Washington DC Office Figures Q4 2024

Office vacancy dropped 20 basis points to 22.5% during the fourth quarter, reversing a trend of occupancy loss from the first three quarters of the year and marking the first quarter of positive absorption since Q1 2022. Two major drivers of occupancy gain were the US Agency for Global Media’s relocation from federally-owned space in Southwest D.C. to leased space at 1875 Pennsylvania Avenue NW, and Monumental Sports & Entertainment’s 120,000 sq. ft. expansion at Gallery Place.

Lease volume hit a three-year high in 2024 at 8.0 million sq. ft, with 2.2 million sq. ft. leased during the fourth quarter. Law firms drove activity at the end of the year, accounting for 41% of Q4 lease volume. Activity throughout the year reflected the city’s typical tenant mix, with government tenants leasing the highest volume, followed by law firms, business and financial services, and nonprofits.

Washington, DC’s private sector occupiers continue to exhibit a flight-to-quality. Trophy and Class A+ buildings account for just 23% of the city’s inventory but have captured 59% of all private sector relocation volume since 2020, a figure that grows to 90% when considering relocations larger than 50,000 sq. ft. Consistent tenant demand for high-quality space paired with supply constraints at the top of the market will continue to boost fundamentals in the Trophy and Class A+ segments.