The Northern Virginia commercial real estate market saw 1.6 million square feet of office space occupancy gains in the second quarter, but Amazon’s HQ2, which opened in June to employees, accounted for 2.1 million square feet as employees moved into its Met Park campus in National Landing.
Excluding Amazon’s contribution, the Northern Virginia region would have seen an occupancy loss of 400,000 square feet, according to a report from commercial real estate firm JLL.
It was a slow quarter for new development delivering in Northern Virginia. Herndon saw the largest net occupancy loss last quarter with Volkswagen relocating its North American headquarters to Woodland Pointe to Reston Town Center.
There’s also less new development coming online.
With Amazon’s HQ2 opening and Capital One Financial completing its third campus high rise, JLL reported that there are only four large projects under development in Northern Virginia, all of them along Metro lines including two at Reston Station and two in the Rosslyn-Ballston corridor.
Leasing renewal activity has also slowed. Renewed leases fell to 52% of leases signed in the second quarter, 32% were for relocations and, excluding relocations, just 16% of new leases signed were new.
Tech firms accounted for 35% of second quarter leases, more than half of which were along the Dulles Toll Road area.
Subleases, or space leased by companies looking to offload some of it, have slowed. They rose just 1.1% in the second quarter to 5.8 million square feet, the lowest increase since the start of the pandemic. Subleasing space is older space, with 87% of it signed last quarter in buildings constructed before 2015.
