DC office dynamics hold steady over the quarter with availability stabilizing and leasing closer to quarterly norms
Availability surged for seven straight quarters through the pandemic, but it has finally leveled off in Q3, holding flat quarter over quarter. In Q1 2020, availability was 16.6% and has now reached 21.1% – holding flat when compared to last quarter (21.1%). This was partially helped by sublease availability reducing. Sublease availability hit a high at the end of 2020 with 3.4 million square feet (msf) on the market which, as of Q3 2021, has fallen to 3.0 msf as many organizations have been successful at subleasing their space or have taken it off the market as they decide to re-occupy it. Leasing has picked up substantially, totaling 3.0 msf and is above the five-year quarterly average of 2.2 msf. The government was the driving force behind demand with a massive 1.2-msf lease for the Securities and Exchange Commission and several significant renewals. While the market may not be deteriorating at the rate it was earlier in the year, it remains exceptionally soft, and it will take time and substantial leasing activity to reverse the pandemic’s effects.