2026 MID-YEAR MARKET REPORT
January 1 – June 30
Alexandria’s 18.8% vacancy rate, down from 21.6% year over year, remains below regional figures, supported by major wins such as retaining the National Science Foundation and several notable office conversions.
Net absorption remains negative, despite steady lease transaction volume, suggesting that tenants are resizing as the market continues to recover from the pandemic and adjust to office conversions and redevelopment.
Across the region, tenants are reducing larger footprints to upgrade their office space into newer, higher-quality buildings with premium amenities, keeping Class A vacancies low and prompting developers to find new uses for obsolete buildings.
Northern Virginia Q2 2026
| Vacancy Rate | 20.1% |
| Net Absorption (SF) | 302,274 |
| Inventory (SF) | 192,220,000 |
SUBMARKET STATISTICS
| Submarket | Vacancy | Inventory (SF) | |
|---|---|---|---|
| Old Town/Old Town North | ↑15.5% | 7,520,160 | -102,789 |
| Carlyle | ↓27.7% | 6,361,506 | -70,384 |
| West End | ↓16.9% | 1,862,047 | 14,157 |
| Potomac Yard | ↓0% | 908,527 | 0 |
The office vacancy rate in Alexandria’s Carlyle submarket is trending downward, from 29.1% year over year but remains elevated, while Potomac Yard has no office vacancy, signaling a strong demand for new office space in a submarket with limited inventory.
Note: Alexandria office inventory contains all buildings greater than 5,000 square feet; submarket statistics do not comprise entire Alexandria inventory. Source: CoStar.
Notable Office Leases
Leasing activity in Alexandria continues to trend toward smaller office footprints, with a flight to higher-quality, amenity-rich spaces, echoing regional trends.
| Address | SF Leased | Tenant | Sign Date |
|---|---|---|---|
| 66 Canal Center Plaza (Old Town North) | 40,472 | HumRRO (renewal) | May 2026 |
| 675 N. Washington St. (Old Town North) | 15,585 | Academy of Managed Care Pharmacy | May 2026 |
| 1920 Ballenger Avenue (Carlyle) | 10,761 | Charles Schwab | |
| 1940 Duke Street (Carlyle) | 10,131 | Water Environment Federation | July 2026 |
| Address | Sale Price | Buyer | Sign Date |
|---|---|---|---|
| 4660 Kenmore Avenue (West End) |
$16,500,000 ($140.72/SF) |
Chicago Pacific Founders | April 2026 |
| 3800 Richmond Highway (Potomac Yard) |
15,000,000 ($353.59/SF) |
NNN REIT | June 2026 |
| 2900 Eisenhower Avenue (Carlyle) |
7,222,250 ($120.37/SF) |
Washington University of Science & Technology | April 2026 |
| 1505 Prince St (Old Town) |
4,900,000 ($270.72/SF) |
Cohen Clinic for Plastic Surgery | July 2026 |
Notable Office Sales
Sale activity rose over the past two quarters; the largest sale was the Alexandria Professional Center at 4660 Kenmore Avenue. This building is primarily medical office, a commercial real estate sector that has seen stronger demand across Northern Virginia.
Notable Leases
| Address | SF Leased | Tenant | Sign Date |
|---|---|---|---|
| 602-608 S. Pickett Street (West End) | 18,769 | ACPS Textbook Services Center | January 2026 |
| 611 S. Pickett Street (West End) | 16,590 | Roda Auto Care | January 2026 |
| 841-881 S. Pickett Street (West End) | 11,694 | Collingwood Media Group | April 2026 |
| 5150-5184 Eisenhower Avenue (Eisenhower Valley) | 8,966 | Singularity Security Group | March 2026 |
- Alexandria’s industrial and flex market is relatively small compared with neighboring jurisdictions, with most buildings concentrated in the Eisenhower Valley and West End and supplemented with smaller, specialty buildings throughout Alexandria.
- Vacancy increased to 5.9% from 4.9%, driven by negative net absorption created after Peraton vacated 14,000 square feet to consolidate in Herndon and WareSpace removed 950 S. Pickett Street from the market to create co-warehousing. This renovated space has recently been reintroduced to the market for lease.
- Leasing demand is rising in Alexandria’s industrial and flex market as industrial uses trend away from heavy traditional industrial toward more flex and co-warehousing spaces not available elsewhere inside the Beltway. As evidenced by recent leasing activity, WareSpace is seeing high demand for its newly offered co-warehousing and flex spaces.
Note: Alexandria industrial inventory includes all industrial and flex buildings. Source: CoStar.