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Market Report

Washington, D.C. Office Market Report

2024 Investment Forecast

D.C. Notes Nation-Leading Class B/C Demand,
Directing More Investors to Larger Suburban Assets

Mid- and lower-tier spaces outperforming. Class B/C net absorption was estimated at over 1.4 million square feet in Washington, D.C. through 2023, higher than any other major metro. The feat is made even more impressive by the fact that Washington, D.C. has the least amount of such space, relative to its size. This dynamic supported a sizable decline in the mid- to low-tier vacancy rate last year, which is poised to continue. More than 10 companies are expanding their footprints into Class B/C offices across Washington, D.C. in 2024, moving into over 475,000 square feet of space. The list includes OSI, Powers Pyles Sutter & Verville P.C., and CNAS, who are all taking up mid-tier floor plans in the District itself. Here, demand for Class A floor plans could also rally to a post-pandemic high. More than 25 move-ins to local top-tier offices are planned for 2024, totaling over 600,000 square feet. Tenant preferences in the Class A sector, however, are mostly confined to the newest and most amenity-rich builds. Only five of the 25 move-ins listed above will be to top-tier spaces that were built prior to 2018.
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