Alexandria's Office Vacancy Rate Ticks Downward, Commercial Sales Rise In Second Quarter

ALEXANDRIA, VA – Alexandria's office vacancy rate fell by nearly three percentage points year over year, the Alexandria Economic Development Partnership announced, though the city's overall trend is still toward emptying rather than filling spaces.

The AEDP announced on Tuesday that the vacancy rate for office buildings greater than 5,000 square feet had dropped from 21.6% to 18.8% year-on-year for the period of Jan. 1 to June 30. However, the change isn't necessarily being driven by new office rentals. The AEDP credited the city's retention of the National Science Foundation, which moved into an office building formerly occupied by the U.S. Patent and Trademark Office in May, and the beginning of a process to convert a vacant office building at 5001 Eisenhower Ave. into housing. The building is therefore no longer classified as empty office space.

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The change, however it occurred, means Alexandria is slightly outperforming the region as a whole, which has a 20.1% office vacancy rate.

Vacancy rates also went down in several neighborhoods, though not in Old Town, where it increased. There is no reported vacant office space in Potomac Yard, and West End had a positive absorbancy rate, meaning more space was leased than was vacated.

AEDP suggests that the city's negative net absorption rate means businesses are resizing their office footprints rather than vacating altogether, pointing to steady lease transaction volumes.

The city's small industrial and flex market vacancy rate ticked up from 4.9% to 5.9%, due, AEDP says, to Peraton vacating 14,000 square feet to consolidate in Herndon and 950 S. Pickett Street being reintroduced to the market for lease.

Commercial sales rose in the second quarter, with notable transactions in the spring and summer, including the $16.5 sale of 4660 Kenmore Ave. to Chicago Pacific Founders

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