The old Transportation Security Administration buildings in Pentagon City, vacant and awaiting redevelopment, could get put to a new, temporary use.
Avis Car Rental is looking to add rental operations to the pair of offices and their underground garages at 601 and 701 12th Street S. The business, which currently has a location at 2600 Richmond Hwy, has filed two applications, one for each building, with the county.
The TSA announced in 2015 that it would be leaving its headquarters for offices in Alexandria after the expiration of the five-year lease it signed in 2013. That stalled and amid the pandemic, the agency switched course and instead moved to Springfield, opening its headquarters in 2021.
At the time of the announcement, Arlington was coping with relatively high office vacancy rates driven in part by the departure of major tenants — including the U.S. Fish and Wildlife Service and the National Science Foundation — in search of cheaper leases.
After a dip down, the pandemic hit, sending the office vacancy rate even higher, where it has remained due to lasting remote work trends Covid catalyzed.
Avis proposes an alternative use until the owner of the office buildings, Brookfield Properties, razes these towers and builds four new towers with a mix of residential, office and retail uses. Brookfield’s redevelopment plans, first filed in 2019, are currently on hold.
“The proposed Vehicle Rental Use will further Arlington County’s goals and aims for a resilient commercial market,” attorney Matthew Weinstein, representing the car rental company, wrote in an application. “The Property is currently operating as a vacant office building until future redevelopment. The Vehicle Rental Use will improve existing conditions by activating space that would otherwise remain vacant for the short to mid-term. Moreover, the Vehicle Rental use will benefit the National Landing area by allowing customers arriving at National Airport to have a reliable and efficient option for renting vehicles during their visit to the Washington, D.C. area.”
Avis plans plans on using 50-250 spaces daily per garage, but is leasing some 922 parking spaces between the two TSA buildings to have extra space “depending on the operational needs,” such as handling overflow from other facilities, Weinstein writes.
Customers will access the facility from the lobbies of both buildings, where there will also be service counters. Avis plans to serve customers and rideshare drivers and rent an estimated 40-50 vehicles per day. The proposed hours of operation are 7 a.m. to 7 p.m., seven days a week.
“The Applicant’s vehicle rental facility network works cohesively to ensure each rental facility is meeting customer demands and the Applicant’s operational needs. This means that at certain times each vehicle rental facility in the Applicant’s network will back up and supplement each other depending on demand and operational requirements.”
Meanwhile, plans to redevelop the TSA buildings have been on hold since 2020, at the request of Arlington County planners, Brookfield previously told the Washington Business Journal. At the time, they were working on a new sector plan to guide future development in Pentagon City.
The plan that was in place when Brookfield filed preliminary redevelopment plans reached the end of its useful life in light of Amazon’s second headquarters. Despite some vocal opposition, the Arlington County Board approved a new plan that focuses on residential infill development and “ribbons” of tree- and plant-lined walking paths.
Brookfield did not return a request for comment about an updated timeline for redevelopment.
Sponsored by Monday Properties and written by ARLnow, Startup Monday is a weekly column that highlights Arlington-based startups, founders, and local tech news. Monday Properties is proudly featuring 1515 Wilson Blvd in Rosslyn.
(Updated at 12:05 p.m.) Shift5, a data and cybersecurity company that protects planes, trains and tanks, is heading into 2023 in new and bigger digs in Rosslyn.
In early December, it expanded its office footprint at 1100 Wilson Blvd by 67% to accommodate a swelling employee base. The startup’s workforce grew by more than 50% in 2022, funded by a $50 million Series B fundraising round completed early last year.
The building, owned by column sponsor Monday Properties, is home to restaurant Sfoglina and the headquarters for defense and aerospace company Raytheon Technologies.
Shift5 says the investment in more office infrastructure demonstrates the flexibility, empowerment and responsibility it provides to employees to work wherever is best for them. From its founding in 2019, the startup has permitted its employees across the U.S. to use office space or work remotely.
“Despite economic headwinds, Shift5 has actually expanded our headcount by 54% just this year. Because of the work we do with the government, we have been insulated from a lot of this turmoil and have been fortunate enough to keep growing,” said Shift5 CEO and co-founder Josh Lospinoso in a statement to ARLnow. “We are hybrid-by-design and will remain that way, but some of our teams want to be working in-person and collaborating in real-time.”
The company says its expanded presence in Arlington enables it to continue driving the pace of technology outside of Silicon Valley and keep tabs on decisions the U.S. Department of Defense makes to improve critical infrastructure.
“Shift5 is in a powerful position in the market. We’ve found a beachhead within [the Department of Defense] and have several customers using our technology to help fortify the readiness, lethality, and survivability of the military,” Lospinoso said in a press release. “Such success has helped us invest back into our company, and our people, one of our most valuable assets. Our hybrid-by-design workforce and massive growth are proof points of the fast-growing D.C. metro community.”
The office will hold over 80 desks, spaces for team meetings and activities, flexible workstations with stand-up desks, easily-moveable furniture and dedicated quiet areas. The new office space also includes a wellness room for nursing mothers and for those who would like to address physical and mental health needs during the work day.
2022 was a big year for Shift5. In addition to the $50 million fundraising round, it appointed three C-level executives: its inaugural Chief Financial Officer, Chief Research Officer and Chief Technology Officer. It was named a Northern Virginia Technology Council (NVTC) Capital Cyber Award Finalist and Tech 100 Honoree, and recognized as an “Excellence Award Finalist” in the Most Promising Early-Stage Startup category for the 2022 SC Awards, which honor the American solutions, companies and people advancing cybersecurity.
It also secured multiple government and military contracts. Shift5 technology is used to monitor weapon system cyber health on aircraft, protect defense department weapons, provide technology for defensive cyberspace operations and provide cybersecurity for a network used by all military branches to share information and make decisions faster.
(Updated 12:40 p.m.) Arlington Community High School is set to take over part of an office building in Ballston next year.
The semi-nomadic school has had many temporary homes over the years, and is currently located in the former Fenwick building (800 S. Walter Reed Drive).
Now, it will move into the fourth and fifth floors, a space totaling 24,288 square feet, of the office building at 4420 Fairfax Drive. The building is also the headquarters of growing catering marketplace Hungry.
The Arlington School Board signed the lease, from January 2023 to Sept. 30, 2026, earlier this month, says spokesman Frank Bellavia.
The School Board heard and took action on approving the lease in its meeting on Oct. 27. Normally, it hears an item in one meeting and acts on it in a subsequent meeting.
The reason for combining these steps, per a presentation, is that “lease negotiations took longer than expected and staff wishes to begin design work immediately to help mitigate project delays.”
APS will move the school over the summer and students will start in this temporary location in September, Bellavia said.
The school system must seek a Special Use Permit from Arlington County to allow educational use in the office building. That use permit request will go before the Arlington County Board in January.
APS will spend an estimated $1.5 million on building modifications and approximately $80,000 a month on the lease. It estimates the rent will be around $90,000 a month in the final year of the lease.
This will be the last temporary home before moving to a building at Amazon’s second headquarters campus in Pentagon City.
Amazon has pledged to house the school in one of the office buildings it will build at the corner of S. Eads Street and 12th Street S. as part of the approved second phase of its HQ2 project.
A dental office at the base of an apartment building owned by the Church of Jesus Christ of Latter-Day Saints in Potomac Yard is gearing up to start seeing patients next month.
This dentistry practice was one of the half-dozen retail-equivalent conversions in mixed-use apartment buildings that the Arlington County Board approved in 2022. Property Reserve, Inc., which owns The Clark building at 3400 S. Clark Street, received approval for the change in May.
“[The space] has been leased to Riverside Dental, who will start seeing patients in their space in January,” said Property Reserve, Inc. communications director Dale Bills, adding that a Subway is serving sandwiches in another retail space while the third is “currently being marketed.”
A retail slump, combined with high office vacancy rates, has led to more of these conversions in recent months to uses such as medical offices and churches, however, the county has approved similar conversions in 2019 and 2014.
Meanwhile, the property group is also preparing to re-configure the building lobby to improve the separation between one approved use, a meetinghouse for Mormons, and residents accessing elevators to their apartments.
“It takes the present large single foyer and divides it into two ‘lanes,’ one heading to the meetinghouse elevator and one heading to the apartment building elevator,” said Candace Harman, a spokeswoman for congregations in Northern Virginia. “This project has been in planning for some time and hopefully should be completed within the next several months.”
The Clark is a real estate venture for the Church of Jesus Christ of Latter-Day Saints and doubles as a meetinghouse. The Mormon congregation that uses it was originally set to move into the building in March 2020, but that was delayed until the summer due to the pandemic, Harman says.
The move marks an expansion for the Mormon presence in the greater Crystal City area, as four congregations already meet in two office buildings in the Aurora Highlands neighborhood.
“If you aren’t familiar, our Church organizes based on geography,” Harman explained. “A Ward is a congregation that meets together on Sundays with a Bishop who is the local leader of that congregation. A Stake is a group of Wards within a geographic boundary that fall within the stewardship of a Stake President.”
Wards for young singles — those ages 18-30 — meets at 745 23rd Street S. while wards for older single adults meet next door at 727 23rd Street S. The latter building also houses a resource center that Harman says provides free services for immigrants, refugees and others in need to “build hope, develop life skills, and strengthen families.”
Additionally, the LDS church plans to re-fit the vacant third floor of that building to house an office suite for the D.C. Young Single Adults Ward, a project that is tentatively planned for 2023.
The Clark apartment building opened within the few years along with another nearby — The Sur, at 3400 Potomac Avenue.
A long-dormant plan to redevelop an aging office building and two restaurants between Rosslyn and Courthouse has been revived.
D.C.-based The Fortis Cos. has filed a conceptual site plan application to build a seven-story, 85-foot-tall apartment building at the intersection of Wilson Blvd and N. Rhodes Street.
It would replace an office building at 1840 Wilson Blvd belonging to a nonprofit organization, the National Science Teachers Association, as well as Il Radicchio (1801 Clarendon Blvd) and Rhodeside Grill (1836 Wilson Blvd).
In November of 2005, the Arlington County Board originally approved a site plan that would have retained the NSTA building, demolished the restaurants and replaced them with a new, six-story office building with nearly 62,000 square feet of office space and 10,000 square feet of ground-floor retail and restaurant space.
Three years later, the County Board granted an extension on the project until 2011. A state statute in the wake of the 2007-2009 Great Recession automatically extended the validity of the site plan amendment until July 1, 2020. The County Board has since granted another extension until July 1, 2023.
Fortis intends to file a site plan amendment in the first quarter of 2023 seeking another extension of the site plan until 2026, according to the application.
“It is anticipated that the property’s nonprofit owner NSTA will remain as a tenant on the property until the redevelopment occurs,” the application says.
Meantime, the applicant is seeking feedback from the county on a number of aspects of the plan, including the building’s proposed height.
Land use attorneys who filed the application say the proposed seven-story building complies with the maximum 16-story height limit for apartments developed in this zoning district, but it is taller than recommended in the Rosslyn-to-Courthouse Urban Design Study.
“While the Study recommends 5 stories/55 feet at this location, the proposed height will provide a visually appropriate bookened for this block in a manner that is in character with the surrounding development and helps meet the county’s development goals,” the application says.
The study allows for height flexibility in exchange for affordable housing commitments, community facilities, special design considerations and new streets, it continues.
This is the latest proposal to switch from a proposed office building to an apartment building, as office vacancies deepen and developers continue pursuing housing developments.
And this is not the only long-dormant project Fortis has reprised this year. The Washington Business Journal reported in September that the company is taking on a stagnating apartment project at 2025 Fairfax Drive, a half-acre parcel in the Radnor-Fort Myer Heights neighborhood.
Fortis has seen to completion other apartment buildings in Clarendon, Rosslyn and Pentagon City, as well as the Residence Inn in Courthouse.
Work is underway to take down the aging RCA building in Rosslyn — but a demolition schedule has yet to be set.
The forthcoming residential redevelopment for 1901 N. Moore Street, by McLean-based developer Jefferson Apartment Group, was approved in June 2021.
Sixteen months later, JAG Senior Vice President Greg Van Wie tells ARLnow that “the crews are removing cell tower equipment from the roof in preparation for demolition.”
As of now, though, there is no set date for the demolition, Van Wie said.
“We will have more updates on the schedule in the coming weeks,” he said.
A reader noted to ARLnow that he noticed the cell towers were gone in late September. This month, he described a large crane clearing the roof of HVAC units and other equipment, while down below, N. Lynn Street was closed down to one lane.
Those who were hoping for a dramatic implosion may be disappointed.
“We will be dismantling the existing building rather than imploding it so there won’t quite be the same show as with the old Holiday Inn, unfortunately,” Van Wie said.
One December morning in 2020, the 18-story hotel in Rosslyn came down during a controlled demolition that closed local roads and I-66. A new development with a 25-story residential tower an a 36-story hotel tower are being built in its place.
After taking apart the 13-story, 1960s-era RCA building, JAG will build a 27-story, 423-unit apartment complex. The planned 260-foot tall building is composed of a north and a south tower joined at the base and at the rooftop with an “amenity bridge.”
The fourth floor will feature a landscaped terrace and the roof will also have garden elements. There will be two levels of retail and 286 parking spaces spread across garages on the third and fourth floors and underground.
As part of the project, the developer will remove inner loop roads around the Rosslyn Metro station, as well as the skywalk connection between the RCA building and the Rosslyn Gateway building.
The developer will also donate $2.2 million toward improvements within Rosslyn, such as for Gateway Park, and add a mix of buffered, protected and unprotected bike lanes, colorized bus lanes, new intersections, a relocated red-light camera and a new Capital Bikeshare station.
A private secondary school in Ballston is looking to move to Rosslyn.
The Sycamore School, which has operated at 4600 Fairfax Drive since it began in 2017, will soon lose its home to a residential redevelopment. So it is asking Arlington County for permission to relocate to 1550 Wilson Blvd, near Fire Station 10, offices, apartments and an Arlington Public Schools building
The Sycamore School proposes operating a private school for up to 140 students grades five through 12, along with 40 staff members and teachers, according to a county report. Its campus would comprise 14,000 square feet on the third floor, divided into seven classrooms, a canteen, an art studio, an exercise room and other administrative rooms and amenities.
“The Applicant provides a valuable educational service to the County’s residents by serving a diverse cross-section of students,” writes land use attorney Andrew Painter. “As part of its personalized learning approach, The Sycamore School offers small class sizes at a ratio of one teacher to six students, and provides individualized instruction with self-paced learning and a focus on student choice.”
The Sycamore School’s proposed opening hours are 8 a.m. to 5 p.m., with classes occurring Monday through Friday from 8:30 a.m. to 3:30 p.m. Occasional school-related and community-based events may occur in the evenings, and are required to conclude by 11 p.m.
Meanwhile, the County Board approved a new childcare tenant in a nearby office building last month. The Gardner School will set up in the ground-floor retail space of an office building at the corner of Clarendon Blvd and N. Quinn Street (1776 Wilson Blvd).
The Gardner School has locations in seven states, the closest being in Herndon, Virginia.
The child care center will take up about 17,670 square feet, divided into 13 classrooms for preschoolers, toddlers and infants, playrooms and 400 square feet of outdoor play area. There will be up to 28 staff and up to 186 enrolled children.
But with two schools moving into an area with offices, apartment buildings, Arlington Public Schools’ H-B Woodlawn Secondary Program and the Eunice Kennedy Shriver Program, and Fire Station 10, the Rosslyn Business Improvement District expressed some concerns about transportation management.
The Rosslyn BID encouraged the county to “take a holistic approach” to evaluating APS’s transportation management plans for its two programs against those of the new daycare and private school.
Doing so, the BID said, could “help mitigate potential logistical and safety impacts, particularly during pick-up/drop-off hours,” per the report.
Feeling the pressure to respond to its soaring office vacancy rate, Arlington County is looking to fill empty buildings quickly.
One option for adding tenants and knocking down the 20.8% vacancy rate would be to permit companies to set up small warehouses, or micro-fulfillment centers, inside of office buildings that are struggling to attract new tenants — especially as remote work appears here to stay.
The proposed solution is part of a new initiative to modernize and add flexibility to the county’s zoning approval process. In addition to micro-fulfillment centers, this plan suggests a few other non-traditional uses for office buildings, from breweries to urban farms. It also provides an expedited public process with shallower community engagement so that the Arlington County Board can sign off more quickly.
“The goal of this different approach for new or amended uses is to have them ready for board consideration more quickly than other typical zoning studies,” said Jill Hunger from the Dept. of Community Planning, Housing and Development (CPHD). “This is the first application of the county manager’s strategy to ensure commercial market resiliency.”
After a discussion that called out county staff for not engaging enough with the community, all but one member of the Planning Commission voted to send the amendment to the Arlington County Board for approval on Monday. Commissioner Stephen Hughes abstained.
The proposed zoning change limits each micro-fulfillment center to 10,000 square feet, reflecting industry best practices and staff discussions with center operators, Hunger said. If the center is in a ground-floor space and opens onto an active street, it must provide a walk-in customer sales area.
Staff recommend that no fewer than 10% of deliveries should be made by a delivery worker on foot or on a bicycle.
“It’s anticipated that quite truthfully after the initial startup, and if more than one micro-fulfillment center operates in Arlington, this modal split may actually increase,” Hunger said.
While Planning Commission members ultimately voted in favor of permitting micro-fulfillment centers, a number criticized the plan for not talking to the civic associations that could be impacted.
According to a draft county document, the county placed public notice ads with the Washington Times for the Planning Commission and County Board meetings, updated its webpages for zoning studies and its response to office vacancies, and briefed the Planning Commission and the Economic Development Commission.
“We feel we have done the outreach that’s consistent with many zoning text amendments,” Hunger said.
But without asking residents for their input, Commissioner James Schroll said he has a hard time believing the County Board can approve the change without additional public hearings. The Board is expected to take up the matter at its Saturday, Oct. 15 meeting.
“How we do what we do matters,” he said. “I get that you want to move quickly and I support that and I also want staff to be engaging with broad stakeholders as you do that.”
He said he’ll be reticent to support future amendments to consider permitting breweries and urban farms in office spaces, for instance, if there isn’t more stakeholder outreach.
(Updated 11:20 a.m.) Arlington has the second highest work-from-home rates in the nation, U.S. Census Bureau data from 2021 show.
The county falls just behind Fremont, a city in California’s Silicon Valley that is home to numerous tech companies, while D.C. ranks third. And within the metro D.C. area, the remote work population in northern Arlington specifically is second in size only to the central and downtown parts of the District.
People who study these trends, like Economic Innovation Group economists Adam Ozimek and Eric Carlson, say Arlington’s high ranking does not surprise them. They analyzed data on remote work for ARLnow, comparing the 46 commuting zones that make up the D.C. area.
At 55%, “North Arlington has one of the highest work-from-home rates in the D.C. region,” said EIG Chief Economist Ozimek. “Even South Arlington does pretty well in terms of the region overall, 43% is high overall, even though the income divide you can see.”
Looking at five-year population estimates, they found that the D.C. area as a whole topped the charts with a 34% telework share overall, followed by San Francisco (33%) and Austin (32%). San Jose and Seattle came in fourth and fifth, and much larger cities, including Chicago and New York City, ranked 18th and 20th with teleworkers comprising around 23% of the workforce.
“The D.C. area is just about as work-from-home as we would expect based on underlying factors,” Ozimek said. “Higher-educated places have more work from home. More expensive places have higher rates of working from home. And occupation matters: you’ve got a lot of skilled workers in general. The more skill, the more likely it is to be remote.”
Arlington, he said, has some of the highest average home values and education levels in the region. In addition, nearly half of jobs in the D.C. area can be done remotely, compared to other parts of the country, like Las Vegas and Grand Rapids, Michigan, where 30% or fewer jobs can be done remotely, they found.
While the pandemic precipitated this pivot to remote work, working from home — at least a few days a week — appears to be settling in as a permanent fixture of how many Arlingtonians get their jobs done.
And that is impacting Arlington County’s record-high office vacancy rate, which reached 20.8% during the second quarter of 2022. The county generates 45% of its property tax revenue from taxes on commercial properties like office building, helping to fund Arlington schools and county services while taking some of the pressure off of homeowners.
The office vacancy rate is higher now — with masks no longer required and vaccines and boosters readily available — than it when the pandemic first took hold (16.6%) and at the beginning of 2021 (18.7%).
“The challenges are really deep,” County Manager Mark Schwartz told the County Board last week. “Long-term leases are becoming rarer. To ask people who used to come to the office five days a week to do so again… might not be met with universal acclaim from those who used to drive into the office five days a week.”
A record-high office vacancy rate plus burdensome taxes and permit processes are just some hurdles for local businesses that Arlington County Board hopefuls are pledging to tackle.
During a debate hosted by the Arlington Chamber of Commerce last night (Wednesday), incumbent Matt de Ferranti (D) and his two independent opponents, Audrey Clement and Adam Theo, explained to a 30-person audience how they would extend a helping hand toward area businesses.
Clement emphasized office-to-residential conversions as a way of reducing the office vacancy rate, which reached 20.8% in the last quarter, and “deal with our housing crisis at the same time.”
“Office-to-residential conversion is a smart approach that both Alexandria and the District of Columbia are implementing,” she said. “There are many reasons this is a sensible strategy, and Arlington’s Missing Middle is not.”
Office buildings are readily available, have more parking than most new apartment buildings and are close to Metro, she said.
“I don’t believe honestly there’s disagreement that we should do office to residential. It’s how we do it,” de Ferranti said. “We are already working on that, but we need to move more quickly.”
Seeing as empty offices are spread throughout buildings, Theo said “conversions are not a silver bullet” and suggested filling these vacancies with schools.
“That is something that’s much easier to renovate for than residential and it helps to tackle our school overcrowding that we’ll be facing over the next decade or two,” and makes more opportunities available to young families in urban areas, he said.
Currently, the county is exploring more flexible zoning in offices to allow for “light industrial” uses such as delivery staging areas, urban farms, breweries and small warehouses.
All three, meanwhile, say they would change how businesses are taxed.
“I am concerned about excessive taxation, particularly real estate taxes, but if you can start with shaving off some of those business taxes, that would be just fine with me,” Clement said.
Theo called for removing the business tangible tax, a tax levied on property used in business that requires maintaining records of nearly every item of value that a business owns.
Business tangible tax assessments are expected to increase by 16% this fiscal year, according to the 2022-23 budget. But Theo said the $40 million it netted last year is not worth squeezing support businesses with thin margins.
“The county sneezes and it spends $40 million,” he quipped.
De Ferranti advocated for increasing the threshold for Business, Professional and Occupational License (BPOL) tax, which comprises about 5% of the county’s revenue for this fiscal year, and has been steadily rising over the last decade.
Under the tax — which has long had critics both on the right and the left — businesses with revenue of less than $10,000 owe nothing, while those grossing up to $50,000 pay $30 and those grossing up to $100,000 pay $50. Beyond that, most businesses pay $0.36 per $100 in gross receipts, regardless of whether the business is profitable or not. Some businesses, like stores and restaurants, pay a lower rate while others, like printed newspapers, are exempt.
De Ferranti, however, balked at other tax cut suggestions.
“But broad statements like, ‘We should cut’ — first, our real estate tax rate is the lowest in the region,” de Ferranti said. “Our property values are so high, so that’s why our total bills are higher than some other localities. We have to keep investing when there’s a challenge in our economy.”
The pandemic and work from home trends are causing pain for owners of office buildings in Arlington and across the region.
Arlington’s office vacancy rate reached 20.8% this month, according to data from CoStar, as relayed by Arlington Economic Development. That’s up from 16.6% at the beginning of 2020, as the pandemic first took hold, and 18.7% at the beginning of 2021.
Arlington two main office submarkets, meanwhile, are seeing even higher vacancy rates. The Rosslyn-Ballston corridor’s office vacancy rate rose to 23.3% and that of National Landing (Crystal City and Pentagon City) rose to 24.4% as of the second quarter of 2022, according to new data from commercial real estate firm Colliers.
“The trend of rising vacancy and falling demand in the Northern Virginia market continued during the second quarter,” Colliers said in a report. “Vacancy rates reached 19.0 percent and over a million square feet of space has been returned so far in 2022.”
That’s despite some positive developments, like the renewal of Accenture’s 120,687 square foot lease at 800 N. Glebe Road in Ballston, the company said. Likewise, recent news of Boeing and Raytheon moving their corporate headquarters to Arlington are likely to mostly be moral victories for the county, as neither company is believed to be leasing any significant amount of additional office space.
Colliers noted that the highest-end office space (“Class A”) had the highest total area of additional vacancy. It also noted that a significant amount of office space is currently under construction in Arlington — though much of that can be attributed to Amazon’s forthcoming HQ2 in Pentagon City.
Demand in Northern Virginia fell for the third consecutive quarter returning 522,850 square feet of space to the market. In the second quarter, Class A product was the largest contributor to the negative demand, with 385,327 square feet of negative net absorption. The combined Class B and C product also registered negative demand, returning 137,523 square feet to the market. Subsequently, overall absorption figures for Northern Virginia in the first half of the year reached negative one million square feet.
[…] At the end of the quarter, just under four million square feet of construction was underway with half of that future inventory in Arlington County. This is down from the recent peak of over five million at the end of 2021.
On its face, high office vacancy rates might not seem like a problem for those living in Arlington, but in reality it could raise costs for residents. That’s because nearly half of Arlington’s local tax base comes from commercial property and more vacancy means less tax revenue for the county, which in turn puts pressure on residential property owners to make up the difference — or accept lower levels of local government services.
Arlington Economic Development, which helps to promote the county to potential office tenants, tells ARLnow that it is working to reverse the current trends.
“The commercial office market is an important component of the Arlington County tax base, which leads Arlington Economic Development to closely monitor vacancy trends and proactively direct resources to attracting and retaining businesses in Arlington,” the department said in a statement. “The COVID-19 pandemic has significantly altered the way businesses operate, particularly those in an office environment, and the elevated office vacancy rate across Northern Virginia is an indicator of this change.”
More from AED:
AED is committed to further reducing the office vacancy rate through a multi-faceted approach, including the following three areas:
- Targeted business attraction and retention efforts within our key industries to bring new operations to Arlington and support existing operations expand within the County
- Cultivating and catalyzing the local entrepreneurial ecosystem to further produce homegrown startups that mature into larger companies using more space.
- Enhanced regulatory flexibility that will expand the number of allowable uses within commercial buildings and quickly adapt to economic and market shifts.
- AED is pursuing this area In collaboration with the Department of Community Planning, Housing and Development and other County stakeholders.
AED is confident that communities like Arlington with a skilled workforce, flexible and proactive policies, and a high quality of life will be well-positioned to capture growth in the coming years.
Colliers, meanwhile, says it’s difficult to predict what will happen with office space down the road, though for many companies the days of bringing every employee into the office five days a week may be a relic of pre-pandemic times.
