MARKETBEAT

Office Snapshot Q4 2015

Northern Virginia

Economy

NORTHERN VIRGINIA OFFICE

The Washington, D.C. Metropolitan regional economy finished 2015

Economic Indicators

in great form, with the region ending the year with its highest level

12-Month
Forecast

Q4 14

Q4 15

DC Metro Employment

3.13M

3.20M

nonfarm payrolls in 2015 was three times greater than the total for

DC Metro Unemployment

4.7%

4.3%

2014further evidence that 2014 represented the bottom of the job

U.S. Unemployment

5.6%

5.0%

market and 2015 a return to more robust market conditions. The

of job creation since 2005. The 58,000 net new positions added to

unemployment rate for the region also improved, ending 2015 at

4.2%.

Market Indicators
Q4 14

Q4 15

Overall Vacancy

18.8%

18.3%

Net Absorption

(426K)

27K

Under Construction

2.1 M

2.2 M

$31.73

$31.37

Average Asking Rent

Northern Virginia (NoVA) accounted for the majority of the regions

12-Month
Forecast

new jobs24,400well above NoVAs historical annual average of

19,300. The largest growth among non-office-using employment
was in the Leisure and Hospitality (+4,900 job gains), Education
and Healthcare (+6,330) and Retail (+1,770) sectors. Among officeusing industries, the Professional and Business Services sector
added 6,000 net new jobs, primarily from management and
technical consulting firms.

Net Absorption/Asking Rent

Market Overview

4Q TRAILING AVERAGE

1.2

$34

1
0.8

$32

0.6
0.4

$30

0.2

240,000 sf of positive year-end absorption in 2015, and the

vacancy rate had declined to 18.3% from 18.8%. Every submarket
within Arlington County posted positive net absorption over the
course of the year with Crystal City and Clarendon/Courthouse
outpacing the other submarkets. Crystal City registered 123,300
sf of positive absorption and its vacancy rate declined to 21.8%

$28

(down from 24.4%), while Clarendon/Courthouse posted 106,000

sf of absorption and a vacancy rate of 16.3%. Tysons Corner,

-0.2
-0.4

The Northern Virginia commercial real estate market registered

2010

2011

2012

2013

Net Absorption, MSF

2014

2015

$26

buttressed by a number of large-scale new developments,

boasted the largest demand in 2015 with nearly 400,000 sf of
positive net absorption. Major expansions and relocations of large

Asking Rent, $ PSF

users such as Ernst and Young and Capital One accounted for
large portions of this growth. Indeed, Capital One signed the

Overall Vacancy

largest new lease in Northern Virginia during the fourth quarter of

2015, signing for 137,000 sf at 7900 Westpark Drive. The lease is

20%

considered growth in the market.

In addition, the banking

institution will have signage on both the east and west sides of the

18%

major roadway after the delivery of Capital Ones tower. Other

Historical Average = 16.4%

notable deals signed in the fourth quarter of 2015 include

16%

AECOMs renewal for 92,000 sf at 3101 Wilson Boulevard in

Clarendon and CARFAXs renewal for 73,800 sf at 5860 Trinity

14%

Parkway in Route 28 South.

12%
10%

2010

2011

2012

2013

2014

2015

cushmanwakefield.com

MARKETBEAT

Office Snapshot Q4 2015

Northern Virginia

SUBMARKET
Rosslyn
Clarendon/Courthouse
Virginia Square
Ballston
Crystal City
Pentagon City
Arlington County
R/B Corridor**
Old Town
Eisenhower
I-395
Alexandria
Inside the Beltway*
Tysons Corner
Reston
Herndon
Merrifield
Vienna
Oakton
Fairfax Center
Fairfax City
28 South
Springfield/Newington
Fairfax County
50/66***
28 North
Route 7
Leesburg
Loudoun County
Outside the Beltway*

NOVA MARKET TOTALS

TOTAL

TOTAL
BLDG

INVENTORY

SUBLET
VACANT

TOTAL
VACANT

VACANCY
RATE

AVAILABILITY
RATE

38
37
16
32
39
5
167
123
163
28
59
250
417
168
177
133
92
26
14
64
89
148
64
975
285
88
83
31
202
1,177

8,817,402
5,122,147
1,120,831
7,727,644
11,036,748
1,781,463
35,606,235
22,788,024
8,059,172
4,883,598
7,679,855
20,622,625
56,228,860
25,936,554
18,308,262
11,737,088
7,878,879
1,170,945
1,010,261
6,538,055
3,352,765
13,585,173
5,551,040
95,069,022
19,950,905
6,160,982
4,290,607
1,048,948
11,500,537
106,569,559

45,265
63,268
52,023
61,924
38,999
0
261,479
222,480
48,434
15,387
233,569
297,390
558,869
277,598
179,483
135,124
68,100
0
5,453
26,076
9,788
136,694
119,272
957,588
109,417
82,487
20,747
7,779
111,013
1,068,601

2,686,960
834,167
235,422
1,308,257
2,408,562
0
7,473,368
5,064,806
911,987
482,783
2,935,770
4,330,540
11,803,908
4,199,403
2,516,670
1,564,442
1,631,787
49,451
278,067
1,029,720
505,019
2,691,336
1,446,467
15,912,362
3,494,044
921,642
1,003,222
134,234
2,059,098
17,971,460

30.5%
16.3%
21.0%
16.9%
21.8%
0.0%
21.0%
22.2%
11.3%
9.9%
38.2%
21.0%
21.0%
16.2%
13.7%
13.3%
20.7%
4.2%
27.5%
15.7%
15.1%
19.8%
26.1%
16.7%
17.5%
15.0%
23.4%
12.8%
17.9%
16.9%

37.4%
24.1%
32.2%
32.8%
24.9%
50.7%
31.0%
32.7%
17.6%
10.7%
42.3%
25.2%
28.9%
25.3%
19.0%
23.3%
23.6%
8.1%
27.1%
27.6%
19.5%
29.0%
41.4%
23.8%
23.4%
17.0%
22.4%
15.6%
19.0%
23.2%

14,198
(2,366)
56,109
76,993
9,199
(0)
154,133
144,934
(10,413)
17,314
18,910
25,811
179,944
337,940
55,142
(165,406)
(210,391)
9,056
5,476
(17,777)
(28,338)
(25,107)
(204)
(39,609)
(241,974)
(61,294)
(48,598)
(6,694)
(116,586)
(156,195)

1,594

162,798,419

1,627,470

29,775,368

18.3%

25.3%

23,749

UNDER
CONSTRUCTION

AVERAGE
ASKING RENT

18,065
106,008
57,402
81,645
123,329
17,546
403,995
263,120
(6,726)
13,928
(266,386)
(259,184)
144,811
399,292
121,808
(73,405)
(344,848)
30,596
(45,552)
(64,423)
(39,507)
(15,193)
83,532
52,300
(463,734)
(2,209)
43,253
1,522
42,566
94,866

552,781
552,781
552,781
720,000
720,000
1,272,781
476,913
161,030
637,943
182,000
64,800
246,800
884,743

$40.21
$42.95
$37.43
$41.33
$37.60
$39.73
$41.01
$31.54
$38.18
$29.42
$30.88
$36.76
$30.97
$29.00
$26.16
$31.42
$24.96
$24.53
$27.80
$23.51
$24.72
$31.88
$28.25
$28.24
$21.91
$22.35
$23.68
$22.22
$27.61

239,677

2,157,524

$31.37

CURRENT
YTD
ABSORPTION ABSORPTION

*Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties.
**The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets.
***The 50/66 corridor is comprised of Merrifield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets.
p - preliminary

Key Lease Transactions 4Q 15

PROPERTY

SF

TENANT

TRANSACTION TYPE

SUBMARKET

7900 Westpark Drive

137,000

Capital One

New

Tysons Corner

8270 Willow Oaks Corporate Drive

122,900

Fairfax County School Board

Relet

Merrifield

3101 Wilson Boulevard

92,000

AECOM

Renewal

Clarendon/Courthouse

5860 Trinity Parkway

73,800

CARFAX

Renewal

Route 28 South

13221 Woodland Park Drive

55,600

GSA - Small Business Association

Relet

Herndon

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Copyright 2015 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered
to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

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