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Northern Virginia Office Report Q4 2019

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Market News

  • Three of the top five deals during the quarter were in the Reston submarket. The largest Reston deal was for 207,000 square feet, which was ICF’s prelease of 1902 Reston Metro Plaza. They will occupy the entire building upon completion. Neustar also preleased another building in the same development during the quarter. They will occupy 97,449 square feet at 1906 Reston Metro Plaza when it is delivered.
  • Amazon plans to break ground on its 2.1 million-square-foot HQ2 campus during the first half of 2020 after approval from Arlington county. The development is expected to be completed in 2023.

Demand & Supply

  • Demand for office space grew by 801,890 square feet during the last quarter of 2019. It marked the ninth consecutive quarter of positive net absorption and brought the 2019 total to 2.89 million square feet.
  • Demand for Class A space continued to be positive with 148,979 square feet absorbed during the fourth quarter. Demand was highest for Class B product, with 483,282 square feet taken off the market.
  • 11011 Sunset Hills Road delivered in the Reston, where General Dynamics moved in and occupies the entire building.

Vacancy & Rental Rates

  • As a result of increased demand, the vacancy rate fell from 16.3 percent to 16.0 percent during the quarter. The vacancy rate stood at 17.1 percent a year ago.
  • The Class A vacancy rate remained at 16.8 percent, while the Class B vacancy rates decreased from 18.0 percent to 17.4 percent.
  • During the quarter, the direct average asking rental rate decreased $0.16 to $33.16 per square foot. This is an increase of $0.41 from the same time last year when the rate was $32.75 per square foot.
  • The Class A direct average asking rate increased $0.05 during the quarter to end at $37.30 per square foot. A $0.07 decline was observed in the combined Class B & C rental rate to end the quarter at $29.57 per square foot.

Arlington Skyline

Northern Virginia Office Report Q4 2019

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