Northern Virginia office market report

Office conversions are hitting the headlines every week. Conversions have outpaced deliveries in the past 2 years, however, new supply has helped offset some of this loss, with more than 24 million square feet (msf) delivered since 2023. About 9.5% of Northern Virginia’s office inventory is either rumored, proposed, in the process of conversion, or already converted.

Despite Trophy and Class A asking rents in Northern Virginia reaching record highs, the spread between face rents and net effective rents (NER) remains significant. Landlords have largely preserved - and in some cases increased - headline pricing, but elevated concession packages continue to bridge the gap. Tenants are leveraging generous tenant improvement allowances (TIA), free rent, and flexible terms to offset relocation and build-out costs, keeping true occupancy costs well below quoted rates.

Northern Virginia has 72 active tenants in the market (TIMs) seeking upwards of 1.6 msf, with nearly half from the technology, nonprofit, and consulting sectors. Most requirements are concentrated below 50,000 square feet, with a typical requirement around 20,000 square feet. About one-third of activity is focused along the Rosslyn-Ballston corridor, followed by the Toll Road and Tysons submarkets.