia Office Market Report 3Q25
Suburban Maryland Office Market
Suburban Maryland saw positive activity during Q3 2025, with 115,000 SF of positive net absorption, with the market currently seeing its first year of notable positive net absorption since 2019. Overall vacancy ended the quarter at 20.1%, tightening 20 bps quarter-over-quarter, however flat year-over-year. After a building boom from 2017-2022, the pace of new construction deliveries has begun to slow. There were only two office deliveries in Suburban Maryland in 2023 and no deliveries in 2024. Furthermore, 1600 Rockville Pike is the only property that remains under construction in the market, totaling 237,000 SF. Asking rents rose through the first three quarters of 2024, before declining to end the year, a trend that has continued so far in 2025. Asking rents have decreased 2.2% year-to-date, ending Q3 2025 at $31.19 PSF.
Download Suburban Maryland Office Market Report 3Q25
Northern Virginia Office Market
Net absorption for the region totaled negative 444,727 square feet during the second quarter of 2025, leading to a 30-basis-point increase in vacancy over the quarter, to 21.9%. Vacancy is up 90 basis points year-over-year. However, overall availability is down 150 basis points from a year ago, to register 24.2% as of the second quarter. Second-quarter leasing transactions were spread across Northern Virginia submarkets and many large transactions were new direct leases. Large transactions include the Department of Homeland Security lease extension of 76,897 square feet at 4601 N Fairfax Drive in the Ballston submarket. Rents in Northern Virginia averaged $36.29 PSF as of the second quarter of 2025, an increase of 2.2% over the past 12 months. Northern Virginia has not experienced any deliveries over the last three quarters. The market’s development pipeline remains historically low, with only three properties totaling 312,000 SF under construction as of 2Q25.
Download Northern Virginia Office Market Report 3Q25