A tale of two cities: The epic saga of supply vs. demand in Washington DC's commercial real estate market

The Washington DC metro, specifically its office market, is generally associated with strength in times of peril, boosted by increased government spending which generally translates to elevated office leasing in the years following the downturn.  

It can be observed that during the dot-com bubble and the great recession in 2001-02 and 2008-09 respectively, that new deliveries far exceeded tenant demand (net absorption). However, in the two years following each, absorption out-paced new construction, and vacancy fell, sometimes drastically.

However, the current situation is unprecedented, with cyclical economic issues colliding with structural issues as it relates to office utilization in a post-pandemic working world. The DC metro region has had a looming issue since the 2008 recession, with vacancy reaching double digits, and never dipping below that threshold since.