Northern Virginia Office Market Report

Northern Virginia Office Market Report

Net absorption measured 312,851 square feet in the fourth quarter of 2022, offsetting the occupancy losses incurred earlier in the year. Year-to-date absorption measured 209,689 square feet, marking the first time since the start of the pandemic that Northern Virginia ended the year with positive absorption. Positive quarterly occupancy resulted in a slight reduction in vacancy, which decreased 10 basis points from the last quarter, to 21.0%. However, overall vacancy remained steady during 2022, increasing only 50 basis points over the last 12 months. Average asking rents appreciated 1.7% over the last 12 months, reaching a record high of $35.08/SF. Leasing activity remained relatively strong during the fourth quarter, however, there is a continued lack of equitable distribution of this activity across all Northern Virginia’s submarkets. Leasing activity was supported by the US Patent and Trademark Office (PTO) renewal of 1.6 million square feet, and Boeing’s headquarters relocation to Arlington.