Northern Virginia Office Market Report
- Northern Virginia’s net absorption totaled negative 474,998 square feet during the fourth quarter to bring 2023’s annual absorption total to a negative 1.7 million square feet.
- While Class B rents saw a slight decline over the past year, Class A rents have seen positive movement, increasing 2.0% year-over-year. This is indicative of the bifurcation of office user demand. Trophy and Class A space is outperforming, while Class B and Class C rates will continue to drop or remain stagnant in the face of limited demand.
- Northern Virginia was home to a majority of the metro area’s major fourth-quarter lease transactions, with a handful of larger new leases signed during the quarter, signaling tenants’ confidence in long-term real estate decisions.
- 2023 saw no office deliveries in Northern Virginia, a market that has averaged 1.6 million square feet of deliveries over the past 20 years. A slowdown in office deliveries and the lack of new speculative office construction will be advantageous in helping to balance supply with waning demand.