One year of pandemic fallout brings record-low leasing and record-high availability to DC
The one-year anniversary of the COVID-19 pandemic has come and gone, and its impact continues to stifle the Washington, DC office market. Just 1.2 million square feet (msf) were leased in Q1 marking the lowest quarterly total on record. As vaccination becomes more widespread, companies are beginning to think about real estate plans again which may result in an eventual bounce back in demand later in the year. As tenants wait to lease space, lease less space, or return space to market, availability increased over the quarter from 19.4% to 20.4% – the highest rate the market has seen in at least three decades—and represents a dramatic rise from pre-pandemic levels when it was at an already-high 16.2%. In addition, sublease inventory has been on the rise and now accounts for 13.2% of total availability with the specter of additional sublease space potentially coming to market as tenants make decisions about space that has sat vacant over the last year.