Leasing activity picks up, but new federal initiatives cast uncertainty
Leasing activity increased 10.3% from year-end 2024, closing the quarter at 2.1 million square feet (msf). The federal government signed the two largest leases of the quarter. The Federal Deposit Insurance Corporation (FDIC) renewed 171,044 square feet (sf) at 3701 North Fairfax Drive, while the United States Postal Service (USPS) renewed 94,319 sf at 1735 North Lynn Street. New Department of Government Efficiency (DOGE) initiatives are generating discussion around potential impacts on the region’s commercial real estate market. The government has announced plans to reduce headcount, downsize leased office footprints, and dispose of federally owned buildings. These developments will be closely monitored in the quarters ahead.