Washington, D.C. Office Market Report

Modern offices outperform as older stock struggles. Washington, D.C.’s office market faces a potential turning point as private sector and federal in-office work mandates converge with record-low development, slowing vacancy expansion after years of post-pandemic increases. A higher government in-office attendance rate may attract adjacent private-sector tenants in Downtown D.C. With post-2010 buildings maintaining roughly 10 percent vacancy in early 2025, tenants might increasingly opt for slightly older Class A assets. Virginia suburbs are well positioned to benefit from their relatively newer Class B/C inventory, where post-2000-built properties sustain vacancy near 5 percent — less than half that of older stock. Amazon’s return-to-office plans and notable regional presence could further bolster demand from support firms. However, with the federal government occupying nearly 30 percent of the D.C. metro’s office stock and the GSA potentially terminating up to 7,500 leases in coming years, uncertainty remains. While private demand may mitigate some of the impact, widespread agency downsizing could pressure federally dominated submarkets with older, outdated properties.