2025 MARKET REPORT
Alexandria’s Market Remained Stable to Close Out 2025
Alexandria’s commercial market indicators remain steady, despite a year of uncertainty at the federal level, with an office vacancy rate that improved since June from 21.6% to 18.9%, thanks in part to the removal of 5001 Eisenhower Avenue from office inventory. The obsolete office building is now under construction and will be converted to affordable housing.
OFFICE TRENDS
↓18.9%
Office Vacancy Rate
4,138,883 SF
Development Approved
4,106 Jobs
Added or Retained
Alexandria’s office vacancy rate was 18.9%, a decrease of 2.2 percentage points year-over-year. In Northern Virginia, the office vacancy rate was 21%, reflecting the region’s ongoing challenges related to federal government uncertainty and post-pandemic recovery.
Construction and financing costs remain elevated, delaying groundbreakings for approved developments until economic conditions shift to stability and growth.
Alexandria continues to be a leader in office conversions, removing obsolete office space from its commercial inventory.
Click below to download the full report for a deeper look into Alexandria’s 2025 office statistics.
Vacancy Rates Fell Citywide
ECONOMIC DEVELOPMENT WINS
4,106 JOBS
Added or
Retained in 2025
3.8%
Alexandria Unemployment Rate
RETAIL TRENDS
The health of Alexandria’s retail market is sending mixed signals. The government shutdown in October raised uncertainty, but foot traffic remains strong. Consumer spending nationally was stagnant, up just 0.5% in November, suggesting consumer caution heading into 2026.
72
Retail & Restaurant Openings and Announcements in 2025
Most of the retail businesses and restaurants announced in the last year are local and independent, suggesting that these businesses may have bounced back after the pandemic. That said, it is still unclear if this trend will last, especially after the most recent government shutdown with the possibility of more challenges to come.
For a look into retail and restaurant openings in 2025, download our Retail Report here.
DEVELOPMENTS IN THE PIPELINE
REGIONAL &
FUTURE OUTLOOK
The future of the economy remains uncertain, as ripple effects from the federal government shutdown and broader economic pressures continue to impact the Greater Washington region.
The labor market has been under strain for multiple quarters; job openings have fallen, and unemployment rose sharply last year. In November, the unemployment rate for the Greater Washington region reached 4.5 percent, although Alexandria’s was 3.8 percent.
Recent business expansions, like that of Systems Planning & Analysis, indicate continued growth in the private sector, while the recent National Science Foundation announcement illustrates Alexandria’s value for public sector tenants too.
Challenges in Alexandria’s office market provide an opportunity to think creatively and chase new opportunities in place-based development. This future-focused outlook has created a collaborative environment that seeks to find solutions and build on Alexandria’s potential for the future.
