Q1 2021 District of Columbia Market Report
The District of Columbia’s office market fundamentals continued to face significant shocks four quarters post-impact of the pandemic. Pandemic-induced economic uncertainty continues to cause a freeze in leasing activity, with total volume falling 36% from year-ago levels. First-quarter vacancy, a market fundamental affected by COVID uncertainty, ended at 15.9%, a 90 basis points (bps) increase from year-ago levels. Asking rates in the District of Columbia continued a downward trend to $57.91/SF, continuing negative growth, down $0.21/Sf from year-ago levels. Though trepidation and uncertainty encompass the market, vaccine distribution has led to increased public optimism and return-to-office strategies. This optimism and office occupancies are expected to grow as vaccines are projected to become widely distributed in the upcoming year, bringing momentum and increased activity to the market.