With about 10 million SF of inventory, Old Town Alexandria is a relatively large office submarket, the core of which is along either North Washington, King, or Duke streets. This submarket has many historic buildings and sites, which restricts new development, particularly in the heart of Old Town. Newer, modern office construction has been on the submarket’s periphery, either along the river, north of Pendleton Street, or on the west end of King and Duke streets, near the King Street Metro station.
Office construction has been sparse since the recession, with the last delivery in 2010. On the bright side, the lack of construction has helped vacancies decline from their peak in 2011 and kept them well below the metro average. Despite relatively low vacancies, landlords have struggled to increase rents, which decreased in 2016 and 2017. Rents have shown signs of life this year, but it remains to be seen if this holds, especially given the weak absorption of late. Sales suffered for several years as well. After blockbuster year in 2014, volume dropped for three subsequent years, failing to break $100 million in both 2016 and 2017. Sales have come back strongly this year, though—as of mid-October, more than $230 million in volume had recorded.