Surprise: It's a Great Time to Get Office Space in Arlington

Attention, business owners: It’s a great time to lease office space in Arlington, according to a new report from commercial real estate company West, Lane & Schlager.

Arlington is a pricey place to lease any space, office or otherwise, but the time is actually ideal to do so with vacancy rates still high, states the company’s Year-End 2015 Tenant Landscape report. Beware, however: this tenant’s market won’t last forever.

West, Lane & Schlager projects that rents in northern Virginia will increase moderately this year as vacancy has started to stabilize, but “conditions do not currently favor building owners, so they are more likely to offer favorable terms in order to secure leases for their available space, especially for larger tenants.”

The report notes that Rosslyn has been struggling recently because of federal relocations, which explains the high 28.4 percent direct vacancy rate last year. In contrast, the Clarendon/Courthouse area shows an 18.3 percent direct vacancy rate.

So times are good now for tenants, but the report indicates that leverage is going to start shifting to the landlords before too long.

“Moving forward into 2016, there will be considerably less uncertainty surrounding the Washington region’s economy,” the report states. “Increased Federal government and contractor hiring should provide an added economic boost in the near future, while private sector firms continue to be the cornerstone of employment growth in the period ahead. We expect 66,400 new jobs will be added in 2016 and 57,800 in 2017.

“The acceleration of hiring in the Professional/Business Services sector suggests that the office market will tighten over the next several years, leading to declining vacancy, rising rents, and more limited tenant leverage,” the report adds.

The report indicates that the Clarendon/Courthouse submarket has the highest average rent in northern Virginia at $43.51 per square foot. The average across the region is just $32.09 per square feet at the end of 2015.