A report from commercial real estate firm Studley found that in the first quarter of 2011 strong demand from the government caused a fall in the availability of office space in certain areas of Washington.
In particular, the area dubbed North of Massachusetts Avenue (NOMA) has seen large uptake, as has the southwest area of the capital.
“We’re seeing that tenants with 150,000-plus square-foot requirements considering non-core submarkets have decidedly fewer options to choose from given the recent federal leasing activity, while tenants looking downtown have many more choices”, Christian Volney, research manager for Studley’s DC office, said.
However, according to the research from Studley, demand from the private sector has not increased, and there has been very little change in the availability rate of office space in some areas of the city.
The Central Business District of Washington currently still has a relatively high availability rate of 13.5 per cent. This means that overall Washington’s availability rate has not declined drastically.
And the next few years are not likely to see many private clients needing to lease large office spaces, Studley predicted.
“Of DC’s top 50 law firms, for example, there are only three with leases expiring prior to 2014 that are currently in the market for space,” said Volney.
Studley Executive Vice President Tom Fulcher added: “If government leasing activity slows, the District will need to rely on a broad-based recovery in the private sector to support the commercial real estate market.
“While substantial changes to spending and entitlement programs will be unlikely to affect the market until after the 2012 election, we will experience a bit of a lull in the number of large tenants with lease rollovers in the next several years, which could impede rent growth and limit demand for new space.”
Editor’s notes: In Q1 of 2023, the vacancy rate in Washington, DC was 16.7 per cent, which is considerably higher than the rate of 11.85 per cent at year-end 2019.
In the same period (Q1 2023), the national US average vacancy rate was 20.2 per cent
Washington DC’s vacancy rate was predicted to increase as there was 1.34 million square feet of space under construction or redevelopment.
As the market had observed occupiers taking higher quality space yet with a smaller footprint, there was a chance that the vacancy rate could increase significantly.
However, new start developments have reduced due to rising construction costs, so it may be blunted somewhat, it was thought.
Research conducted in June 2026 found that the US nationwide office vacancy rate was 18.6 per cent in the first quarter of 2026 and Washington, D.C.’s vacancy rate was at 22.6 per cent.
Due to a flight to quality by occupiers from all sectors, the vacancy rate for prime ‘Trophy’ office space in Washington was at 10.6 per cent.
There were no schemes in the development pipeline in Q1 2026. There were two schemes planned for delivery between 2028 and 2031; however, both were nearly fully preleased ahead of construction and would not add available supply to the market.
This would likely place upward pressure on Trophy office rents as availability declines.
Asking rent for Class A office space in the American capital city at the end of Q1 2026 stood at $62.38 per square foot per annum, representing a 6.7 per cent year-on-year increase.
Overall average asking rent stood at $57.08, representing a 4.3 per cent increase on the same period in 2025.