Q1 2021 Northern Virginia Market Report
Northern Virginia continued to struggle in its recovery from COVID-19’s impact in the first quarter of 2021, totaling -1,367,002 in net absorption. Activity and demand have yet to rebound across all building classes, with the I-395 Corridor being the lone submarket to post positive absorption for the quarter. Average direct rental rates have dropped $.60/SF year-over-year, a strong change of direction for a market that had seen rates increase each year since 2014. The first quarter saw the TSA’s 634,000 SF HQ in Springfield get delivered, providing a boost for the overall market. Overall, the development pipeline in Northern Virginia remains strong. with over 3.4 million SF of space under construction. After having trended in a positive direction for several years before COVID-19, Northern Virginia is well-positioned to bounce back as vaccination levels increase and uncertainty fades in the coming months. Completion of Phase 2 of the Silver Line, which is now slated to open in early 2022, is another encouraging sign for Northern Virginia as its economy opens back up.