Mid-Atlantic Research Reflections 2024: Federal Government

The federal government leases more than 43 million sq. ft. across the Washington, D.C. Metro, making it the largest office occupier in the region. Through November, the federal government has leased 2.3 million sq. ft. in 2024, accounting for 17% of all leasing activity in the region. While this represents a 33% decline year-over-year and a 52% decline from the long-term annual average (see Figure 1), the downward trend is consistent with expectations.

Metro ridership at the L’Enfant Plaza and Federal Center stations in Southwest D.C., which are adjacent to many federal agencies and should be indicative of federal employee return-to-office, is still less than 50% of pre-pandemic levels. While this suggests less in-person work, return-to-office policies and enforcement vary by agency.

Persistent telework has expedited federal right-sizing, which had begun years before the pandemic. Overall, the federal leased footprint across the D.C. Metro has decreased by 14.4 million sq. ft. since its peak at 57.5 million sq. ft. in 2014. Year-to-date, the federal government has posted 403,000 sq. ft. of negative net absorption across the metro.

In October 2024, the U.S. Securities and Exchange Commission (SEC) terminated its 1.2 million sq. ft. lease for a new build-to-suit headquarters at 64 New York Avenue NE in NoMa, as the parties could not come to a final agreement to commence construction. For now, the SEC will maintain its current headquarters at Station Place in NoMa, where the agency signed a five-year renewal for 1.0 million sq. ft. in Fall 2023.