Washington DC Metro Area Market Report Q3 2018
The vacancy rate for the Washington, DC MSA held steady at 16.2% in Q3 2018. Vacancy has been static since 2015 despite modestly increasing demand throughout the region. Structural oversupply of outdated suburban office space will make reductions to overall vacancy difficult. Despite suburban oversupply, demand for high-quality space in dense submarkets has fueled widespread in-fill development/construction activity. New construction has helped to push rents upward, measuring $37.24/SF in Q3 (+0.58 YoY). Despite rent growth, tenant favorable conditions are expected to persist in most submarkets across the region as increased rents are offset by generous concession packages.