Photo by Sam Kittner for AEDP
Market Overview
Alexandria’s office market continues to feel the ripple effects of the pandemic. Remote and hybrid work trends have driven vacancy rates higher, while rising construction costs impact new development. Federal layoffs and early lease terminations add more uncertainty, even as restaurants continue to anchor the City’s post-pandemic retail recovery. Office jobs are seeing moderate growth—albeit slowly—which could have a stabilizing effect over time. However, large-scale layoffs in the federal government are expected to shake up the job market for many months ahead. Amid these challenges, Alexandria continues to be a leader in the adaptive reuse of obsolete office buildings.
Alexandria Leads in Office Conversions
Alexandria and the Greater Washington region are embracing adaptive reuse strategies to combat office space oversupply. Thanks to flexible policies already in place in Alexandria, we’ve been a nationwide leader in conversions for the past several years with 3.6 million square feet of obsolete office space approved for conversion.
Noteworthy Developments in the Pipeline
| Project | Address | Details |
|
Robinson Terminal North (Rooney Properties) |
500 & 501 N. Union Street | Proposed multi-family residential buildings with 88 units. It will also include ground floor retail/restaurants and public open space. |
|
5001 Eisenhower (Stonebridge) |
5001 Eisenhower Avenue | Office conversion to multi-family residential with workforce housing. The project includes a total of 827 units with 377 reserved for affordable housing as well as a daycare. |
|
Montgomery Center (CarrAmerica) |
300 Montgomery Street | Shopping center conversion to multi-family residential, retail, and an arts and cultural venue. The project includes 327 residential units. |
|
901 N Pitt (Carr Properties) |
901 N. Pitt Street | Office conversion to multi-family residential with 234 units under construction. The project will also include retail and an arts and cultural venue. |
| City Hall/Market Square Renovation | 301 King Street | Renovation of Alexandria’s City Hall and Market Square soon to begin. |
|
Oakville Triangle (Stonebridge/Inova/Tri Pointe Homes) |
Richmond Highway and Swann Avenue | Mixed-use development with an Inova Healthplex, ER, approximately 900 multifamily residential units, 84 townhomes, self-storage, and retail. |
|
Tidelock (C3 Investments/Whitaker Properties) |
1033, 1055, & 1111 N. Fairfax Street | Mixed-use apartment and condo development with a ground-floor arts and cultural anchor and an adjacent retail and arts building. |
|
WestEnd Development (Foulger Pratt/Inova) |
5801 Duke Street | Mixed-use redevelopment of the former Landmark Mall into a hospital with surrounding residential, retail, and medical office space. The project includes over 1,000 residential units and 110 townhomes. |
Office Market Snapshot
| Vacancy Rate | 21.1% |
| Net Absorption | -1,035,822 SF |
| Inventory | 18,921,229 SF |
Alexandria Office Trends
- Office leasing activity continues to decline due to hybrid and remote work.
- Increased vacancy is due in part to the US Patent and Trademark Office’s reduction in footprint.
- Carlyle submarket is experiencing the highest rate of vacancy.
- Tenants are rightsizing into Class A buildings with higher-quality amenities.
Greater Washington Office Trends
- Small uptick in office vacancy year-over-year, with current rate at approximately 21%
- Continued decline in office construction, due to lack of demand, rising construction costs, and uncertainty in financial markets
- Use of office-to-residential conversion policies to help remove obsolete office product
Recent Office Activity
Notable Lease Transactions (over 10,000 SF)
| Address | Date | Tenant | SF Leased |
| 3030 Potomac Avenue | December 2024 | IACP | 35,488 |
| 2331 Mill Road | November 2024, January 2025 | City of Alexandria | 48,378 |
| 100 N. Pitt Street (Banker’s Square) | November 2024 | City of Alexandria | 22,076 |
| 123 N. Pitt Street and 421 King Street | November 2024 | City of Alexandria | 12,311 |
| 1701 Duke Street | January 2025 | Keller Williams (renewal) | 11,220 |
| 1199 N. Fairfax Street | December 2024 | N/A | 10,850 |
Notable Office Sales
| Address | Sale Date | Sale Price | Buyer |
| 1901 N. Beauregard St | August 2024 | $3,920,625 | Blackstreet Capital Holdings, LLC |
| 123 N. Pitt Street | January 2025 | $13,848,698 | Melrose Solomon Enterprises |
| 110 N. Royal Street | January 2025 | $12,031,212 | Melrose Solomon Enterprises |
| 421 King Street | January 2025 | $8,561,898 | Melrose Solomon Enterprises |
| 132 N. Royal Street | January 2025 | $4,408,192 | Melrose Solomon Enterprises |
Retail + Restaurant Update
Retail storefronts are facing lower-than-average foot traffic and sales, but dining is still doing well.
| Retail Openings (since July 2024) | Address |
| Stretch Lab | 3960 King Street |
| Veterinary Emergency Group | 4525 Duke Street |
| Boxwood | 1205 King Street |
| Sunglass Hut | 628 King Street |
| Old Town Books Jr. | 130 S. Royal Street |
| Barg Garments | 108 N. Alfred Street |
| Made in ALX | 415 King Street |
| Eries Interior | 101 S. St. Asaph Street |
| Meraki Head Spa | 320 King Street |
| P.S. The Hive | 301 Cameron Street |
| Salon DeZen | 533 Montgomery Street |
| Old House Provisions | 315A Cameron Street |
| The Dugout | 315 Hooffs Run Road |
| Restaurant Openings (since July 2024) | Address |
| Tom Ramen | 1468B N. Beauregard Street |
| Hypergoat Coffee Roasters | 215 N. Payne Street |
| Narman Restaurant | 682 N. St Asaph Street |
| Honeymoon Chicken | 2495 Mandeville Lane |
| Chewish Deli | 1640 King Street |
| Crumbl Cookies | 3618 King Street |
| Mudhouse Coffee Roasters | 1119 King Street |
| Spice Life Indian Fare | 3614 King Street |
| Cooper Mill | 10 Duke Street |
| Epicure on King | 703 King Street |
| Paris Baguette | 4616 Kenmore Avenue |
| La Tingeria | 3950 Wheeler Avenue |
| Akeno Sushi Bar & Thai | 611 King Street |
| Yami Buffet | 555 S. Van Dorn Street |
| Sharbat Bakery & Cafe | 1640 King Street |
| Shorty’s Deluxe | 2016 Mt. Vernon Avenue |
| Baku Delicious | 711 Pendleton Street |
| Sake Express Japanese Hibachi | 3827 Mt. Vernon Avenue |
Looking Ahead
Challenges
- Potential downsizing in federal government leases will have a trickle-down effect on other commercial businesses.
- Federal employee layoffs may impact the recovering job market. It is estimated that for every federal job lost, two-to-three regional jobs are lost as well.
- Rising vacancy rates across Greater Washington will continue until policy changes allow conversions to occur more quickly and construction costs stabilize.
Opportunities
- Diversification of private sector in the area will provide continued growth in health care, education, and sports tourism.
- New developments will bring jobs, housing, and amenities.
- Virginia Tech Innovation Campus opened in February, which will expand tech education in the region and fuel the next generation of workforce talent.
Unlock Opportunities in Alexandria
Learn more about future growth and development trends by contacting our Real Estate team today. We’re here to help you find your next step in Alexandria’s growing, dynamic market.
