Much of Reston’s office demand has been driven by public transit, specifically the creation of Metrorail’s Silver Line and its coming expansion. This, paired with relatively affordable rents, has sparked interest from tenants and caused vacancies to fall below the metro average. Rent gains have occurred as a result, increasing by almost 3% per year on average from 2014-16 before slowing last year. But despite the uptick in vacancy, rents have continued to rise this year, increasing by about 2.5% as of early December. Sales hit a record high in 2014 and have, unsurprisingly, declined since. But 2017 was a particularly slow year, with only about $10 million in volume generated by eight trades. Sales this year have been strong, though, and as of early December volume had surpassed $285 million.
The tenant makeup in Reston is diverse, a major reason the submarket outperforms, but professional services stands out (especially IT and software companies), with finance, healthcare, and information publishing close behind. Major tenants include Fannie Mae and Sallie Mae, Verisign, the Defense Intelligence Agency, Oracle, and most recently, Noblis ESI. Boston Properties is one of the leading owners, with a 17% share, including all of the Reston Town Center, a mixed-use development that includes over 2 million SF of office, retail, and residential space. The Center is considered one of the submarket’s trophy assets, helping it command a significant rent premium.