Washington Metro Area Real Estate Market Reports

Washington Metropolitan Area Office Market

The Washington metro area vacancy rate ended 2025 at 20.8%, a year-over-year decrease of ten basis points. The Washington metro area registered approximately 125,000 SF of positive net absorption during the fourth quarter of 2025, helping to temper annual negative net absorption of 1.3 MSF. Asking rents ended 2025 at $43.70/SF, increasing 1.6% over the year. Rents have increased 5.7% over the last five years. The region’s trophy office product has outperformed all other asset classes, ending 2025 at a 13.3% vacancy rate, an increase of 70 basis points over the previous quarter, but down 20 basis points year-over-year.

Washington Metropolitan Area Industrial Market

The Washington D.C. industrial market experienced 4.2 million SF of deliveries while seeing almost 3.1 million SF of positive net absorption during 2025. With deliveries outpacing absorption, the market saw a slight annual expansion in vacancy, ending 2025 at a 7.3% vacancy rate, an increase of 30 basis points year-over-year. Despite the annual expansion in vacancy, the market’s vacancy remains relatively in line with the decade average of 6.2%. Despite seeing a slight deceleration, asking rents continue to grow at elevated rates, ending 2025 at $17.84/SF across all product types. This is an increase of 5.4% year-over-year, with the market seeing rents decelerate annually since the market had peak annual growth of 9.2% in 2022. Development remained elevated during 2025, as the market saw 4.2 million SF of deliveries throughout the year, higher than the decade-average of 3.4 million SF of annual deliveries. Construction levels remain relatively stabilized, ending 2025 with 38 properties under construction totaling over 4.1 million SF, in line with the market’s historical average of 4.0 million SF under construction.

District of Columbia Office Market

The District of Columbia’s vacancy rate ended 2025 at 20.4%, an increase of 50-basis points quarter-over-quarter and 100-basis points year-over-year. Annual absorption registered net negative 1.7 MSF, including negative 304,154 SF during the fourth quarter. Average asking rates have finally turned a corner, increasing by 0.4% over the quarter and 1.9% over the year. Following three years of annual decline, office rents ended 2025 at $57.19/SF. The District’s trophy office product has outperformed all other asset classes, with vacancy tightening 890 basis points since peaking during the second quarter of 2020, ending 2025 at 10.7%. The District of Columbia’s development pipeline remains historically low, with one delivery occurring during 2025 and no projects currently under construction. 600 Fifth Street, NW delivered during the fourth quarter of 2025, the market’s first new office property added since the second quarter of 2024. Conversions covering more than 7.0 million SF of office space have been completed or proposed in the District since 2020. Office-using jobs in the region are currently 4.3% higher than five years ago, but only slightly higher than in March 2020, just before the pandemic began. Year-over-year office employment declined by 1.3%.

Suburban Maryland Office Market

Suburban Maryland saw positive activity during the fourth quarter of 2025, with 11,662 SF of positive net absorption, leading to 66,707 SF of positive annual absorption, the market‘s first year of notable positive net absorption since 2019. Overall vacancy ended 2025 at 20.4%, up 10 basis points quarter-over-quarter, but down 20 basis points over the 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 continued through 2025. Asking rents have decreased 1.6% year-over-year, ending 2025 at $31.15/SF.

Northern Virginia Office Market

Northern Virginia’s office market posted 348,852 SF of positive net absorption in 2025 as large tenants began occupying committed space during the second half of the year. Vacancy declined to 21.3% as of year-end, down 90 basis points year-over-year, reflecting limited new supply and improving space utilization across select submarkets. The market was the beneficiary of several notable large leases signed during the fourth quarter of 2025, including The U.S. General Services Administration secured approximately 382,000 SF at the Randolph Building at 401 Dulany Street, and Booz Allen Hamilton taking 310,000 SF at Reston Station. In Northern Virginia, rents averaged $36.93/SF at the end of 2025, an increase of 3.0% since the end of 2024. The market’s development pipeline remains historically low, with only two properties totaling 89,750 SF under construction as of 4Q25.