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Improving Fundamentals Offer Cautious Optimism for Northern Virginia Office Market
The Northern Virginia office market showed encouraging early signs of improvement in the third quarter, following four quarters of disrupted activity as a result of the pandemic, according to the CBRE Northern Virginia Office Market View for Q3 2021.
Gross leasing activity held steady over the prior quarter to end Q3 at 2.1 million square feet. While this is still down 22 percent from the 2018-2019 quarterly average, it was a marked improvement from the second half of 2020 and Q1 2021 with an average leasing volume of 1.7 million square feet. Nonetheless, the Delta variant surge dampened touring activity.
As leasing activity stabilized, net occupancy loss decelerated considerably as well, with only 47,000 square feet of negative absorption in Q3. Despite the improving metrics, overall vacancy rose 10 basis points over the prior quarter to 20.6 percent, approaching the market’s peak vacancy level of 20.9 percent from Q1 2018.
- ◦Economy
