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Market Report

Washington, D.C. Industrial Market Report

2023 Investment Forecast

Historic Industrial Build Levels are Placing Upward
Pressure on Availability in the Nation’s Capital

Recent performance instills developer confidence. Historically low vacancy and double-digit rent growth emerging from the pandemic has stimulated robust levels of construction in the Washington, D.C. industrial sector. More than 6 million square feet of space came online last year, the largest annual total since 2005, and projections indicate completions will eclipse this threshold again in 2023. Much of the incoming supply is speculative, which is placing upward pressure on local vacancy rates. However, net absorption levels are outpacing the long-term average, indicating space demand remains strong despite recessionary fears and a slowing economy. Leasing activity is most pronounced in Northern Virginia, particularly along the Dulles Corridor and in Greater Fredericksburg, where local availability is at least 300 basis points below the metro average entering this year. Meanwhile in Suburban Maryland, proximity to multiple major highways is spurring tenant demand in Frederick and Prince George’s County.
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