District of Columbia Market Report Q1 2019
The District of Columbia’s office market has remained active in 2019. Net absorption was 386,536 SF in Q1, aided by the delivery of 1.0 million SF of new construction. Of this newly-delivered space, over 833,000 SF is net-new to the market. Although vacancy increased to 13.1%, leasing activity remained strong. Chemonics headlined the quarter’s largest leases by announcing a pre-lease of 290,000 SF at The Yards in the Capitol Riverfront. Non-downtown submarkets such as Southwest, Capitol Hill and Capitol Riverfront have recently exhibited noteworthy momentum. With an uptick in leasing and development activity, these maturing tertiary submarkets are beginning to compete with Downtown, particularly for large-footprint tenants looking for cost-effective, build-to-suit opportunities.