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DC multifamily market faces financing concerns, construction slowdown heading into 2026

Office conversions, boutique developments emerge as more economical options for projects, market players say
Willco redeveloped the Peace Corps' former headquarters in downtown Washington into the 163-unit Elle Apartments in 2024. (Anna Cheng/CoStar)
Willco redeveloped the Peace Corps' former headquarters in downtown Washington into the 163-unit Elle Apartments in 2024. (Anna Cheng/CoStar)
CoStar Analytics
December 8, 2025 | 9:01 P.M.

Washington, D.C.'s multifamily sector is entering 2026 with a mix of resilience and restraint. While fundamentals like occupancy remain stable, developers and investors are contending with persistent regulatory hurdles, a sharp slowdown in new construction and a cautious capital environment that is reshaping strategies across the region.

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News | DC multifamily market faces financing concerns, construction slowdown heading into 2026