All of this new supply in the aggregate, Yitzie Sommer, senior manager for research services, national office and industrial properties group tells GlobeSt.com, will have the inevitable impact: a decline in leasing activity. "The truth is, we haven't seen a tremendous decline in leasing activity--in Q3, for instance, it was down by a little bit. But when you are adding in more properties to the market, the net absorption number will look worse." It will take several quarters to work through the supply, he adds, despite the strong presence of the federal government in the market.

Vacancy in the Washington, DC metro area is forecast to end the year at 9.7%, the report finds, while asking rents are expected to increase 6% to $35.08 per sf. Effective rents are expected to gain 6.6% to $31.11 per sf.

Don't expect to see these new buildings trading at any great rate though. More conservative underwriting will lead transaction velocity to recede from the high levels attained in recent years, Ramon Kochavi, regional manager of the Washington, DCoffice of Marcus & Millichap says. "In the meantime, prices will rise at a more measured pace." According to the report, the median price of class A assets rose 3% during the last 12 months to $300 per sf.