Arlington’s Orange Line Submarkets Q3 2019

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Ballston

  • RBA: 8,037,415 SF
  • Vacancy Rate: 22.4%
  • 12 Month Net Absorption: 148,000 SF
  • Average Asking Rent: $41.40
  • 12 Month Rent Growth: (1.4%)

The big story in Ballston is the National Science Foundation’s move to Alexandria, which led to a 7.47% increase in the submarket’s vacancy rate. Only 10% of the 600,000 SF has been leased. With more than 2 million square feet available and competition from submarkets like Rosslyn and Tysons Corner and Reston, Ballston has seen a steady decline in rent growth over the past 2 years. Still, with a healthy economy, Amazon’s HQ2 announcement, and increased defense spending, Ballston should begin to see submarket fundamentals move in a positive direction.

Virginia Square

  • RBA: 1,651,602 SF
  • Vacancy Rate: 12.0%
  • 12 Month Net Absorption: 20,700 SF
  • Average Asking Rent: $37.79
  • 12 Month Rent Growth: (0.9%)

Clarendon/Courthouse

  • RBA: 6,293,752 SF
  • Vacancy Rate: 15.3%
  • 12 Month Net Absorption: (249,000 SF)
  • Average Asking Rent: $40.60
  • 12 Month Rent Growth: (0.5%)

The Clarendon/Courthouse submarket is more known for its restaurants/bar scene than for its office properties. The submarket not only has to compete with neighboring Ballston and Rosslyn but also with new deliveries in Reston and Tysons Corner. Net absorption over the past 12 months is a staggering (249,000 SF), but this was largely the result of the complete vacancy of 1650 Edgewood St for renovation. This led to a jump in the submarket’s vacancy rate of nearly 3% in just one quarter. Similar to Ballston and Rosslyn, Clarendon/Courthouse has seen negative rent growth over the past 12 months, but with a healthy economy, abundant amenities, and no new deliveries scheduled for the next 12 months, fundamentals should begin to rebound.

Rosslyn

  • RBA: 10,161,789 SF
  • Vacancy Rate: 21.1%
  • 12 Month Net Absorption: 704,000 SF
  • Average Asking Rent: $44.04
  • 12 Month Rent Growth: (0.5%)

Rosslyn has seen a steady improvement in submarket fundamentals since BRAC and sequestration pushed vacancies to a record high of 28% in 2014. At 21.1% vacancy the submarket still has a ways to go, and despite Nestle moving its HQ to 1812 N Moore St along with Deloitte’s expansion plans to lease about 115,000 SF at Waterview Tower, rents have still declined in recent quarters. In fact, other than the I-395 Corridor submarket and Ballston, Rosslyn has the highest vacancy rate in Northern Virginia. Fundamentals have the opportunity to recover as no projects are currently under construction; however, landlords are on the clock to fill the submarket’s approximately 2.5 million square feet with large GSA leases expiring in late 2020 and 2021.

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