Prince William County’s Office & Industrial Submarkets Q3 2019

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Route 29/I-66 Corridor Office

  • RBA: 3,057,959 SF
  • Vacancy Rate: 9.1%
  • 12 Month Net Absorption: 3,300 SF
  • Average Asking Rent: $25.43
  • 12 Month Rent Growth: 0.8%

The Route 29/I-66 Corridor (Gainesville & Haymarket) has seen significant growth from a residential and supportive retail standpoint, but there is little office demand in the area as evidenced by its small inventory of space. Of the 3,057,959 total square feet only 368,251 SF is considered 4 & 5-Star (12%). Over 89,000 SF of space delivered in the past 12 months with another 168,250 SF over three properties that is set to deliver in August 2020. This has the potential to increase vacancy and impact the submarket’s meager rent growth; however, it could also be an indicator of increased demand.

Route 29/I-66 Corridor Industrial

  • RBA: 13,303,456 SF
  • Vacancy Rate: 6.5%
  • 12 Month Net Absorption: 254,000 SF
  • Average Asking Rent: $11.83
  • 12 Month Rent Growth: 4.5%

Gainesville and Haymarket’s industrial market is thriving and is 2nd to only the Route 28 North submarket in terms of asset value. In the past 12 months, even with 193,000 SF of new inventory the submarket saw positive net absorption of 254,000 SF, a 0.6% decrease in vacancy, and rent growth of 4.5%. This is clearly an indication of strong demand and even with over 800,000 SF delivering in the next year and another 100,000+ SF proposed, it’s likely that fundamentals will remain strong.

Manassas Office

  • RBA: 2,622,226 SF
  • Vacancy Rate: 5.0%
  • 12 Month Net Absorption: 29,000 SF
  • Average Asking Rent: $21.69
  • 12 Month Rent Growth: 0.4%

Fundamentals in the Manassas are solid… boring but solid. At 5% vacancy the submarket is well below the metro average and the past 12 months saw a 0.4% rent growth and 29,000 SF of net absorption. Still, at only 2,622,226 SF of total inventory, who cares? The submarket only has 163,000 SF of 4 & 5-Star space, the last of which delivered in 2009, and while Manassas rents may be affordable at an average $21.69/SF, the Route 29/I-66 Corridor seems more likely to absorb any new demand in Prince William County.

Manassas Industrial

  • RBA: 6,692,340 SF
  • Vacancy Rate: 1.3%
  • 12 Month Net Absorption: 45,000 SF
  • Average Asking Rent: $11.79
  • 12 Month Rent Growth: 4.3%

Manassas’ industrial submarket is similar to its office market in terms of its relationship to the Route 29/I-66 Corridor. The submarket is only half the size of its neighbor with no new deliveries since Q4 2016 and none in the pipeline. The logistics industry makes up the majority of the inventory, which is not surprising when considering Amazon’s impact on brick and mortar retail.   Developers may see Gainesville and Haymarket as the future, but with average rents and rent growth only slightly lower ($0.04/SF and 0.2% respectively) and with vacancy at an astonishing 1.3%, Manassas still boasts strong fundamentals. A fact that is further evidenced by the average and median cap rate for sales in the past 12 months (6.4% and 5.6% respectively).

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