Washington DC (DMV) Warehouse Market Report 2025: Your Guide to Capital Region Industrial Space
Last Updated: January 2026
If you’re looking for warehouse space in the Washington DC metro area, you’re navigating one of the most unique industrial markets in the country. The DMV – DC, Maryland, and Virginia – isn’t just about government contracts and defense logistics. It’s become ground zero for the global data center industry while maintaining strong traditional warehouse fundamentals for a population that grew faster than the national average post-pandemic.
Let me walk you through what’s really happening in this market, from the Northern Virginia tech corridor to the Baltimore logistics belt. Whether you’re a small business serving the federal sector or a broker helping clients find distribution space in the nation’s capital region, here’s what you need to know.
Key Takeaways
- The DMV is three distinct markets: Northern Virginia commands $16-17+/sq ft (data center competition); Suburban Maryland offers value at $7.52-8.72/sq ft; Baltimore delivers larger footprints at $5-12/sq ft
- Northern Virginia’s data center market is larger than the next five U.S. markets combined—traditional warehouse users increasingly compete for land, power, and infrastructure
- Amazon alone has invested $35 billion in Virginia data centers with another $35 billion planned by 2040, reshaping industrial land economics
- Small-bay spaces under 100,000 sq ft are 96% occupied nationally, commanding $2-3/sq ft premiums—a key opportunity for smaller users
- Prince William County emerges as Northern Virginia’s growth alternative with more available power than Loudoun County and $293.7M in data center tax revenue (2024)
Why the DMV is a Market Unlike Any Other
$16.46
NoVA Avg Rate/SF
$7.52
MD Warehouse Rate/SF
6.4M
Metro Population
3.39M
Nonfarm Employment
The numbers tell part of the story, but here’s what makes the DMV exceptional: you’re really dealing with three distinct markets under one regional umbrella. Northern Virginia commands premium rates driven by data center demand and Dulles Airport proximity. Suburban Maryland offers more traditional warehouse value. And the District itself has limited industrial inventory but unique last-mile opportunities.
The region’s 2.8% population growth between 2020 and 2024—despite pandemic-era outmigration—demonstrates the DMV’s resilience. International migration now drives growth, with all 387 U.S. metro areas seeing positive net international migration between 2023 and 2024.
The Submarkets That Matter Most
Northern Virginia / Dulles Corridor
This is the premium industrial submarket, and increasingly, it’s data center territory. Northern Virginia’s data center market is larger than the next five U.S. markets combined—and larger than the next four global markets combined.
Northern Virginia commands average asking rates of $16.46-19.00/sq ft NNN, with premium distribution locations at $17+/sq ft. Proximity to Dulles International Airport supports global air freight, with excellent highway connectivity via I-66, Route 28, and I-495.
Demand drivers include 1,500 megawatts of data center capacity under construction and 2,900 megawatts in earlier development stages. Amazon has invested $35 billion in Virginia data centers (2011-2020) with another $35 billion planned by 2040. DB Schenker recently signed the largest Q1 2025 lease at Prologis West Distribution Center.
Important
Competition for industrial land in Northern Virginia has intensified dramatically. Amazon paid $700 million for a 270-acre site in western Prince William County. In Loudoun County, a developer paid $615 million for just 97 acres—the county’s first property sale exceeding $6 million per acre. Traditional warehouse users may need to explore alternative submarkets.
Prince William County
The fastest-growing Northern Virginia locality for industrial development, Prince William benefits from more available power than Loudoun County (which faces severe constraints), more affordable land prices, low latency connectivity, and access to the I-95 corridor.
The county currently has 44 data center buildings totaling 12 million sq ft, with 15 more under construction adding 4 million sq ft. The proposed Dulles South Innovation Center would add 1,930 acres of industrial land. Prince William collected $293.7 million in data center tax revenue in 2024—more than 1.5 times the amount from two years prior.
Suburban Maryland
Maryland offers the DMV’s best value for traditional warehouse and distribution users not competing with data center demand.
| Product Type | Average Rate (Q3 2025) |
|---|---|
| Warehouse/Distribution | $7.52/sq ft |
| General Industrial | $8.72/sq ft |
| Flex Space | $11.79/sq ft |
Vacancy sits at 9.9% (up 60 bps YoY), providing more tenant-friendly conditions than Northern Virginia. Despite slight rent decreases year-over-year, rates remain near record highs.
Baltimore Corridor
For users needing larger footprints at lower costs, the Baltimore industrial market offers compelling value with strong highway access to both DC and the Northeast corridor.
Current conditions show vacancy at 8.1% (in line with the decade average of 7.7%). Average rates run $5-12/sq ft depending on product type, with the average across all types at $8.05/sq ft. Newer 2024-built properties command $21-22/sq ft. Notable recent activity includes CVC Distribution expanding to 11,000+ sq ft in the Bowie submarket.
Looking for warehouse space in Washington DC?
Browse DC Metro ListingsWhat Small Businesses Need to Know
The DMV’s unique position creates both opportunities and challenges for small warehouse users.
Your advantages in this market: Federal proximity matters if you serve government agencies, contractors, or the defense sector. The DMV isn’t a one-industry town despite federal presence, offering a diverse economy. Small-bay spaces under 100,000 sq ft are 96% occupied nationally, commanding $2-3/sq ft premiums. Transportation infrastructure includes multiple airports, railways, and freight hubs. The region boasts one of the country’s most educated workforces.
Watch out for: Data center competition in Northern Virginia may outbid you for land and power. Loudoun County faces severe power constraints while Prince William has more access. Potential DOGE-related federal workforce reductions could impact regional demand. Speculative construction is limited with 61% of the 3.6 million sq ft pipeline being build-to-suit (mostly data centers). Factor in notorious DC-area commute times for workforce access.
Pro Tip
If data center competition in Northern Virginia is pricing you out, pivot to Suburban Maryland or the Baltimore corridor. Maryland offers traditional warehouse economics at $7.52-8.72/sq ft with 9.9% vacancy providing tenant-friendly conditions—without competing against hyperscalers for land and power.
The Data Center Dynamic
You can’t understand this market without understanding how data centers are reshaping it.
Northern Virginia data center rents are climbing as vacancy rates remain near all-time lows. The industry invested $37 billion in Virginia over just the past two years. Prince William County’s PW Digital Gateway rezoning approved 2,000 acres for future data center development. Traditional warehouse users increasingly compete with data centers for land, power, and infrastructure.
What this means for warehouse users: Class A warehouse product remains in demand—as evidenced by DB Schenker’s major lease—but you need to be strategic about submarket selection. Maryland and the Baltimore corridor offer alternatives to the Northern Virginia data center competition.
Real Numbers from Real Deals
Rate Ranges by Submarket
| Submarket | Rate Range ($/sq ft/year) |
|---|---|
| Northern Virginia/Dulles Premium | $17-20+ |
| Northern Virginia Standard | $16-17 |
| Washington DC | ~$13 |
| Suburban Maryland | $7.52-11.79 |
| Baltimore Area | $5-12 (avg $8.05) |
| New Construction (2024+) | $21-22 |
Prologis Portfolio
Prologis maintains over 150 properties totaling 15+ million sq ft serving 300 customers across Maryland, DC, and Northern Virginia, with 1.5 million sq ft in the development pipeline.
Looking Ahead: What’s Coming in 2025-2026
The Good
Northern Virginia leasing is up 32% YTD through Q3 2025 versus the same period in 2024. Population growth continues at 1.4% annually, outpacing the national average. Minimal vacancy risk exists from speculative construction since most pipeline is build-to-suit. Infrastructure investments in transportation and power continue. Data center tax revenue provides municipalities with strong fiscal positions.
The Challenges
Capital flow concerns show DMV rolling 12-month investment volume fell 30%+ while national flows grew. Federal employment uncertainty from DOGE-related reductions could impact the regional economy. Power constraints affect Loudoun County particularly. Land costs soar at $6 million+ per acre in prime data center locations. National vacancy is projected to peak at 7.8% in 2026.
Note
Start your search 6-9 months out in the DMV—good spaces move quickly. Small-bay spaces under 100,000 sq ft are particularly competitive at 96% occupancy nationally. The limited speculative construction pipeline (61% build-to-suit) means fewer new options coming to market.
Making Your Move: Practical Next Steps
If You’re a Small Business Owner
Clarify your priorities first: Is it proximity to federal clients? Last-mile delivery capability? Cost efficiency? Consider Maryland if data center competition in NoVA is pricing you out. Act on small-bay opportunities—these spaces are 96% occupied and command premiums. Factor in power requirements since Northern Virginia may be challenging if you need heavy power. Explore the Baltimore corridor for larger, more affordable footprints. Start your search 6-9 months out as good spaces move quickly.
If You’re a Broker
Segment by use case: Federal and defense clients toward NoVA, cost-conscious clients toward Maryland. Highlight transportation assets including Dulles for air freight and I-95 for ground distribution. Educate clients on the data center dynamic—they need to understand market competition. Position Prince William County as the NoVA growth alternative. Connect clients with local economic development offices for incentive programs. Monitor federal policy for impacts on regional demand.
The Bottom Line
The DMV offers something no other market can: proximity to the federal government, world-class transportation infrastructure, and the nation’s largest data center ecosystem. For traditional warehouse users, this creates both opportunities and competition.
Northern Virginia commands premium rates but faces unique constraints. Maryland and Baltimore offer more traditional warehouse economics. The key is matching your specific needs—federal proximity, last-mile capability, cost efficiency, or distribution reach—to the right submarket.
The combination of educated workforce, diverse economy, and population growth makes the DMV fundamentally sound. But you need to be strategic. This isn’t a market where you can simply pick a location and sign a lease. Understanding the data center dynamic, power availability, and submarket distinctions will determine your success.
For the right user, the Capital Region remains one of America’s most compelling industrial markets.
Ready to find warehouse space in Washington DC?
Browse available listings across the DMV—from Northern Virginia premium to Maryland value options.
Search DC Metro Warehouse SpaceFrequently Asked Questions
What is the average warehouse lease rate in the Washington DC metro?
Rates vary dramatically by submarket. Northern Virginia commands $16.46-17+/sq ft NNN due to data center competition. Suburban Maryland offers traditional warehouse space at $7.52/sq ft. Washington DC proper averages around $13/sq ft. The Baltimore corridor provides the most value at $5-12/sq ft depending on product type.
How are data centers affecting warehouse availability in Northern Virginia?
Data centers have fundamentally reshaped Northern Virginia’s industrial market. The region’s data center market is larger than the next five U.S. markets combined. Traditional warehouse users now compete with hyperscalers for land and power—Amazon paid $700 million for 270 acres in Prince William County. Consider Maryland or Baltimore if NoVA data center competition is pricing you out.
Is Suburban Maryland a good alternative to Northern Virginia?
Yes—Maryland offers the DMV’s best value for traditional warehouse users. Rates run $7.52-8.72/sq ft for warehouse and general industrial space versus $16-17+/sq ft in Northern Virginia. Vacancy at 9.9% provides tenant-friendly conditions. You avoid data center competition while maintaining access to the DC metro workforce and transportation infrastructure.
What makes Prince William County attractive for industrial users?
Prince William County is Northern Virginia’s fastest-growing industrial locality. It offers more available power than Loudoun County (which faces severe constraints), more affordable land prices, and I-95 corridor access. The county collected $293.7 million in data center tax revenue in 2024, indicating strong infrastructure investment. The proposed Dulles South Innovation Center would add 1,930 acres of industrial land.
How competitive is small-bay warehouse space in the DMV?
Small-bay spaces under 100,000 sq ft are highly competitive—96% occupied nationally and commanding $2-3/sq ft premiums over larger spaces. Start your search 6-9 months out. The limited speculative construction pipeline (61% is build-to-suit, mostly data centers) means fewer new options coming to market for traditional warehouse users.
What should federal contractors consider when choosing warehouse location?
Federal proximity matters for contractors serving government agencies and defense sector clients. Northern Virginia offers the closest access to federal facilities and decision-makers, but at premium rates ($16-17+/sq ft). Weigh the federal proximity benefit against Maryland’s cost savings ($7.52-8.72/sq ft). Also monitor DOGE-related federal workforce policy changes that could impact regional demand.
