Northern Virginia Office Figures Q4 2023

December 29, 2023 10 Minute Read

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The Northern Virginia office market recorded 320,000 sq. ft. of occupancy loss during the fourth quarter, pushing vacancy 30 basis points (bps) over the prior quarter to 23.3%. While 76% of transactions signed in Q4 had a positive or neutral impact on absorption, four large move-outs accounted for 137,000 sq. ft. of occupancy loss, offsetting positive momentum. Annually, the market posted 2.1 million sq. ft. of negative absorption and vacancy increased 150 bps year-over-year, up from 21.8% in Q4 2022.

Consistent with leasing trends across the D.C. metro area, activity in Northern Virginia remained low during the fourth quarter. In total, 32 tenants signed leases totaling 1.3 million sq. ft., flat quarter-over-quarter and a level which is 25% below the post-pandemic quarterly average.

Sublease availability remains elevated at 123% above pre-pandemic levels, currently at 5.4 million sq. ft. This represents 3.3% of total market inventory and 12.9% of all availability in Northern Virginia. However, total availability has begun to decline, decreasing from a peak of 5.7 million sq. ft. in Q2 2023. Further, demand for sublease space is limited as only 25% of listings are resulting in lease transactions.