In spite of being one of the most attractive cities in the U.S. for office investors, Washington D.C.,’s leasing market continues to drag. The city saw a number of huge office trades in the second quarter, such as Morgan Stanley’s acquisition of 801 17th Street NW, which set a new record high on a price-per-square-foot basis. And yet, the CBD’s vacancy rate is still more than 12.5% and absorption for the quarter was slightly negative, at 0.1%, according to research from two brokerage firms. In a market where healthy absorption is about one million square feet per year, only about 200,000 feet came off the market in the first six months.

Leasing brokers attribute the continued lag to lack....

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