Northern Virginia Industrial Figures Q1 2023

Northern Virginia remains a bright spot in the Mid-Atlantic in the first quarter of 2023. Long material delays, labor challenges, and concerns of an impending recession had put into question the resilience of the market. However, demand continues to outpace supply for the moment, and rents continue to climb. While new construction starts have been hampered by the uncertainty in the capital markets, tenants continue to lease new space, and Q1 saw moderate leasing activity at 354,000 sq. ft.

The Northern Virginia industrial market reached its tenth consecutive year of positive net absorption in 2022. During the first quarter of 2023, vacancy decreased another 10 basis points (bps) to a new record low of 3.4%. Despite projections of persistent economic headwinds, CBRE has reported that global demand for e-commerce activity will drive an additional two billion sq. ft. of logistics space demand over the next 5 years.