Despite uptick in Q2 leasing activity, overall office demand remains weak

Washington D.C. saw a small uptick in Q2 2023 leasing activity which totaled 1.4 million square feet (msf), compared to 950,000 in the previous quarter. The Q2 leasing activity was dominated by Government and Legal Services, as well as Associations and Non-Profits. Notably Court Services and Offender Supervisory Agency and DC Pretrial Services Agency signed an extension at 633 Indiana Avenue NW for 151,300 square feet (sf) which was the largest lease executed this quarter. Despite the small quarterly increase in activity, leasing volume is down 25.0% from the same period a year ago. Tenant flight to quality continues to characterize the office market with trophy buildings reporting lower availability rates, while non-trophy properties lag in performance.

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