DC Office Rental Rate Back on Earth Again

by Kamran Abdi
It was just earlier this year a report came out that positioned DC as the most expensive place for office rental in the nation even topping the NYC. According to a new quarterly report from Cushman & Wakefield, the office market in the District’s central business district is showing signs of stabilizing, and rental rates last quarter were down from a year ago.

Average rents in Washington’s central business district were $47.07 per square foot, the second-highest in the nation, topped only by Midtown New York at $61.93. Average rents in the first quarter in D.C. were down 7.5 percent from a year earlier.

The report also indicated higher vacancy rates for the District, pushing it to the tenth lowest position in the quarterly report’s ranking of top U.S. markets.

• Midtown South Manhattan: 9.9% (-0.1%)
• Downtown Manhattan: 10.0% (+0.3%)
• New Haven, Conn.: 10.9% (-0.3%)
• Houston: 12.4% (+1.0%)
• Midtown Manhattan: 12.6% (+0.6%)
• San Francisco: 12.6% (-0.3%)
• Portland: 12.8%(+0.6%)
• Philadelphia: 12.8% (+1.3%)
• Boston: 13.0% (+1.0%)
• District: 14.5% (+0.2%)

The report notes market conditions will improve throughout the year, led by government job creation- OF COURSE   But it also said demand gains will still trail supply coming online this year, and as a result vacancy rates will continue a gradual climb in Washington.