Nonprofits Retreating From DC Office Market

Nonprofits, typically a solid bet for the Washington, D.C. office market, pulled back last year.

Nonprofits leased just 1.3 million square feet in the metropolitan area last year, according to CBRE data reported by Bisnow. That represented an 18 percent decline from the historic average and the second-lowest total in the last 10 years.

The leasing volume of organizations commonly perceived as nonprofits may have been even lower, as CBRE’s definition of the group includes trade associations and think tanks. Nonprofits make up 7 percent of the area’s office market, though they accounted for 12 percent of the area’s leasing volume last year, showing the depths of D.C.’s office struggles.

The diminishing might of nonprofits in the office market links to the oft-cited reasons: financial pressures and the rise of remote work post-pandemic. Mission-driven organizations in particular are finding that they don’t need a lot of space for employees to do their jobs.

Nonprofit organizations were also more likely than other sectors in the market to relocate; those made up 62 percent of all leasing activity for the category last year.

This month, hunger relief organization Save Our Strength consolidated by 19,000 square feet as it relocated to a recently redeveloped property. Children’s Law Center, which advocates on behalf of the district’s youth, downsized by 5,000 square feet.

Crowdfunding platform GlobalGiving is almost completely remote and has no plans for a return-to-office requirement, chief executive officer Victoria Vrana told The Chronicle of Philanthropy. The organization is looking for a sublease tenant for its 16,000-square-foot office at One Thomas Circle.

It’s not only leases, either: at least 11 nonprofits in the area have space up for sale. Legal Services Corporation, which provides civil legal aid, is looking to sell 70,000 square feet in Georgetown. The American Center for Physics sold a 107,000-square-foot property in College Park for $35.5 million.

Nonprofits are suddenly dealing with an additional financial obstacle after the Trump administration froze nearly all federal grants and loans on Monday night, NBC News reported, leading some to quickly be cut off. Legal challenges are already underway against the order.

— Holden Walter-Warner