Washington DC Office Figures Q3 2026

Washington, D.C.’s office market continued its recovery in Q3, with 360,154 sq. ft. of positive absorption driving a 40-basis point (bps) decline in overall vacancy. Private sector activity, including significant legal and technology transactions, drove demand and occupancy gain. Notably, with Prime (Trophy) vacancy at just 8.3%, more activity has begun to spill over into other Class A properties, which absorbed 218,400 sq. ft. during the quarter. 

Market performance remains sharply bifurcated between the public and private sectors. GSA leasing activity remains well below historical averages, and second-generation government space still accounts for a significant share of overall market vacancy. At the same time, the private sector is on pace to again exceed it’s 10-year historical leasing average, and a dearth of quality options for private sector tenants in the downtown core is beginning to put upwards pressure on rental rates at the top of the market. The shortage of available Prime space is also pushing some large private sector tenants to consider new developments, although elevated construction costs and a lack of developable sites remain significant roadblocks to those projects.