Route 7 Corridor & Leesburg/West Loudoun Submarkets Q3 2019

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Route 7 Corridor

  • RBA: 4,688,075 SF
  • Vacancy Rate: 7.2%
  • 12 Month Net Absorption: 26,900 SF
  • Average Asking Rent: $28.17
  • 12 Month Rent Growth: 0.9%

With only 4,688,075 SF of total inventory, the Route 7 Corridor is a relatively small submarket; however, fundamentals are strong. The submarket’s “age” differentiates it from other, similar size submarkets. The average age in Ashburn is 35, a statistic only surpassed by the average age of its office buildings: 15 years (median age is 13 years). In fact, the submarket does not have an office building that was built before 1990 and over 40% of its inventory is comprised of 4 & 5-Star properties. The average rent for the submarket is $28.17/SF but this is a little deceptive as 3-Star properties account for 56.6% of the inventory with average rents of $25.08/SF ($7.44/SF lower than the average rent for 4 & 5-Star properties). The submarket’s vacancy rate is well below the metro average at 7.2% with 4 & 5-Star properties lower still at 6.1%. Based on this it’s not surprising that over 103,000 SF of 4 & 5-Star space is currently under construction with another 195,000 SF proposed. Fundamentals should remain strong despite this new supply as the submarket is likely to see increased demand with the delivery of the 2nd phase of the Silver Line metro and continued expansion of notable projects like One Loudoun.

Leesburg/West Loudoun Submarket

  • RBA: 3,829,925 SF
  • Vacancy Rate: 7.6%
  • 12 Month Net Absorption: 7,700 SF
  • Average Asking Rent: $26.49
  • 12 Month Rent Growth: 0.6%

The Leesburg/West Loudoun submarket encompasses South Riding, Leesburg, Purcelville, Aldie, Middleburg, and Hamilton. Despite spanning such a large area the submarket only has 3,829,925 of total inventory. What’s interesting is that this is comprised of 346 individual properties while its neighbor, the Route 7 Corridor, has over 850,000 SF more inventory which is spread over only 81 properties. The median age and size of the submarket’s inventory is 41 years and 4,900 SF with over 65% of the office product located in Leesburg. Despite its distance from public transportation, the submarket has experienced continuous positive net absorption since 2011; resulting in a vacancy rate that is well below the metro average at 7.6%. The average market rent for the submarket is $26.49/SF; however, nearly 83% of the submarket is comprised of 1 & 2-Star and 3-Star properties which have average rents of $25.75/SF and $25.22/SF respectively. Of the many “cities” that make up the Leesburg/West Loudoun submarket, South Riding may be the most promising and primed for commercial development. The recent expansion of Route 50 has improved east-west transit and Route 28 and Loudoun County Pkwy provide convenient north-south access.

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