Washington, D.C., Retail Market Report
Demand for Retail Space Trending Up as Northern Virginia Leads Nascent Recovery
Northern Virginia retailers prove resilient. Net absorption turned positive in the second quarter, driven entirely by the 484,000 newly occupied square feet in the Virginia portion of the market. Fundamentals are strongest west and south of Arlington. As of midyear, vacancy was below the pre-recession level in Greater Fredericksburg and within 40 basis points of 2019 marks along the Dulles and I-95 corridors. The latter submarket also posted annual rent growth of 10 percent. Retailers closer to the District have more ground to make up. Asking rents slid in Greater Fairfax County, while vacancy in the Alexandria-I-395 area topped 10 percent. While the spread of COVID-19 variants has delayed some office returns, when this process occurs it will draw both residents and retailers back toward these employment hubs.