Q1 2022 Northern Virginia Market Report

Early signs of recovery are evident in Northern Virginia at the end of the first quarter 2022. For the first time since the pandemic hit two years ago, absorption moved towards positive territory. Total net absorption was 821,746 SF at the end of the first quarter 2022 compared to negative 677,170 SF a year prior.

Vacancy held steady at first quarter’s end, keeping the same 20.0% level it ended at last year. Vacancy is still 140 points above the 18.6% level a year ago but maintaining the same level two quarters in a row is promising.

As the Federal Reserve Bank continues to increase interest rates in an effort to curb inflation, landlords were under increased pressure to lower their rents in order to keep current tenants in place or attract new tenants into their buildings. So far, Northern Virginia landlords have successfully resisted reducing rates, choosing increasing concessions instead. Average rental rates at the end of the first quarter were at $33.75/SF compared to $33.38/SF a year prior.