DC Office Sector Shows Highs and Lows

Washington, D.C.’s office sector showed mixed performance across its fundamentals in the first four months of the year, according to Yardi Matrix information.

Office investment activity stayed strong, placing the metro in the sixth place nationally as of April. While pricing has high enough to rank among the top 10 markets, it remained below the national average.

Meanwhile, the nation’s capital recorded one of the smallest pipelines among similar markets, mirroring broader office real estate trends. At the same time, office vacancy edged higher year-over-year, while asking rents continued to outpace national levels.

Office investment holds firm in Washington, D.C.

Investors paid a combined $810 million for Washington, D.C., office assets year-to-date as of April, placing the metro sixth nationally. Manhattan led with $2.3 billion in deals, followed by San Francisco ($1.6 billion) and Dallas ($1.1 billion). The smallest sales volume among gateway markets was recorded in Seattle, where acquisitions totaled $255 million.

Properties in the district sold at $191 per square foot—below the national average of $214 per square foot. Manhattan remained the most expensive market in the U.S., with assets selling at $712 per square foot. San Francisco ($686 per square foot) and Miami ($444 per square foot) came in on the second and third place nationally.

The market’s top five priciest sales during the first four months of 2026 amounted to $471.1 million.

Stream Realty’s $163 million acquisition of 2001 M St. NW, a 285,000-square-foot building in the city’s central business district, was the largest investment. The company also secured a $118 million acquisition loan from ACORE Capital. Brookfield Properties sold the Class A midrise in March.

That sale came on the heels of the market’s second-largest office transaction, which involved a property on the same street. Just a few days earlier, the building at 2445 M St. NW changed hands for $101 million. Eagle Cliff Real Estate Partners purchased the property, formerly known as One Westin Center, from Beacon Capital Partners and Mesa West Capital provided $80 million in acquisition financing.

Office pipeline trails gateway markets

Washington, D.C.’s pipeline comprised 654,847 square feet of competitive office space as of April, trailing behind most gateway markets. Only San Francisco (571,374 square feet) and Chicago (202,568 square feet) recorded smaller under-construction volumes, and Yardi Matrix showed no development activity for Seattle.

Boston remained the leader for office development among the top 25 U.S. office markets, with 3.9 million square feet underway. Manhattan (2.9 million square feet) and Los Angeles (1.6 million square feet) rounded out the top three.

The District’s under-construction pipeline accounted for 0.2 percent of its total office inventory, half the national average of 0.4 percent. When taking into consideration projects in planning stages, the figure rose to 2.3 percent—above the 1.5 percent national average.

The largest office building underway in the metro is HITT Contracting’s new headquarters in Falls Church, Va. The firm broke ground on the 270,000-square-foot project in January 2025 and the six-story structure is expected to reach completion next year.

Another significant development is Mars’ new corporate headquarters in McLean, Va. The project involves a major renovation and expansion of an existing office building, at 6885 Elm St., that dates back to 1984. Upon this year’s expected delivery, the updated property will total 126,974 square feet.

Office vacancy pressures persist

The office vacancy rate reached 19.5 percent in Washington, D.C., as of April—above the national average of 17.6 percent—marking a 30-basis-point increase over the past 12 months. Miami ranked first in the nation, with a 12.5 percent rate, followed by Manhattan (13.1 percent).

The District’s asking rents averaged $40.28 per square foot, above the $32.91 national threshold. Manhattan once again led the U.S. at $69.29 per square foot, followed by San Francisco ($62.03 per square foot) and Miami ($58.41 per square foot). Meanwhile, Chicago remained the most affordable among gateway markets, at $28.02 per square foot.

In one of the market’s larger new leases, the Washington Commanders committed to 60,000 square feet at 2200 Pennsylvania Ave. NW. The landlord, BXP, relocated its own headquarters to make room for the American football team’s offices. Completed in 2011, the 458,831-square-foot building rises 10 stories in the District’s CBD and is LEED Gold-certified.

Coworking maintains significant presence in the metro

The District’s coworking sector comprised 7.4 million square feet as of April, according to CoworkingCafe. The amount represented 1.9 percent of the total leasable office space—below the national average of 2.3 percent. Among gateway markets, the highest share was recorded in Miami, at 4.2 percent, which surpassed Chicago at 2.8 percent.

The metro’s flex office footprint placed it fourth nationwide. Manhattan’s 12.3 million square feet stood out as the highest, while Miami had the smallest inventory across gateway cities at 3.4 million square feet.

Regus was the flex office provider with the largest footprint in D.C., its locations totaling 711,339 square feet. Other coworking operators include Navigate (584,976 square feet), WeWork (557,171 square feet), Industrious (536,019 square feet) and LocalWorks (409,525 square feet).

The metro recently witnessed the opening of the first coworking space in Prince George County. Namely, Venture X established a 13,898-square-foot location within a 118,600-square-foot building owned by COPT Defense Properties in College Park, Md. The property is part of the 150-acre Discovery District Maryland.