Northern Virginia Town and City Submarkets Q1 2019

fairfax county city-town submarkets

Fairfax City Submarket Q1 2019

Fairfax City is the main hub for the Fairfax County government and George Mason University (GMU). In fact, aside from these two, there is only one other tenant in the submarket that occupies more than 50,000 SF. The Fairfax County government and GMU’s presence have helped stabilize Fairfax City’s office vacancies, which remain below the metro average despite negative absorption that drove significant mid-cycle increases.

What the submarket lacks in Metro access it makes up for in affordability and connectivity to other areas of the DMV. Office rents here are lower than in both Tysons Corner and Reston, but like in many suburban submarkets, growth has been inconsistent. Still, Fairfax City has seen a steady increase in inventory turnover since 2013, with an average of 20 deals closing each year. 

Falls Church Submarket Q1 2019

Much of Falls Church’s office space is in older buildings, with 3 Star or lower inventory making up over 80% of stock. Nonetheless, demand was solid from 2014–16, although it lost momentum in 2017 and through the first three quarters of 2018. Absorption went sharply negative in 18Q2 due to move-outs at the Falls Church Corporate Center. Vacancies expanded dramatically as a result, although they remain below the metro average. The submarket’s biggest challenge is competition from Tysons Corner, where 4 & 5 Star product comprises about 60% of inventory, making it much more likely to attract the large users that were the primary drivers of metro-wide absorption in 2017. Rents in Tysons Corner are 40% higher (or more) than they are here, but that submarket appeals to many tenants and benefits from the flight-to-quality trend. However, Falls Church provides an alternative to tenants who can’t afford office space in Tysons but want Metro accessibility. Given the inventory mix, it’s no surprise that most transaction close for less than $1 million. The primary market movers are local investors, and annual volume typically stays below $10 million. 

Great Falls Submarket Q1 2019

McLean Submarket Q1 2019

Oakton Submarket Q1 2019

Vienna Submarket Q1 2019

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