Northern Virginia’s Town & City Submarkets Q2 2019

Northern Virginia’s Town & City submarkets are a microcosm of the larger DC metro area. They can be defined by town or city limits or by the commercial area within a more suburban submarket. Tysons Corner encompasses parts of Vienna and McLean at least as far as the post office is concerned, but these submarkets are unique to themselves with differing factors influencing supply, demand, and more. Whether it’s because of proximity to their home, the traditionally lower rental rates, or some other reason, for many of the tenants in these submarkets, being anywhere else is unthinkable.

fairfax city courthouse 3x4.jpg

Fairfax City

  • RBA: 5,108,175 SF
  • Vacancy Rate: 11.5%
  • 12 Month Net Absorption: 3,600 SF
  • Average Asking Rent: $24.76
  • 12 Month Rent Growth: 0.5%

The Fairfax County government and George Mason University are the major tenants and stabilizing forces in Fairfax City; however, Zeta Associates is the submarket’s largest tenant and occupies over 120,000 SF. Fairfax City is home to many small tenants such as doctors, banks, and financial advisors that cater to the surrounding suburban population. There are many small law firms as well due to the presence of the Fairfax County Courthouse being located in old/downtown Fairfax City. The median new lease in 2018 was only slightly north of 4,000 SF. Despite its lack of metro access, Fairfax City’s vacancy rate is below the metro average due mainly to its affordable rents (among the lowest in the metro area) and central location in Northern Virginia.

oakton atandt

Oakton

  • RBA: 1,616,074 SF
  • Vacancy Rate: 17.1%
  • 12 Month Net Absorption: (25,100 SF)
  • Average Asking Rent: $27.21
  • 12 Month Rent Growth: 2.3%

Oakton has always been a bit of a mystery to me. The submarket is centrally and conveniently located; bordering the Fairfax City and Town of Vienna submarkets and with most of its inventory located at the intersection of 123 and I-66. The submarket is home to AT&T’s Government Solutions main office and about 335,000 SF of 4 & 5 Star properties. Despite this fact, there are no new deliveries in the foreseeable future and Oakton seems content to remain a sleepy submarket that is generally overlooked by major tenants.

mclean1 3x4

McLean

  • RBA: 1,699,117 SF
  • Vacancy Rate: 11%
  • 12 Month Net Absorption: (72,100 SF)
  • Average Asking Rent: $31.84
  • 12 Month Rent Growth: 0.6%

McLean is interesting because it’s one of the oldest and most mature submarkets in Northern Virginia. I remember my father started in the banking business in McLean. This submarket is home to many diplomats, businessmen, members of Congress, and high-ranking government officials and is just across the Chain Bridge from Washington, DC. McLean is the 3rd wealthiest “city” in the country and without any new construction in years or deliveries in sight, this submarket has vacancy below and rates above the metro average.

City of Falls Church

  • RBA: 2,831,818 SF
  • Vacancy Rate: 13.3%
  • 12 Month Net Absorption: (104,000 SF)
  • Average Asking Rent: $25.42
  • 12 Month Rent Growth: 1.6%

Great Falls

  • RBA: 273,966 SF
  • Vacancy Rate: 6.9%
  • 12 Month Net Absorption: (6,500 SF)
  • Average Asking Rent: $25.56
  • 12 Month Rent Growth: 2.7%

Town of Vienna

  • RBA: 2,005,964 SF
  • Vacancy Rate: 9.1%
  • 12 Month Net Absorption: (43,200 SF)
  • Average Asking Rent: $28.42
  • 12 Month Rent Growth: 1.2%

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s