Washington D.C. leasing velocity slows at year-end

At the close of 2023, the Washington D.C. office leasing market witnessed a cooling in activity with less than 1.0 million square feet (ms) of executed leases reported in the fourth quarter. This is down from the 2.2 msf reported for the third quarter. For the full year, however, total leasing activity of 5.4 msf was slightly up from 5.2 msf reported in 2022 but this is still well below the 8.0 msf and 7.3 msf reported in 2021 and 2020, respectively. As a comparison in 2019, prior to the COVID-19 pandemic, annual leasing activity was 9.6 msf. The largest lease in Q4 2023 was executed by The Smithsonian, which leased 133,000 square feet (sf) at 750 9th Street NW. Office leasing is expected to be lower amid continued economic uncertainty. As a result, the Washington D.C. office market will remain tenant-favorable for the foreseeable future.

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