D.C.’s Trophy Office Leasing Picks Up. The Rest, Not So Much.

Washington, D.C.’s office market recovery is becoming more concentrated within the cream of its crop.

D.C. office leasing reached roughly 2 million square feet during the second quarter, the highest quarterly volume since 2024, according to Savills. Law firms alone leased about 600,000 square feet, and some large occupiers completed transactions, but the broader market remains hamstrung by empty office space and declining federal leasing.

Office tenants are making long-term commitments in D.C. but they’re almost always choosing trophy assets, focusing on new or recently renovated buildings. Availability for D.C.’s Class A buildings was at 10 percent after the second quarter while the city’s overall availability rate increased to 24.2 percent. That increase comes despite 4 millions square feet of space coming off the market the past year from conversions.

Similarly, overall asking rents increased 2.9 percent compared to the second quarter of 2025, while Class A rents rose more than 5 percent over the same period to $62.29 per square foot per year.

Law firm White & Case signed the quarter’s largest lease in a move to nearly 196,000 square feet at 1701 Pennsylvania Avenue NW, while firms Steptoe, O’Melveny and Wilkinson Barker Knauer committed to long-term renewals.

Tech companies also added to the uptick. Palantir renewed and expanded to 150,000 square feet in Georgetown, while Thomson Reuters signed for almost 33,000 square feet in the East End. Savills expects leasing momentum to carry into the second half of the year with deals nearing completion, including leases by Google and the U.S. Navy.

Savills also said it expects office-to-residential conversion projects to continue to reduce inventory, particularly while the construction pipeline is low.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.