DC Office Sales Kept Their Edge in 2025

Washington, D.C.’s office sector posted solid investment volume in 2025, according to Yardi Matrix, ranking third nationally for total sales even as pricing trailed the national average. Construction activity, however, remained muted.

Last year, Washington, D.C., doubled down on adaptive reuse as its primary downtown office strategy. The city rolled out Office to Anything, a tax-abatement program structured around a 15-year property tax freeze to push owners to reposition underused office buildings into housing, hotels, education or other uses.

The city also enacted a midyear tax adjustment allowing eligible office-to-residential projects to shift to residential tax classification at or near permit issuance, reducing carrying costs during the construction phase.

The District’s high-ranking sales

Washington, D.C.’s office investment volume in 2025 clocked in at roughly $3.8 billion, ranking third nationally. Only Manhattan ($7.8 billion) and the Bay Area ($4.8 billion) surpassed the market. Miami ($771 million) and Seattle ($779 million) registered the slowest sales activity among gateway metros.

D.C. assets traded for $172 per square foot on average, $20 below the national figure. Manhattan ($498 per square foot) remained the priciest market in the U.S., while Chicago ($65 per square foot) was the cheapest gateway metro.

Brookfield Properties was one of the most active investors in the metro last year, recording some of the largest deals of 2025 in D.C. In April, the company sold 701 Ninth St. NW to Exelon Corp. for $175 million. The 364,000-square-foot building is the headquarters of its Pepco Holdings subsidiary.

A month earlier, Brookfield Properties received $153 million for another Washington, D.C., office property. This time, the firm sold 750 Ninth St. NW, a 316,000-square-foot building, to Rockwood Capital.

D.C.’s construction footprint drops

At the end of 2025, Washington, D.C., had only 687,967 square feet of office space under construction, trailing behind most of the gateway markets. Only Seattle (252,963 square feet) and Chicago (571,576 square feet) fared worse.

Boston (4.4 million square feet) remained in the spotlight, followed by Miami (1.2 million square feet). Washington, D.C.’s under-construction pipeline accounted for just 0.2 percent of its total office inventory, half the national threshold. When also taking into consideration projects in planning stages, this figure rose to (1.1 percent), but was still below the 1.7 percent U.S. average.

At the beginning of last year, HITT Contracting started construction on a new headquarters building spanning 270,000 square feet in Falls Church, Va. Rushmark Properties owns the six-story development set to come online early next year.

In terms of office completions, only four properties totaling 734,538 square feet came online, accounting for 0.2 percent of the metro’s stock. Deliveries dropped more than 73 percent year-over-year.

In the first quarter of 2025, Skanska delivered the George Mason University Life Sciences and Engineering Building on the Prince William County Science and Technology Campus. The 132,000-square-foot, four-story life science building is close to GMU’s Institute for Advanced Biomedical Research.

D.C. office vacancy rises, despite national average decline

Washington, D.C.’s office vacancy rate at the end of 2025 clocked in at 19.7 percent, increasing 120 basis points year-over-year. This figure was above the 18.4 percent national average, which dropped 140 basis points from December 2024.

Last year, The Federal Bureau of Investigation decided to keep its headquarters in Washington, D.C. The agency will move a few blocks away, from J. Edgar Hoover Building to the Ronald Reagan Building and International Trade Center. The 3.1 million-square-foot property was built in 1998.

Other major leases include Milbank’s move to more than 64,000 square feet at 1101 New York Ave. NW, a 379,329-square-foot building. Oxford Properties and Norges Bank Investment Management own the LEED Platinum-certified mid-rise.

Additionally, the metro’s average listing rates at the end of December declined 2.8 percent year-over year to $40.27. Manhattan ($68.36), San Francisco ($63.15) and Miami ($55.39) posted the highest rates, while Chicago ($28.31) was once again at the opposite pole.

Coworking inventory below national figures

Washington, D.C.’s shared space inventory at the end of 2025 almost reached 7.4 million square feet across 310 locations, according to CoworkingCafe. This mirrors national coworking industry trends that show demand shifting toward flexible space models.

The market’s figures accounted for 1.9 percent of its total leasable office stock, 30 basis points below the national average. The District’s share was also below all gateway metros. Miami (4.0 percent) ranked first in the U.S., followed by Chicago (2.7 percent) and Manhattan (2.5 percent).

Last year, The Malin opened its first Washington, D.C., location, spanning 20,400 square feet. The space is the company’s 10th U.S. coworking location. The two-floor space is at The Marshall B. Coyne building, at 1156 15th St. NW.

Additionally, Carr Workplaces opened another shared space location in Arlington, Va. The location is part of Comstock Cos.’ Hartford Building and spans 26,331 square feet. At the end of 2025, the company had more than 287,000 square feet of coworking space across the metro.