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Monday, March 19, 2012

One of Northern Virginia's Best Markets

The Rosslyn-Ballston Corridor Is One of Northern Virginia’s Most Sought After Locations

by Dan Gonzalez

The Rosslyn-Ballston (RB) corridor of Arlington, located conveniently to Reagan National Airport, the Orange Line of the Metro, and I-66, has become one of the more popular residential and office locations in North Virginia. The corridor -- Rosslyn, Courthouse, Clarendon, Virginia Square, and Ballston -- has shown strong growth in the residential market and the thinking is, this will help improve the commercial market.

Despite increased vacancies in 2011, office space rental rates increased 1.6 percent to $30.92 per square foot (PSF), partially due to the strong demand that still exists in the Washington DC region. Vacancies were around 12 percent in the area at the end of the year, compared to a whopping 16 percent on a national basis.

Three projects, with almost a 1.4 million square feet of space, are either under construction or just completed, including one from Monday Properties which is over 500,000 square feet alone. Accenture moved to the RB corridor from Reston to occupy part of a 302,000-square-foot building at 800 North Glebe Road developed by JBG. It remains to be seen how quickly this new space will be occupied despite increased concession packages being offered. The third project is the Shooshan Company’s recently-completed 675 N. Randolph St., a 555,000-square-foot building fully leased by DARPA (Defense Advanced Research Projects Agency).

Due to continued uncertainty in the economy, many companies continue to choose renewals rather than looking for new space and shorter-term leases are expected to continue through 2012.

Notwithstanding the Department of Defense closings and the unknown impact of federal budget cuts, Northern Virginia (and the Rosslyn-Ballston corridor in particular) continues to be one of the most attractive areas in the country operate a business. With the aforementioned new properties by the Shooshan Company, JBG, and Monday Properties, a lot is riding on the continued growth and popularity of Rosslyn-Ballston which has historically been tied to government related activities. In future entries I will discuss some very exciting entrepreneurial efforts being deployed to diversify this submarket’s corporate identity.

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