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Market Report

Washington DC Industrial Market Report

Midyear 2023

Unprecedented Build Levels are Expected to Win
Tug-Of-War Against Tenant Demand

Competition for space remains strong. Entering the second quarter, vacancy in the metro was still near a record low at 4.9 percent. The rate managed to hold relatively steady during the preceding year, despite the addition of more than 5.3 million square feet of new supply. This dynamic highlights the competitiveness that exists for well-located space in the market’s industrial sector. Northern Virginia garnered the lion’s share of leasing activity during this span, particularly in Greater Fredericksburg, the Dulles Corridor and Manassas-I-66. Here, firms like Iron Mountain, LaserShip, Barrons Lumber, GXO and 1-800-Pack-Rat each recently committed to spaces exceeding 100,000 square feet. Elsewhere, robust space demand in Lanham-Landover-Bowie, Prince George’s County and Frederick County spearheaded annual rent gains exceeding 20 percent across the Suburban Maryland region in March of this year.

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