Multifamily rents in Washington, D.C., have picked up since June 2019, after several years of below-trend growth caused a supply surplus. Rents were up 3.5 percent year-over-year through October, 30 basis points above the national rate. Meanwhile, occupancy improved 10 basis points over 12 months, reaching 95.6 percent as of September. The rapid addition of high-paying jobs, coupled with strong population growth, is likely to support D.C.’s economic expansion and maintain its advantage in the Mid-Atlantic region.
Employment growth was led by leisure and hospitality, which gained 17,100 of the 38,800 jobs added in the 12 months ending in September. Roughly 24 million tourists visited the District in 2018, a record number for the ninth consecutive year. And with the city’s population expanding, developers continue to build. Several large mixed-use projects are underway, including the $640 million redevelopment of the former Fannie Mae headquarters, Boston Properties’ Reston Gateway, Hoffman-Madison Waterfront’s multibillion dollar The Wharf, and Brookfield Properties’ $1.4 billion Halley Rise.
Investor interest tempered slightly, but it is still likely to surpass the $4.5 billion mark for all of 2019, making it the third-best year for transaction volume this cycle. Despite the metro’s solid development pipeline, we expect rents to continue rising, albeit at a slower pace.