Washington D.C. office market reports slow leasing activity as availability rate remains near an all-time high

The Washington D.C. office market continued to see a slowdown in leasing activity with just over 1.0 million square feet (mst) executed in the third quarter, down from 1.6 msf reported last quarter and 1.8 msf reported a year ago. While this could be attributed to a typical seasonal drop in deal volume, macroeconomic concerns such as a potential recession, geopolitical concerns, as well as the increased use of hybrid workplace strategies have all combined to create uncertainty despite strong underlying employment fundamentals. Sublease leasing activity saw a greater drop in demand as only 42,000 sf was leased in the third quarter, down from 99,000 sf last quarter. The federal government remained active as U.S. Customs and Border Protection leased 99,515 sf at 90 K Street Northeast. With office availability remaining at a record high and leasing activity remaining sluggish, Washington D.C. will remain a tenant-favorable office market in the near-term.

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