Washington, D.C.’s aerospace and defense sector continues to play a pivotal role in driving the region’s office leasing activity, according to JLL’s Q1 2025 Aerospace and Defense Industry Insights report. The sector remains a major engine for both job creation and sustained demand in the commercial real estate market.
The report notes a significant increase in federal spending on facilities-related services, which has grown by 12% since 2020. Additionally, lease renewals within the aerospace and defense industry have been steadily rising since 2019, underlining the sector’s long-term real estate commitments and stability.
In 2024, the total aerospace and defense leasing volume reached 5.7 million square feet—marking the sector’s highest leasing activity since 2021. While Virginia and Texas boast the highest number of defense contractor headquarters, the Washington, D.C. region remains at the forefront of office leasing activity for aerospace and defense companies.
This surge in private-sector leasing comes at a time when federal agencies, such as the Department of Government Efficiency (DOGE), are scaling back office footprints. DOGE has recently terminated more than 2.3 million square feet of federal leases across the U.S. in a broader push for governmental cost savings.
Despite federal downsizing, the private aerospace and defense industry continues to strengthen its presence in the commercial real estate landscape, reaffirming Washington, D.C.’s leadership position in the sector.
