The Washington region still has a huge office vacancy problem, but leasing activity has significantly picked up.
Commercial real estate firm CBRE reports the D.C. metro is now one of the top U.S. office markets for showing improved demand for new office leasing. In October, leasing activity in the region was 2% above its pre-pandemic baseline. October was the first time the D.C. area surpassed pre-pandemic leasing levels, and leasing has made steady gains since April.
CBRE says the D.C. metro is ranked fourth among top office markets for leasing activity.
CBRE tracks office market activity by the number of tenants in the market, or companies actively looking for new space, finalized lease agreements and the availability of sublease space.
“The improvement in the Washington region’s leasing activity through October is another indication of a market stabilizing and slowly renewing itself for its ‘next normal,’” said CBRE senior director of research and analysis Ian Anderson.
“Data also shows more people returning to work in area offices, which aligns with our expectation for greater activity following significant improvement observed in more volatile markets like New York City.”
Despite the rebound in leasing activity, the office vacancy rate in the District itself hit a record high 18.2% in the third quarter.
In addition to Washington, D.C., Boston, Atlanta, Houston, Manhattan, Denver and Seattle also showed improved market demand in October.
CBRE’s full “Pulse of U.S. Office Demand” report is posted online.
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