Cassidy Turley’s Northern Virginia brokers have their predictions in for which office submarkets will perform the best and other things to expect in 2015.
Although seemingly counterintuitive given that we’ve been hearing that everyone – from millennials to empty nesters – prefers urban environments, the submarkets outside the beltway are expected to outperform the submarkets that are closer to the urban core. 70% of the brokers are betting on the outside submarkets. This was the case in 2014 with outer submarkets experiencing more demand and more stable conditions overall. 2016 may be a different story. The devastating effects of the federal government’s Base Realignment and Closure act that forced countless government agencies and the private sector contractors to exit the inner submarkets en masse over the past three years will largely be over. This has left many attractive options in submarkets with all the amenities that today’s tenants are increasingly desiring and with access to one of the nation’s highest quality workforces.
For the second year in a row Tysons Corner got the most votes for the individual Northern Virginia submarket that will perform best in terms of net absorption, rising rents and vacancy declines. Now that it is served by mass transit, Tysons is expected to become a premier option for cost conscious government tenants at a discount to the Rosslyn-Ballston Corridor and the new trophy quality product that is coming online has continued attract credit tenants from other markets. An honorable mention is given to Crystal City. The very aggressive deals that are currently being offered to land large users are expected to continue and are proving to be hard for many to pass up.
Other things to expect in 2015 – big deals from Ernst & Young, Bechtel continuing its expansion in Northern Virginia out of Maryland, a decision on the FBI headquarters move, and a lease being signed at 1812 North Moore – the beautiful 500k sf behemoth that hasn’t signed anyone yet.
By: Nathan Edwards
Director of Research, Cassidy Turley - Washington, D.C.
Email Nathan: Nathan.Edwards@cassidyturley.com
Contributor: CJ Hardy, Research Analyst, Cassidy Turley
Follow Cassidy Turley on Twitter: @CassidyTurleyRE