Overview
Our 2025 Mid-Year Market Report examines how development trends are unfolding in Alexandria, Virginia, through June 2025. High vacancy rates, limited leasing activity, and uncertainty tied to federal government changes continue to test the market for the surrounding region. Even so, Alexandria’s foresight to adapt through office-to-residential conversions and a thriving retail sector demonstrates how the City is charting a more sustainable path forward.
Highlights
- Northern Virginia’s office market continues to face headwinds, with construction activity at historic lows and almost no new office deliveries.
- High construction and financing costs continue to be a barrier to new development projects across the region.
- Alexandria remains a national leader in office conversions with 3.7 million square feet already approved or delivered over the last decade. These projects go beyond real estate, delivering community benefits such as affordable housing and schools.
- Office leasing activity in Alexandria remains slower than historic norms.
- Retail real estate remains strong, with Old Town vacancies at just 5.8% and year-over-year visitor growth of 4.6%, signaling a vibrant retail and restaurant market.
Alexandria by the Numbers
Alexandria remains an attractive choice for tenants, though many large occupiers are scaling back, and larger office blocks are limited. Each submarket tells its own story, with Old Town maintaining the lowest vacancy rate, Carlyle impacted by federal government changes, and Potomac Yard nearly at full occupancy—a reflection of its limited office inventory. As of June 2025, Alexandria’s vacancy rate remains below the regional vacancy rate of 23% for Northern Virginia overall.
21.6%
Vacancy Rate
-29,313 square feet
Net Absorption
18.9 million square feet
Inventory
Download the full report for more information on local and regional office and retail trends.