RBA: 20,439,919 SF
Vacancy Rate: 12.5%
12 Month Net Absorption: (81,500 SF)
Average Asking Rent: $33.05
12 Month Rent Growth: 0.3%
Reston is just behind Tysons Corner when it comes to office submarkets in Northern Virginia. The last stop of Phase-1 of the Silver Line is Wiehle Ave; the gateway to Reston. With the 2nd phase delivering in 2020 and the next stop being at Reston Town Center we can expect stable fundamentals despite new supply. As is the case in many submarket in the DC metro area, 3-Star and 1 & 2 Star properties underperform; adversely impacting submarket metrics.
The average asking rate is $33.05/SF, but 4 & 5-Star properties’ average rent is $36.93/SF. While vacancy rates for 3-Star properties is slightly lower, it does not tell the whole story. The higher vacancy in 4 & 5-Star properties is the result of new deliveries and increases in supply. The past quarter saw a 17,883 SF to (11,312 SF) difference in net absorption between the two, and 1,682,457 SF of 4 & 5-Star space is currently under construction to satisfy demand.
Reston is an attractive submarket for many reasons. The Silver Line is number one. Reston Town Center is number two. Proximity to Dulles International Airport is number three. The fourth reason is an extension of the first 3: the number of major tenants such as Oracle, Fannie Mae, Sallie Mae, the Defense Intelligence Agency, etc. which attract other/smaller tenants that benefit from proximity to these economic engines. Reston Hospital may be number six. The healthcare industry is stable and primed for continued growth.
The Silver Line may be numero uno, but Reston Town Center has always been the shining jewel of Reston and commands rents over 20% higher than the rest of the submarket. Boston Properties is the majority owner and made the regrettable and short-sighted decision to begin charging for parking. After law suits from tenants and a decline in overall, retail revenue due to patrons boycotting the center, they changed the policy to allow for 2 free hours of parking, but you have to download their app, which is an obvious data mining ploy. I digress, Reston Town Center is still pretty awesome and with the delivery of the 2nd phase of the Silver Line, it’s going to get even better.