The Fairfax County commercial office market finished 2016 on a relatively high note. During the last half of 2016, vacancy rates dropped, new office construction starts increased and leasing activity was positive. Presidential election campaigns have always prompted slowdowns in office leasing in the county, but gross leasing activity for the last six months of the year finished stronger than anticipated at roughly 4.9 million square feet. That put the 2016 leasing total at 10.7 million square feet, slightly under the 10.9 million square-foot average for the past 10 years. 

The Tysons Corner, Reston and Chantilly submarkets continue to drive the majority of leasing in the county with more than 61 percent of total activity for the year. At year’s end, 97.1 million square feet of office space was occupied in Fairfax County. That is more than the total inventories of Arlington, Loudoun and Prince William counties, and the cities of Alexandria, Fairfax and Falls Church combined. 

Renewals and consolidations continue to dominate leasing activity throughout the county. There were only three office transactions in excess of 100,000 square feet during 2016, compared with eight during 2015. All three deals were 

renewals. Boeing Satellite Systems renewed for 168,000 square feet in Herndon, and Wells Fargo Bank and U.S. Customs and Border Patrol renewed in Tysons Corner for 157,000 square feet and 106,000 square feet, respectively.

The overall and direct vacancy rates dropped to their lowest levels since 2014. The overall vacancy rate, which includes available sublet space, decreased from 17.4 percent at midyear to 16.8 percent at the end of the year. The direct vacancy rate, which does not include sublet space, dipped to 15.8 percent from 16.5 percent at mid-year. The overall amount of available office space at year-end stood at 19.5 million square feet.

New office construction continues throughout Fairfax County. At year’s end, nine office buildings totaling more than 3.1 million square feet were underway in seven submarkets. More than 58 percent of the space being built is leased or will be occupied by owners. Fairfax County ranks as the 15th most active office construction market nationally. 

Five office buildings delivered during 2016, bringing the county inventory to nearly 116.7 million square feet of space.

Fairfax County is the second-largest suburban office market in the nation behind only Orange County, Calif..

The Fairfax County Economic Development Authority (FCEDA) promotes Fairfax County as one of the world’s best business locations. The FCEDA’s free services can help you take advantage of the unlimited possibilities in Fairfax County. We have comprehensive, up-to-date data on labor force trends, taxes, utilities, real estate, housing and meeting accommodations—along with scores of other facts and figures to help businesses grow and prosper.