Northern Virginia Industrial Market Figures Q4 2022

Long material delays, labor challenges, and concerns of an impending recession put into question the resilience of the market. However, demand continues to outpace supply for the moment, and rents continue to climb.

Northern Virginia saw moderate leasing activity in Q4, although tenant demand slowed, particularly in the bulk sector. Quarterly absorption posted negative, but Northern Virginia has reached its 10th consecutive year of positive net absorption for the year. Meanwhile, vacancy dropped 60 basis points (bps) to a new record low of 3.5% Despite the projections of persistent economic headwinds, CBRE has reported that global demand for e-commerce activity will drive an additional 2 billion sq. ft. of logistics space demand over the next 5 years.

The fourth quarter saw a slight backtrack from the record-breaking previous 8 quarters. Deliveries outpaced leasing activity for the first time in 3 years due to a moderate slowdown of tenant demand, however limited availability has continued to push upward momentum on rents through the quarter.