Office vacancies are trending down in Alexandria, although Old Town and Old Town North are going against the trend.
That’s according to the Alexandria Economic Development Partnership’s Mid-Year Market Report released Tuesday (Sept. 8) looking at commercial real estate trends for the first half of the year through June 30, 2026.
Office vacancies fell from 21.6% to 18.8% year over year, which is below Northern Virginia’s 20.1% vacancy rate. AEDP said contributing factors were the retention of the National Science Foundation when it moved in May to a former 86,600-square-foot U.S. Patent and Trademark Office building. The U.S. Department of Housing and Urban Development is occupying the former NSF headquarters as the federal government office moves its headquarters from southwest D.C.
Another factor was construction beginning to convert the long-vacant Victory Center office building into affordable housing.
In the report, AEDP only counted office buildings greater than 5,000 square feet.
Most neighborhoods saw vacancies go down — 27.7% in Carlyle and 16.9% in the West End. Potomac Yard saw vacancies remain flat, while Old Town and Old Town North’s vacancies rose 15.5%.
Notable recent leases include Charles Schwab at 1920 Ballenger Avenue and Water Environment Federation at 1940 Duke Street in Carlyle; the Academy of Managed Care Pharmacy at 675 N. Washington Street and lease renewal by HumRRO at 66 Canal Center Plaza in Old Town North.
The city’s commercial sales also rose over the last two quarters, with the largest sale coming from 4660 Kenmore Avenue in the West End. The buyer — Chicago Pacific Founders — purchased the Alexandria Professional Center for $16.5 million. Other notable sales include a $15 million purchase of 3800 Richmond Highway by NNN REIT; $7.2 million purchase of 2900 Eisenhower Avenue by Washington University of Science & Technology and $4.9 million purchase of 1505 Prince Street by Cohen Clinic for Plastic Surgery.
The report for the first time incorporated the industrial market, which includes flex and light industrial spaces largely concentrated in the Eisenhower Valley and West End. Industrial vacancy rates are up 5.9%, which AEDP says is due to Peraton vacating to consolidate in Herndon and WareSpace creating co-warehousing. However, AEDP says WareSpace at 950 S. Pickett Street is seeing high demand for new co-warehousing and flex spaces.
