CW VA Survey 1Q16 PDF

Market Report
Northern Virginia | 1st Quarter 2016
cushmanwakefield.com
Contents
DC Metropolitan Area Overview..............................................................................3

Northern Virginia & Map........................................................................................4-6
Alexandria.........................................................................................................................7
RB Corridor.......................................................................................................................8
Crystal City/Pentagon City........................................................................................9
Tysons Corner....................... .......................................................................................10
Reston/Herndon............................................................................................................11
50-66.................................................................................................................................12
Route 28 South/Chantilly..........................................................................................13
Loudoun County...........................................................................................................14
Appendix..........................................................................................................................15
Tables..........................................................................................................................15-24
Methodology & Definitions......................................................................................25
About Cushman & Wakefield.................................................................................26
Cushman & Wakefield | 2
Washington, DC Metropolitan Area

The first quarter of 2016 marked a continuation of and improvement
on the robust growth experienced over the course of 2015 in the
Washington, DC metropolitan region (DC Metro), and any potential
slowdown in hiring due to the uncertainty of the upcoming
presidential election has not been evident in the employment data.
Quite the opposite, in fact: at the close of March 2016, DC Metro
employers have added over 83,000 total nonfarm payroll jobs since
March of 2015. Note that this is a region that typically adds closer
to 35,000 jobs per year. While the DC Metro regions economy
outperformed that of the United States (U.S.) as a whole from
the 1990s into 2011, budget sequestration and general gridlock
in Washington caused the DC Metro region to lag the U.S. since
the third quarter of 2011. But there is a sign that the region has
returned to normalcy: its economy has now finally eclipsed the
U.S. economy in year-over-year employment growth percentage,
finishing Q1 2016 up 2.3% versus the national growth rate of 1.9%.
Job growth was above average for all jurisdictions in the DC Metro
region. Northern Virginia led the way with 40,700 job gains on a
year-over-year basis. Suburban Maryland accounted for 28,400
new jobs, the District of Columbia contributed 9,200 to the total,
and outlying parts of the region making up the balance. Officeusing jobs including federal employment accounted for 27% of the
total. The largest gains in the region were in the office-intensive
Professional and Business Services sector which accounted for
over 23,000 new positions compared to March of 2015. Growth in
the Financial and Federal Government sectors was modest with
1,730 and 860 new jobs added to payrolls, respectively. In nonoffice using employment, year-over year gains were impressive:
the Leisure & Hospitality posted 16,160 new jobs, Manufacturing &
Construction added 12,620, Retail added 10,540, and Education &
Healthcare sectors posted 8,850 new jobs.
WASHINGTON, DC METRO
Economic Indicators
Q1 15
Q1 16
DC Metro Employment
3.14M
3.22M
DC Metro Unemployment
4.6%
4.0%
U.S. Unemployment
5.5%
5.0%
Q1 15
Q1 16
Overall Vacancy
18.3%
17.8%
Net Absorption
289K
(334K)
Market Indicators
Under Construction
4.6M
6.8M
Deliveries
391K
764K
$36.40
$36.19
Average Asking Rent (FS)
Looking forward, the consensus forecast for job growth in the

region remains bullish with major forecasting firms calling for
above-average job growth of 50,000-60,000 job gains per year
through 2019. With the space-use efficiency trend that has eroded
office demand from job growth the past five years slowly coming
to an end among most of the large occupier sectors in the market,
increased positive demand from each job created can be expected
12-Month
Forecast
Net Absorption/Asking Rent

4Q TRAILING AVERAGE
$39.00
2.0
$38.50
$38.00
$37.50
1.0
$37.00
$36.50
$36.00
0.0
$35.50
$35.00
$34.50
-1.0
2010
2011
2012
2013
Net Absorption, MSF
2014
2015
2016
$34.00
Asking Rent, $ PSF
Washington, DC Metropolitan Area

NET ABSORPTION - DELIVERIES - VACANCY
10.0
20%
8.0
16%
6.0
MSF
The Washington, DC metropolitan regions office market continues

to slowly trend back towards historic norms after several years of
elevated vacancy and flat absorption. The vacancy rate for the
region ended the first quarter of 2016 at 17.8%, down from 18.3% a
year ago. Overall net absorption was basically flat for the quarter
at negative 334,000 square feet (sf) for the DC Metro region. The
submarkets that continue to outperform in the District of Columbia
and in the suburbs all offer proximity to transit and retail amenities
in a mixed-use environment. New supply to market continues to
be well below historic norms. The average new supply to market
post-recession has fallen to 2.1 million square feet (msf) 3.3 msf
less than the average from 2000-2009. 2018 has the potential
to be the next big supply year based on projects currently in the
pipeline driven particularly by development and redevelopment in
the downtown core.
12-Month
Forecast
4.0
12%
2.0
8%
0.0
-2.0
4%
-4.0
-6.0
Vacancy Rate
Strong Economic Showing in Q1 2016
05
06 07 08 09
Net Absorption
10 11 12 13 14 15
Deliveries
Vacancy Rate
16
0%
in the midterm.
cushmanwakefield.com | 3
Northern Virginia
Economy
Market Indicators
1Q 15
The Northern Virginia economy continued the momentum seen
12-Month
Forecast
1Q 16
in 2015 into the first quarter of 2016. Unemployment remains
Overall Vacancy
21.7%
21.4%
extremely low, with the City of Alexandria and Arlington, Fairfax
Net Absorption
(50K)
(479K)
and Loudoun counties all reporting jobless rates below 3.5%.
Under Construction
2.7M
3.6M
Preliminary numbers from the Bureau of Labor Statistics show
Deliveries
that Northern Virginia added 11,600 net new nonfarm payrolls
Average Asking Rent
199K
160K
$33.24
$32.14
of the 16,100 total nonfarm jobs created in the Washington, DC

Metropolitan region during January and February of 2016. All office-
Net Absorption/Asking Rent
using employment sectors posted gains in the first two months of
4Q TRAILING AVERAGE
the year, with Professional and Business Services leading the way
with 2,400 jobs added and the Information, Federal Government,
and Financial Services sectors following with 425, 330 and 240 net
new jobs, respectively.
400
$34
200
$33
$32
$31
-200
$30
-400
Market Overview
-600
The Northern Virginia office market registered negative 479,000
-800
$29
$28
2010
square feet (sf) of net absorption in the first quarter of 2016
2011
2012
2013
2014
Net Absorption, SF (thousands)
2015
2016
$27
Asking Rent, $ PSF
as several large scale move-outs by federal contractors hit the

market. The overall vacancy rate stood at 21.4%, down from 21.7%
a year ago but up from 21.2% at year-end 2015.
Overall Vacancy
24%
Renewals dominated leasing activity in the first quarter, accounting
22%
for seven of the top 10 transactions. The most significant deal was
20%
that of tech company Opower, which committed to a 63,000sf prelease at 2311 Wilson Boulevard in Arlingtons Courthouse
submarket. Their 175,000-sf future headquarters building is
18%
16%
scheduled to be delivered by Carr Properties in mid-2018. The
14%
competition to land this tech company that services the utility
12%
industry has endured for years and spanned several jurisdictions;

ultimately, the Commonwealth of Virginia was successful in
10%
2010
2011
2012
2013
2014
2015
2016
keeping the company within its borders with the help of a $1

million incentive from the Governors Opportunity Fund.
Large Blocks of Contiguous Space

25-50k SF
Several large-scale developments continued or entered into
Loudoun County
50-100k SF
construction in the first quarter. What will be the largest office
Route 28 South
100-150k SF
building in the region Capital Ones 1 msf headquarters
Springfield/Newington
150-200k SF
expansion now rises above ground level and is set for a 2018
50/66
completion. In addition, Comstock Partners began construction
Reston/Herndon
of their 350,000 sf speculative office building at Wiehle-Reston
Tysons Corner
East Metro Station, as yet another Silver Line station continues to
Arlington
add density. Lerner Enterprises speculative 475,000-sf building,
Alexandria
1775 Tysons Boulevard, and MITREs 340,000-sf build-to-suit at

7598 Colshire Drive, should be delivering by mid-year.
200k+ SF
20
40
60
80
# of Blocks
Northern Virginia Office Submarkets

Northern Virginia Office Submarkets
LOUDOUN
LOUDOUN
PHASE II
2016
267
MARYLAND
metro
ROUTE
772
metro
ROUTE
606
metro
RESTON
RESTON
267
INNOVATION
CENTER
WASHINGTON
DULLES
INTERNATIONAL
AIRPORT
PHASE I
metro
HERNDON
metro
RESTON TOWN
CENTER
metro
267
WIEHLE - RESTON
EAST
TY
UN
TY
CO
UN
CO
X
SPRING
HILL
FA
OU
WASHINGTON, DC
metro
IR
UD
123
28
Y
NT TY
OU UN
X C CO
FA N
IR TO
FA ING
L
R
A
FA
LO
DI
ST
DULLES
AIRPORT
D
AN
YL IA
AR IN
M IRG
V
metro
RI MA
RY
CT
OF LA
N
D
CO
LU
M
BI
A
HERNDON
HERNDON
LOUDOUN COUNTY
50
FAIRFAX COUNTY
GREENSBORO
metro
metro
metro
MCLEAN
TYSONS
CORNER
286
ARLINGTON COUNTY
TYSONS
metro
495
WEST FALLS
CHURCH
metro
EAST FALLS
CHURCH
VIR
metro
29
66
66
metro
metro
metro
BALLSTON
ALGONKIAN P
50
FAIRFAX CENTER
metro
IA
CLARENDON
VIRGINIA SQUARE - GMU
R-B CORRIDOR
495
VIENNA
66
AR
28
29
GIN
ROSSLYN
COURT HOUSE
metro
DUNN LORING/
MERRIFIELD
123
ROUTE 28 SOUTH
metro
50
50
metro
PENTAGON
CRYSTAL CITY
MERRIFIELD
AY
KW
29
395
RONALD
REAGAN
WASHINGTON
NATIONAL
NATIONAL
AIRPORT
AIRPORT
metro
236
I-395 CORRIDOR
286
FAIR FAX COUN

TY
PRINCE WILLIAM C
O
POTOMAC
RIVER
metro
VAN DORN
STREET
UNT Y
EISENHOWER
AVENUE
metro
KING STREET
metro
OLD TOWN
ALEXANDRIA
EISENHOWER
AVENUE
PRINCE WILLIAM COUNTY
95
metro
FRANCONIA/
SPRINGFIELD
SPRINGFIELD/
NEWINGTON
Top Transactions
Key Lease Transactions 1Q 2016
PROPERTY
SF
TENANT
TRANSACTION TYPE
SUBMARKET
14370 Newbrook Drive
160,000
CACI
Renewal
Route 28 South/Chantilly
14700 Lee Road
84,700
General Dynamics
Renewal
2311 Wilson Boulevard
63,000
Opower
Prelease
Courthouse/Clarendon/VA Square
251 18th Street S
53,900
Chemonics International
New Lease
Crystal City/Pentagon City
Key Sales Transactions 1Q 2016

PROPERTY
SF
SELLER/BUYER
PRICE
SUBMARKET
McKinley & Pierce Buildings
574,558
Dividend Cap Diversified Prop Fund / Northop

Grumman
$158,400,000
Tysons Corner
Pacific Corporate Park
696,387
Gramercy Property Trust / Beacon Capital Partners
$145,500,000
Route 28 North
Mission Ridge I & II
312,203
Lasalle Investment / Salus Property
$96,000,000
Route 28 South
600,906
NYSCRF JV Liberty Property Trust / Normany Real

Estate Partners JV Siguler Guff
$80,500,000
Reston
Presidents Park I, II, and III
Northern Virginia Office Market
Northern Virginia Office Market
Net Absorption - Deliveries - Vacancy, First Quarter 2016
Inventory and Vacancy by Submarket, First Quarter 2016

30
30%
25
25%
20
20%
15
15%
10
10%
5%
15%
10%
-1
-3
5%
2003
2004
2005
New Deliveries
2006
2007
2008
2009
2010
Net Absorption
2011
2012
2013
2014
2015
Vacancy Rate
2016
0%
MSF
20%
Alexandria
RB
Crystal City Tysons
Corridor
Leased
Reston/
Herndon
Vacant
50/66
Route 28 S Loudoun
Chantilly
Vacancy Rate
25%
Vacancy Rate
Square Feet (Millions)
0%
Vacancy Rate
Alexandria
Market Indicators
*Arrows = Current Qtr Trend
Vacancy
24.7%
Net Absorption
Under Construction
35,500 SF
720,000 SF
Deliveries
Asking Rent
0 SF
$31.13 FS
After a very slow fourth quarter, Alexandria experienced an
Net Absorption Deliveries Vacancy
sized deals in the submarket were signed. Advanced Resource

by Coggins 15,669 sf new lease at 44 Canal Center Plaza and
the AMCPs (Academy of Managed Care Pharmacy) new deal for
15,585 sf at 675 North Washington Street. In a win for the I-395
Corridor section of Alexandria, Northern Virginia Community
College (NVCC) signed a new lease for 15,000 sf at 4700 King
Street.
Square Feet, 000s
Technologies 18,000-sf renewal at 1555 King Street was followed
800
30%
600
25%
400
20%
200
15%
10%
-200
5%
-400
-600
Old Town continues to boast the lowest vacancy rate of any

submarket in NoVA. Its overall vacancy rate of 9.1% is significantly
less than that of the next-lowest submarket, Reston/Herndon
Vacancy Rate
increase in deal activity in Q1 2016 as several relatively large-
06
07
Net Absorption
08
09
10
Deliveries
11
12
13
Vacancy Rate
14
15
Q1
2016
0%
Old Town Vacancy Rate
(17.1%). The I-395 and Huntington/Eisenhower submarkets

continue to struggle with high vacancy rates of 37.5% and 41.4%,
respectively. Rental rates in Alexandria have increased by a slight
New Leasing Activity
1.8% from a year ago, due mainly to an uptick in rents for Class
1.20
A space. Absorption was relatively unchanged, with Alexandria

experiencing only a handful of small move-ins and move-outs.
1.00
0.80
Avenue (across from the new National Science Foundation HQ)
MSF
Rubenstein Partners is gutting and renovating 2461 Eisenhower

and rebranding it Carlyle Tower. This 14-story, 335,000-sf office
0.60
0.40
building is undergoing a 15-month transformation into a Class

A office building and will redeliver in early 2017. The General
0.20
Service Administration has delayed the Transportation Safety
0.00
Administrations (TSA) move to its new headquarters until mid2020. TSA had originally planned to consolidate and relocate by
2006
2007
2008
2009
Q1
Spring 2018, but now will likely have to extend at 601 and 701 S 12
2010
2011
Q2
Q3
2012
2013
2014
2015
2016
Q4
St in Pentagon City.
Advanced Resource Technologies executed a sale-leaseback
Asking Rent
$41
32,003-sf building sold for $9.47M ($296/sf) and was 80% leased
$39
at the time of sale, to the seller and a variety of smaller tenants.
Outlook

Vornado/Charles E. Smith is currently marketing their

Skyline portfolio for sale. The rare opportunity to buy
2.45 million square feet has presented itself through
this seven building portfolio. These properties will be
a great value play for future investors.
Full Service PSF
with Bernstein Management Corporation at 1555 King Street. The
$37
$35
$33
$31
$29
$27
$25
2011
2012
Class A
2013
2014
2015
Q1 2016
Class B
RB Corridor
23.3%
Net Absorption
Under Construction
38,500 SF
552,800 SF
The Rosslyn-Ballston Corridor (RB Corridor) has experienced

a rapid increase in vacancy over the last few yearsfrom midsingle-digits in 2011 to over 20% by the end of 2013. The climb in
vacancy was due primarily to contractor and GSA downsizings
and relocations, and to a lesser degree the delivery of 1812 North
Moore Street. Vacancy in the Corridor peaked at an all-time high
of 24.4% in Q2 2015 and has declined slightly to its current 23.3%.
Rosslyns vacancy currently stands at 29.8%, the highest of any
submarket outside of I-395 and Eisenhower Avenue.
Ballstons Class A vacancy rate of 14.6% is the lowest of any
submarket besides Old Town, and the 21.2pp difference between
class A (14.6%) and class B (35.8%) vacancy is wider than in any
other NoVA submarket. This difference illustrates the dichotomy
between Class A and commodity space and their relative
desirability among tenants in NoVA.
The most notable development news of the quarter was OPowers
announcement of its 63,000-sf prelease at the proposed 2311
Wilson Boulevard in Courthouse. Its commitment will allow
construction of the 175,000-sf, 8-story building to proceed, with
anticipated delivery at the end of 2017, after which the company
will be relocating from its current space at 1515 North Courthouse
Road. The largest deal of Q1 2016 was Sinclair Television Groups
100,000 sf renewal in Monday Properties Twin Towers buildings
(1100 and 1101 Wilson Boulevard). Source Office Suites renewed
for 32,612 sf at Colonial Place I, SMDI signed a new 28,315-sf lease
at 1101 Wilson Boulevard, and Innovative Defense Technologies
signed a 25,073-sf relet at 4401 Wilson Boulevard. Leasing activity
for the quarter came in at a modest 176,701 sf, with 166,084 sf
(94.0%) occurring in class A buildings.
1,000
Arlingtons ability to keep OPower within the county

marks a successful application of the Commonwealth
Opportunity Fund, which contributed $1 million in
incentives as the company committed to adding jobs
and investing in capital within the county. The County
Board is now considering the creation of smaller
incentives funds targeted towards smaller companies
in high-growth sectors such as cybersecurity and data
analytics, in order to further combat high vacancy.
25%
800
20%
600
400
15%
200
0
10%
-200
-400
5%
-600
-800
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
Vacancy Rate
Q1
16
0%

1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2006
2007
2008
2009
Q1
2010
2011
Q2
Q3
2012
2013
2014
2015
2016
Q4
Asking Rent
Full Service PSF
Outlook
$40.72 FS
0 SF
The U.S. Coast Guard vacated 89,451 sf at 4200 Wilson

Boulevard in a consolidation to its St. Elizabeths campus, ESI
International vacated 51,000 sf at 901 North Glebe in a move
to 4301 North Fairfax Drive, and Westwood College departed
39,216 sf at 4420 North Fairfax Drive, as for-profit colleges
continue their downsizing. Sands Capital moved into 78,000 sf
at 1000 Wilson Boulevard as it switched between Twin Towers,
GW Medical Associates took 48,700 sf at 3811 North Fairfax
Drive in Courthouse, and MakeOffices occupied 39,837 sf at 3100
Clarendon Boulevard.
Shooshan Company and Brandywine are changing plans for
4040 Wilson to allow for eight floors of office topped by 12 floors
of residential. This change spurred a prelease for two floors from
Vida Fitness, and will reduce the desired 40% RBA office prelease
to 80,000 sf.
Asking Rent
Deliveries
Vacancy Rate
Vacancy
Square Feet, 000s
MSF
Market Indicators
$56
$54
$52
$50
$48
$46
$44
$42
$40
$38
$36
$34
$32
2011
2012
2013
Class A
2014
2015
Q1 2016
Class B

Vacancy
Net Absorption
Under Construction
Deliveries
Asking Rent
22.2%
(93,700) SF
0 SF
0 SF
$37.69 FS
Since peaking at 26.8% in Q4 2013, vacancy in Crystal City has

slowly declined to its current 22.9%. The submarket experienced
net negative absorption in Q1 2016. NATO and MB Consulting
moved into 30,000 sf and 6,000 sf, respectively, at 2511 Jefferson
Davis Highway, but this was more than offset by Lockheed
Martins 85,535 sf move-out at 1550 Crystal Drive.
The largest relet deal of the quarter was in Crystal City:
international development consultant Chemonics International
signed for 53,929 sf at 251 18th Street South. The second largest
deal of Q1 2016 was NATO Sea Sparrows relocation from 727
23rd Street South to 30,700 sf at nearby Presidential Tower. Two
associations the American Intellectual Property Law Association
500
25%
20%
-500
15%
-1,000
10%
-1,500
5%
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
Vacancy Rate
0%
Q1
16

2.50
2.00
1.50
MSF
WeLive, the residential counterpart to WeWork, has officially

opened at 2221 South Clark Street, joining other entrepreneurial
startup ventures in the area such as Eastern Foundry, 1776, and
TechShop.
30%
-2,000
and the Association for Professionals in Infection Control and

Epidemiology signed two new leases for 12,000 sf each at 1400
Crystal.
Crystal Citys reliance on GSA users and contractors is once
again evident. The Drug Enforcement Administration (DEA),
whose 503,776-sf lease at 600 and 700 Army Navy Drive expires
in September 2018, is beginning the search for a new home in
the 478,607 sf to 575,000 sf range. Between the DEA and the
Transportation Safety Administration (TSA) Crystal City could
potentially lose around 1 msf of GSA tenants in 2018.
1,000
Vacancy Rate
Square Feet, 000s
Market Indicators
1.00
0.50
0.00
2006
2007
2008
2009
Q1
2010
Q2
2011
Q3
2012
2013
2014
2015
2016
Q4
Asking Rent
$44
Outlook

The Bartlett, the largest multifamily project under

construction in NoVA, is due for delivery in mid-2016.
The area surrounding Pentagon City Mall should see
continuous revival over the next few years, as the area
has several other multifamily projects in the planning
stages.
Full Service PSF
$42
$40
$38
$36
$34
$32
2011
2012
2013
Class A
2014
2015
Q1 2016
Class B
Tysons Corner
Net Absorption
Under Construction
Deliveries
Asking Rent
(97,700) SF
1,790,809 SF
0 SF
$31.65 FS
Tysons current overall vacancy rate is 19.3%. That is slightly above

its five-year average of 18.8% and marking a slight decline from
the 20.4% rate in Q1 2015 which was the highest vacancy rate
since the post dot-com bubble years of 2002-2003. Direct rental
rates have decreased by 4.5% from the first quarter of last year, as
higher-priced, Metro-accessible, Class A product has continued
to capture new leasing and experienced few move-outs.
The submarket, along with the rest of Northern Virginia, registered
low leasing volume of 132,071 sf in Q1 2016. Watt Tieder Hoffar
Fitzgerald signed a new lease for 32,620 sf at Greensboro Station
I, PAE Shield Acquisition Company expanded by 18,117 sf at 7799
Leesburg Pike, Enterprise Information Services renewed for 16,572
sf at 1945 Old Gallows Road, and Arrowpoint Corporation signed
for 14,371 sf at 8260 Greensboro Drive. The majority of deals were
for less than 10,000 sf and consisted mainly of consulting and
technology companies.
Pentagon Federal Credit Union moved into 137,135 sf at 7940
Jones Branch, the building it acquired from LMI and MRP
Realty in Q4 2015. Washington Gas occupied 51,591 sf at 8614
Westwood Center Drive, and new owner MRP Realty plans on
attracting further activity through the creation of WeWorkstyle shared office space, the first of its kind in Tysons. Sagenet
vacated all 142,932 sf at 1750 Old Meadow Drive as it relocates
its Washington DC operations to Reston. Owner Matan Realty
plans to renovate the building which was originally built in 1985.
The GSA vacated 31,919 sf at 2070 Chain Bridge Road, PwC gave
back a floor (26,789 sf) at 1800 Tysons Boulevard, as did Palantir
(25,598 sf) at 1660 International Drive.

1,000
25%
800
20%
600
Vacancy Rate
Vacancy
19.3%
Square Feet, 000s
400
15%
200
0
10%
-200
-400
5%
-600
-800
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15 Q1 16
0%
Vacancy Rate

3.50
3.00
2.50
MSF
Market Indicators
2.00
1.50
1.00
0.50
0.00
MITREs 340,000-sf build-to-suit and Lerners 476,000-sf

speculative office building at 1775 Tysons Boulevard are due to
deliver by mid-2016. Capital One Towers 980,000 sf have begun
to rise above ground level, with completion scheduled for 2018.
2006
2007
2008
2009
Q1
2010
2011
Q2
Q3
2012
2013
2014
2015
2016
Q4
Asking Rent
Outlook

In Northern Virginia, Class A office buildings

accounted for 74.2% of all leasing activity (renewals
and new leases) by square footage in 2015. However,
only 50.1% of Tysons office inventory is considered
Class A and the submarket contains 41 buildings built
before 1980. With tenants flocking to high-quality, onMetro buildings, especially professional and business
service firms which dominate Tysons, an increase in
conversions and renovations may be likely in the near
future.
Full Service PSF
$50
$45
$40
$35
$30
$25
2011
2012
Class A
2013
2014
2015
Q1 2016
Class B
Reston/Herndon
Vacancy
17.1%
Net Absorption
Under Construction
Deliveries
Asking Rent
(195,900) SF
354,900 SF
0 SF
$30.22 FS
Since hitting a five-year low of 14.9% in Q1 2014, vacancy in

Reston/Herndon has hovered in the 15% to 17% range and
currently sits at 17.1%. Direct weighted asking rates have remained
virtually unchanged for all building classes over the past 24
months. The largest lease in Reston/Herndon in Q1 2016 was that
of the Virginia Spine Institute which signed for 32,779 sf at 11800
Sunrise Valley Drive.
Fannie Mae occupied the entirety of One Reston Crescent, which,
like Two Reston Crescent, is now fully occupied. Brookfield
Properties, owner of these two buildings, is seeking rezoning
of adjacent land (site of demolished 12010 Sunrise Valley Drive)
from Industrial to Planned Residential Community. Brookfield is

2,500
25%
2,000
20%
1,500
The New York State Common Retirement Fund (Liberty Property

Trust) sold Presidents Park I/II/III to Normandy Real Estate
Partners for $80.5M ($134/sf) in March. The buildings were ~60%
occupied at time of sale. Goldman Sachs purchased 13600 &
13650 Dulles Technology Drive (Three & Four Dulles Tech Center)
from Dallas-based Lone Star Funds for $55M ($243/sf). Three
Dulles Tech is fully leased to Cisco, and Four Dulles Tech is ~70%
leased to multiple tenants. AEW Capital Management sold 205
Van Buren (Atrium at Worldgate) to Cambridge Property Group
in March for $19.65M.
10%
500
5%
0
-500
proposing 2,260 residential units, 1.18 msf of office, 64,000+ sf

of retail, and a potential 160-bed hotel on this site mile south of
the future Reston Town Center Metro station.
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
0%
Q1
16
Vacancy Rate

3.00
2.50
2.00
MSF
Quadrant signed an expansion for 23,031 sf and SOS International

moved into its 21,000-sf expansion at 1881 Campus Commons
Drive, bringing this building to 100% occupancy. Strayer vacated
and placed on the sublease market 87,414 sf at 2303 Dulles
Station Boulevard, continuing the trend of for-profit college
downsizing. Scitor vacated its sublease space at 12010 Sunset
Hills, and Stanley Martin vacated 31,112 sf at 11111 Sunset Hills Road.
With Booz Allen Hamilton having vacated the 396,490-sf 13200
Woodland Park Drive, new owners Federal Capital Partners plan
a full renovation of the building, originally built in 2002.
15%
1,000
Vacancy Rate
Square Feet, 000s
Market Indicators
1.50
1.00
0.50
0.00
2006
2007
2008
2009
Q1
2010
2011
Q2
Q3
2012
2013
2014
2015
2016
Q4
Asking Rent
$32
Outlook

The Wiehle-Reston East Metro Station area is in a

unique position to be a first-mover before other
Silver Line stations begin service in 2020. Comstock
Partners has begun construction of its 350,000sf speculative office building without a prelease, as
many office properties within mile of the Metro
station have successfully pushed rents upwards and
decreased vacancy.
Full Service PSF
$30
$28
$26
$24
$22
$20
2011
2012
Class A
2013
2014
2015
Q1 2016
Class B
50/66
Vacancy
19.9%
Under Construction
Net Absorption
0 SF
(220,700) SF
Merrifield/Route 50
Vacancy in the Merrifield/Route 50 submarket declined from
20.2% in Q4 2015 to 17.4% in Q1 2016 as Fairfax County Schools
took occupancy at 8270 Willow Oaks Corporate Drive, a
relocation from 3877 Fairfax Ridge Road. The GSA accounted
for the two largest deals of the first quarter as two immigration
entities ICE and USCIS renewed for 55,000 sf and 49,000
sf at 2675 and 2677 Prosperity Avenue, respectively. These
Metro-accessible buildings are fully leased. Kingfisher Systems,
a contractor, renewed for 10,500 sf and expanded by another
10,456 sf at 3110 Fairview Park Drive. This is a small win for the
Fairview Park area, as this section of the Merrifield submarket
east of I-495 has been hit by a rash of move-outs, most notably
Reed Smith which relocated to Tysons, Nobilis which moved to
Reston, and eventually General Dynamics, which plans to relocate
in the next several years to Reston.
Outlook

The Fairfax/Oakton/Vienna submarkets current

vacancy rate of 21.6% is its highest level in over
10 years. With few public transit options and low
developer interest, the submarket must continue to
rely on its proximity to Fairfax County Court and other
local government operations.
$24.92 FS
400
25%
200
20%
15%
-200
10%
-400
5%
-600
-800
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
0%
Q1
16
Vacancy Rate

2.00
1.80
1.60
1.40
MSF
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 Q2 Q3 Q4
Asking Rent
$34
$32
Full Service PSF
Rockville-based Lerner Corporation sold a pair of buildings in Q1

2016 10530 Rosehaven Street and 3211 Jermantown Road to
A&A Investment Group of Reston. 3211 Jermantown Road is fully
leased to General Dynamics through 2019, and 10530 Rosehaven
Street is ~40% leased to multiple users. The combined 279,293 sf
sold for $31.1M ($111/sf).
Asking Rent
0 SF
Fairfax/Oakton/Vienna
The submarket experienced several move-outs in Q1, resulting
in 406,138 sf of negative absorption. SRA International vacated
the entirety of 4300 and 4350 Fair Lakes Court (290,000 sf
total) as it finalizes a headquarters move to Westfields office
park in Chantilly. The contractor is moving to an open floor plan
in a reduction of its sf/user ratio. ManTech vacated and listed
for sublease 46,129 sf at 12015 Lee Jackson Highway, and Pulte
Homes vacated 34,655 sf at 10600 Arrowhead Drive in a move
to Hunters Branch. Leasing activity in the submarket consisted
of 29,868 sf of renewals, the largest of which was a 14,003 sf
extension by Data Systems Analysts at 10300 Eaton Place,
followed by an 8,129 sf extension by Brown Automotive Group at
12500 Fair Lakes Circle.
Deliveries
Vacancy Rate
Square Feet, 000s
Market Indicators
$30
$28
$26
$24
$22
2011
2012
2013
Merrifield/Route 50
2014
2015
Q1 2016
25.0%
Net Absorption
Under Construction
Deliveries
Asking Rent
(23,200) SF
0 SF
150,000 SF
$24.72 FS
In Q1 2016, the Route 28 South submarket was home to a slate of

large long-term renewals, reaffirming the view that we are at the
end of a contractor downsizing cycle. CACI renewed for 159,987
sf at 14370 Newbrook Drive and 60,530 sf at 14360 Newbrook
Drive, and General Dynamics renewed for 84,652 sf at 14700 Lee
Road.
Overall vacancy, at 25.0%, was up 0.8 pp from Q1 2015 and 0.2
pp from Q4 2015. Vacancy in the submarket hit an all-time high
of 26.1% in Q2 2015. Outside of the I-395 Corridor, the submarket
has the highest sublease vacancy rate of 2.1%, as committed
users find it difficult to fill their preexisting obligations in the carcentric, contractor-heavy submarket. After hitting the $30 psf
mark in 2009, direct rental rates declined steadily before settling
in the $26 psf range. Commodity space in the submarket is not in
high demand: Class B vacancy is 27.1% and direct rental rates for
Class B product in Route 28 South average $23.26 psf, lower than
in any other NoVA submarket except Loudoun. However, with
the cycle of contractor downsizing nearing an end and federal
procurement expected to increase, the number of massive blocks
of vacant space coming back to market should be slowing down.
Boston-based Federal Partners sold 4755 Meadow Wood Lane
to Chicago-based Boyd Watterson for $31.8M ($306/sf). The
building is fully leased to the GSA. Carr Properties sold 14200
Park Meadow Drive (Victory Point) to Bethesda-based Goldstar
Group for $16.3M ($111/sf). Goldstar has traditionally focused
on multifamily assets, and this is their first office transaction in
several years.

1,200
While not imposing a significant impact on overall

market vacancy, several smaller tenant moves in
Q1 2016 may provide insight into future trends. ATA
Engineering doubled its current footprint at 13921 Park
Center Road, expanding by 6,886 sf, and Millenium
Space Systems signed a 6,750 sf new lease at 14425
Penrose Place joining other aerospace companies
in the Route 28 Corridor such as Inmarsat, Stellar
Solutions, and Ball Aerospace. These companies are
well-positioned near SpaceX and Orbital ATK, the two
market leaders which continue to win contracts for
public and private spaceflight and which rely on many
small engineering and parts distribution companies
for their final products.
600
20%
400
15%
200
0
10%
-200
-600
5%
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
0%
Q1
16
Vacancy Rate

1.20
1.00
0.80
0.60
0.40
0.20
0.00
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 Q2 Q3 Q4
Asking Rent
$30
$28
Full Service PSF
25%
800
-400
4850 Stonecroft Boulevard, a 160,000 sf build-to-suit project,

has delivered and joins identical 4970 Stonecroft Boulevard
next door. These two buildings are believed to be leased to a
confidential GSA tenant.
Outlook
30%
1,000
Vacancy Rate
Vacancy
Square Feet, 000s
MSF
Market Indicators
$26
$24
$22
$20
$18
2011
2012
Class A
2013
2014
2015
Q1 2016
Class B
Loudoun County
Net Absorption
Under Construction
Deliveries
Asking Rent
33,200 SF
64,800 SF
0 SF
$26.13 FS
Absorption in Loudoun County for each of the past five years has
averaged 66,703 sf. Overall vacancy has trended downward from
a high of 27.8% in Q1 2012 to a current 19.7%, a 2.0 pp decline
just from the previous quarter. Class A vacancy, at 17.0%, is at its
lowest point in 10 years.
The largest deal of the quarter was a renewal by Asurion, a phone
insurance company, for 82,660 sf at 22894 Pacific Boulevard.
On the heels of this was the 74,200-sf renewal by Orbital ATK at
21700 Atlantic Boulevard. The aerospace company recently won
both a NASA contract to resupply the International Space Station
and an Air Force contract for the development of engines.
JK Moving, the largest privately owned mover in the region, plans
to develop and move its headquarters to a 42 acre site at the
Northeast corner of Route 28 and Route 606 (Old Ox Road) it
acquired in November. The plans call for one 80,000 sf office
building and four 110,000 sf warehouse buildings.
Beacon
Capital
Partners
acquired
Pacific
Corporate
Park,
four
Raytheon-occupied
buildings
in
Dulles
(22110/22260/22265/22270 Pacific Boulevard), from Gramercy
Property Trust for $145.5M ($209/sf). Their 696,377 sf are
86% leased to Raytheon for the next 10 years. Two land parcels
totaling 22 acres are also included in the sale, and represent
potential future expansion space for Raytheon. The sale is part
of Gramercys plan to dispose of select single- and multi-tenant
office assets.

600
25%
500
20%
400
300
15%
200
10%
100
5%
0
-100
Vacancy Rate
Vacancy
19.7%
Square Feet, 000s
06
07
08
09
10
Net Absorption
11
12
13
Deliveries
14
15
0%
Q1
16
Vacancy Rate

0.90
0.80
0.70
0.60
MSF
Market Indicators
0.50
0.40
0.30
0.20
0.10
Illinois-based Alter Group sold 128,477-sf Loudoun Gateway V

for $20M ($156/sf) to New York-based Crown Properties. Carr
Properties sold 102,422-sf Loudoun Gateway IV to Snider &
Weinstein, a DC-based law firm, for $14.4M ($141/sf). Snider plans
on occupying half of the building and potentially expanding into
the rest.
0.00
2006
2007
2008
2009
Q1
2010
2011
Q2
Q3
2012
2013
2014
2015
2016
Q4
Asking Rent
$28
Outlook
With an abundance of available development
opportunities and cheaper land prices than in other
submarkets, several companies are moving ahead
on owner-occupied or build-to-suit projects in
Loudoun. JK Movings decision to build a 520,000 sf
headquarters on company-owned land joins GEICOs
commitment to constructing a 32,675 sf office and
training center on three acres it owns in Ashburn. In
the same vein, EITs 64,800 sf build-to-suit is currently
under construction at 309 Kellys Ford Plaza with a
delivery scheduled for late 2016.
Full Service PSF
$26
$24
$22
$20
$18
$16
2011
2012
Class A
2013
2014
2015
Q1 2016
Class B
Appendix
Table Summaries
Metro Washington Office
Market Summary
15
Employment Data
15
Office Availability, Vacancy,
and Net Absorption
16
Metro Washington Office Market Summary: First Quarter 2016p

Total
Inventory
Total Space
Vacant
Vacancy
Rate
Q1 2016
Absorption
YTD
Absorption
Washington, DC
109,130,610
12,868,353
11.8%
4,297
4,297
Northern Virginia
130,440,659
27,946,515
21.4%
(479,132)
(479,132)
Suburban Maryland
56,647,416
11,797,419
20.8%
141,012
141,012
Regional Totals
296,218,685
52,612,287
17.8%
(333,823)
(333,823)
Trailing 12-Month Data

17
Historical Year-End Data
18
Metro Washington Current Employment Data

Non Farm
Employment
(Jan-Mar 2015)
Non Farm
Employment
(Jan-Mar 2016p)
Jobs Added/
Lost*
Percent Change
Washington, DC
764,500
774,667
10,167
1.3%
Northern Virginia
1,388,133
1,424,433
36,300
2.6%
968,200
990,867
22,667
2.3%
3,144,900
3,217,900
73,000
2.3%
Market Statistics by Class

19-20
Survey of New Office Space
by Submarket
21-24
Methodology & Definitions
25
Suburban Maryland
Regional Totals
SOURCE: U.S. Bureau of Labor Statistics (Not seasonally adjusted)

* Average per year to date
p - preliminary
3,899,865
11,053,908
965,549
15,229,791
7,095,248
10,945,402
32,211,020
21,265,618
7,991,666
6,058,050
2,761,709
16,811,425
49,022,445
1,369,626
6,608,194
9,509,467
22,573,953
24,290,837
8,675,922
3,268,420
76,296,419
16,117,661
5,121,795
81,418,214
130,440,659
Ballston
Arlington County
RB Corridor
Old Town
I-395 Corridor
Huntingon/Eisenhower
City of Alexandria
Inside the Beltway
Annandale/Baileys
Merrifield/Route 50
Tysons Corner
Reston/Herndon
Rt 28 S/Chantilly
Springfield
Fairfax County
50-66 Corridor
Loudoun County
Outside the Beltway
Northern Virginia
1,662,816
1,190,996
42,339
147,135
1,148,657
37,159
182,234
470,577
298,968
67,475
79,660
12,584
471,820
245,126
8,945
162,949
73,232
148,006
226,694
78,688
54,101
49,401
44,504
Sublet Space
Available
27,946,515
16,420,787
1,007,888
3,209,720
15,412,899
1,084,518
2,172,947
4,147,312
4,366,779
2,058,741
1,150,979
431,623
11,525,728
4,144,991
1,142,236
2,271,553
731,202
4,953,074
7,380,737
2,427,663
1,499,281
1,026,165
2,427,628
Total Space
Available
21.4%
20.2%
19.7%
19.9%
20.2%
33.2%
25.0%
17.1%
19.3%
21.6%
17.4%
31.5%
23.5%
24.7%
41.4%
37.5%
9.1%
23.3%
22.9%
22.2%
21.1%
18.6%
28.1%
Vacancy
Rate
(296,520)
(271,827)
49,604
(193,145)
(321,431)
(15,188)
25,932
(24,092)
(96,393)
(353,792)
160,647
(18,545)
(24,693)
36,978
14,179
6,433
16,366
9,402
(61,671)
(71,073)
(230,464)
144,452
95,414
New/Relet
Absorption
(182,612)
(187,583)
(16,406)
(27,534)
(171,177)
78,533
(49,105)
(171,796)
(1,275)
(52,346)
24,812
4,971
(1,467)
3,534
7,953
(12,954)
29,099
6,438
(22,661)
20,623
27,696
(19,220)
Sublet
Absorption
(479,132)
(459,410)
P - Preliminary

33,198
(220,679)
(492,608)
63,345
(23,173)
(195,888)
(97,668)
(406,138)
185,459
(18,545)
(19,722)
35,511
17,713
14,386
3,412
38,501
(55,233)
(93,734)
(209,841)
172,148
76,194
Total Net
Absorption
1 The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets.

2 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties

3 The 50/66 corridor is comprised of Merrifield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets.

****New Space Available and New Space Absorption based on buildings delivered 2005 to present
26,283,699
3,062,585
14,264,242
1,047,359
1,990,713
3,676,735
4,067,811
1,991,266
1,071,319
419,039
1,133,291
2,108,604
657,970
4,805,068
7,154,043
2,348,975
1,445,180
976,764
5,531,747
Courthouse/
Clarendon/Virginia Square
2,383,124
8,638,623
New/Relet Space
Available
Rosslyn
Total Inventory
Office Availability, Vacancy, and Net Absorption, First Quarter 2016p
Appendix
8,613,043
8,613,043
5,531,747
7,076,618
10,945,402
32,166,810
21,221,408
8,191,666
6,058,050
2,742,707
16,992,423
49,159,233
1,358,705
6,608,194
9,505,603
23,240,699
24,690,837
9,242,182
3,268,420
77,914,640
16,113,797
5,121,795
83,036,435
132,195,668
Rosslyn
Courthouse/
Clarendon/
Virginia Square
Ballston
Crystal City/
Pentagon City
Arlington County
RB Corridor
Old Town
I-395 Corridor
Huntington/
Eisenhower
City of Alexandria
Inside the Beltway
Annandale/Baileys
Merrifield/Route 50
Tysons Corner
Reston/Herndon
Rt 28 S/Chantilly
Springfield
Fairfax County
50-66 Corridor
Loudoun County
Outside the Beltway
Northern Virginia
132,195,668
83,036,435
5,121,795
16,113,797
77,914,640
3,268,420
9,242,182
24,690,837
23,240,699
9,505,603
6,608,194
1,358,705
49,159,233
16,992,423
2,742,707
6,058,050
8,191,666
21,221,408
32,166,810
10,945,402
7,076,618
5,531,747
8,613,043
4th Qtr
2015
130,440,659
81,418,214
5,121,795
16,117,661
76,296,419
3,268,420
8,675,922
24,290,837
22,573,953
9,509,467
6,608,194
1,369,626
49,022,445
16,811,425
2,761,709
6,058,050
7,991,666
21,265,618
32,211,020
10,945,402
7,095,248
5,531,747
8,638,623
1st Qtr
2016
21.2%
20.0%
21.8%
17.9%
19.9%
39.5%
26.1%
16.8%
18.9%
18.1%
17.5%
26.1%
23.4%
23.5%
42.1%
33.4%
10.0%
24.4%
23.3%
21.1%
19.4%
22.0%
30.0%
2nd Qtr
2015
21.1%
19.9%
20.7%
18.6%
19.8%
38.5%
24.8%
15.9%
19.8%
17.7%
19.8%
26.5%
23.2%
24.2%
42.1%
35.6%
9.9%
23.7%
22.7%
20.6%
19.5%
20.0%
29.6%
3rd Qtr
2015
21.2%
19.7%
20.3%
18.5%
19.7%
35.1%
24.8%
16.4%
19.1%
17.4%
20.2%
30.4%
23.6%
25.0%
42.3%
37.3%
10.2%
23.7%
22.9%
21.3%
18.9%
21.7%
29.1%
4th Qtr
2015
Office Vacancy Rate
21.4%
20.2%
19.7%
19.9%
20.2%
33.2%
25.0%
17.1%
19.3%
21.6%
17.4%
31.5%
23.5%
24.7%
41.4%
37.5%
9.1%
23.3%
22.9%
22.2%
21.1%
18.6%
28.1%
1st Qtr
2016
219,642
149,611
(2,269)
19,502
151,880
(57,580)
(169,395)
154,494
209,842
(48,140)
67,642
(4,983)
70,031
(56,707)
(233)
(1,724)
(54,750)
10,329
126,738
116,409
44,254
(74,522)
40,597
2nd Qtr
2015
231,507
163,040
55,177
(118,511)
107,863
32,026
121,167
206,727
(128,206)
34,637
(153,148)
(5,340)
68,467
(118,463)
887
(131,449)
12,099
129,861
186,930
57,069
(10,856)
107,963
32,754
3rd Qtr
2015
150,018
125,945
18,110
7,300
107,835
111,018
(8,266)
(109,727)
160,384
33,223
(25,923)
(52,874)
24,073
(132,450)
(4,877)
(99,645)
(27,928)
159
156,523
156,364
46,270
(89,724)
43,613
4th Qtr
2015
Total Office Absorption

2 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties.


4 The I-395 and Springfield/Newington submarkets were updated in the second quarter of 2012 with additional inventory.

p- preliminary
132,195,668
83,036,435
5,121,795
16,113,797
77,914,640
3,268,420
9,242,182
24,690,837
23,240,699
9,505,603
6,608,194
1,358,705
49,159,233
16,992,423
2,742,707
6,058,050
8,191,666
21,221,408
32,166,810
10,945,402
7,076,618
5,531,747
3rd Qtr
2015
Total Office Inventory
2nd Qtr
2015
Trailing 12-Month Data
(479,132)
(459,410)
33,198
(220,679)
(492,608)
63,345
(23,173)
(195,888)
(97,668)
(406,138)
185,459
(18,545)
(19,722)
35,511
17,713
14,386
3,412
38,501
(55,233)
(93,734)
(209,841)
172,148
76,194
1st Qtr
2016
Appendix
23,240,699
24,690,837
1,358,705
6,746,835
9,505,603
23,638,285
24,690,837
9,092,182
3,268,420
78,300,867
16,252,438
Merrifield/Route 50
Tysons Corner
Reston/Herndon
Rt 28 S/Chantilly
Springfield
Fairfax County
50-66
132,781,417
Northern Virginia
130,440,659
81,418,214
5,121,795
16,117,661
76,296,419
3,268,420
8,675,922
24,290,837
22,573,953
9,509,467
6,608,194
1,369,626
49,022,445
16,811,425
2,761,709
6,058,050
7,991,666
21,265,618
32,211,020
10,945,402
7,095,248
5,531,747
8,638,623
Q1 2016
21.1%
18.8%
21.0%
18.0%
18.7%
38.1%
22.4%
15.7%
20.1%
17.1%
19.3%
23.2%
23.9%
24.1%
41.6%
35.9%
9.2%
23.8%
23.7%
23.7%
20.9%
16.5%
30.6%
2014
21.2%
19.7%
20.3%
18.5%
19.7%
35.1%
24.8%
16.4%
19.1%
17.4%
20.2%
30.4%
23.6%
25.0%
42.3%
37.3%
10.2%
23.7%
22.9%
21.3%
18.9%
21.7%
29.1%
2015
21.4%
20.2%
19.7%
19.9%
20.2%
33.2%
25.0%
17.1%
19.3%
21.6%
17.4%
31.5%
23.5%
24.7%
41.4%
37.5%
9.1%
23.3%
22.9%
22.2%
21.1%
18.6%
28.1%
Q1 2016
Vacancy Rate (%)
(905,638)
(615,383)
88,059
15,030
(703,442)
(151,859)
(378,965)
64,288
(274,063)
(86,554)
101,584
22,127
(290,255)
65,115
61,173
(85,665)
89,607
(492,443)
(355,370)
137,073
(308,316)
194,219
(378,346)
2014
551,239
327,546
74,754
(100,526)
252,792
73,408
41,794
268,104
67,379
5,921
(106,447)
(97,367)
223,693
(327,466)
(17,885)
(227,461)
(82,120)
204,931
551,159
346,228
127,316
(81,594)
159,209
2015
(479,132)
(459,410)
33,198
(220,679)
(492,608)
63,345
(23,173)
(195,888)
(97,668)
(406,138)
185,459
(18,545)
(19,722)
35,511
17,713
14,386
3,412
38,501
(55,233)
(93,734)
(209,841)
172,148
76,194
Q1 2016
Total Annual Absorption
1 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties



4 The I-395 and Springfield/Newington submarkets were updated in the second quarter of 2012 with additional inventory.
132,195,668
5,121,795
83,036,435
5,072,696
83,373,563
Loudoun County
Outside the Beltway
16,113,797
77,914,640
3,268,420
9,242,182
9,505,603
6,608,194
1,358,705
49,159,233
49,407,854
Inside the Beltway
Annandale/Baileys
2,742,707
16,992,423
6,058,050
2,742,707
6,293,050
I-395 Corridor
8,191,666
21,221,408
17,227,423
8,191,666
Old Town
City of Alexandria
21,048,500
RB Corridor
32,166,810
10,945,402
7,076,618
Huntingon/Eisenhower
11,131,931
32,180,431
6,820,962
Ballston
Arlington County
5,531,747
8,613,043
8,695,791
Rosslyn
Courthouse/Clarendon/
Virginia Square
5,531,747
2015
Total Inventory
2014
Historical Year-End Data
Appendix
Market Statistics
Northern Virginia 1st Quarter 2016 Market Statistics
Buildings
Total
Inventory
(SF)
New/Relet
Vacancy
(%)
Sublet
Vacancy
(%)
Total
Vacancy*
(%)
Net
Absorption
Current QTR
(SF)
Under
Construction
(SF)
Average
Asking Rent
(FS)
47
8,193,196
19.0%
2.7%
21.7%
4,634
720,000
$37.96
64
6,746,020
31.9%
0.2%
32.1%
46,783
$30.01
27
1,872,209
10.2%
0.5%
10.7%
(15,906)
$24.70
TOTAL
138
16,811,425
23.2%
1.5%
24.7%
35,511
720,000
$31.98
49
12,757,247
20.7%
0.6%
21.3%
115,975
687,767
$44.04
35
6,227,522
23.1%
0.7%
23.8%
(31,660)
$40.40
19
2,280,849
31.7%
0.9%
32.6%
(45,814)
$32.86
TOTAL
103
21,265,618
22.6%
0.7%
23.3%
38,501
Alexandria
Class
RB Corridor
Class
687,767
$40.79

Class
A
25
7,794,322
21.9%
1.0%
22.9%
(80,428)
$38.70
14
3,151,080
20.4%
0.1%
20.5%
(13,306)
$35.58
39
10,945,402
21.5%
0.7%
22.2%
(93,734)
$37.69
51
12,650,480
17.3%
1.6%
18.9%
110,776
1,790,809
$36.57
61
7,745,285
20.6%
1.1%
21.7%
(202,879)
$29.20
30
2,178,188
12.9%
0.6%
13.5%
(5,565)
$25.45
TOTAL
142
22,573,953
18.0%
1.3%
19.3%
(97,668)
1,790,809
$31.65
106
17,967,174
14.6%
2.0%
16.6%
(226,408)
354,913
$30.02
64
5,649,260
15.8%
2.0%
17.8%
19,775
$25.30
15
674,403
24.2%
0.0%
24.2%
10,745
$21.09
TOTAL
185
24,290,837
15.1%
1.9%
17.0%
(195,888)
TOTAL
Tysons Corner
Class
Reston/Herndon
Class
354,913
$28.15
* Vacancy Current - the vacancy rate is calculated using the combined total of vacant direct, sublease and new space.
Market Statistics
Northern Virginia 1st Quarter 2016 Market Statistics
Buildings
Total
Inventory
(SF)
New/Relet
Vacancy
(%)
Sublet
Vacancy
(%)
Total
Vacancy*
(%)
Net
Absorption
Current QTR
(SF)
Under
Construction
(SF)
Average
Asking Rent
(FS)
Merriield/Route 50
Class
A
20
3,616,798
19.8%
1.8%
21.6%
169,040
$30.91
15
1,566,456
16.6%
1.0%
17.6%
(420)
$27.05
20
1,424,940
6.8%
6.8%
16,839
$22.39
TOTAL
55
6,608,194
16.2%
1.2%
17.4%
185,459
$29.50
Class
A
25
4,365,706
17.9%
0.1%
18.0%
(10,010)
$27.91
47
4,410,647
23.3%
1.4%
24.7%
(400,483)
$25.05
12
733,114
24.8%
0.0%
24.8%
4,355
$23.52
TOTAL
84
9,509,467
20.9%
0.7%
21.6%
(406,138)
49
6,127,730
23.3%
0.9%
24.2%
(41,406)
$27.17
27
2,548,192
22.1%
5.1%
27.2%
18,233
$23.29
76
8,675,922
22.9%
2.1%
25.0%
(23,173)
$25.54
$25.32
Route 28 South
Class
TOTAL
Loudoun County
Class
A
40
3,658,941
16.1%
0.9%
17.0%
41,856
18
1,462,854
25.6%
0.7%
26.3%
(8,658)
64,800
$21.65
58
5,121,795
18.9%
0.8%
19.7%
33,198
64,800
$24.74
TOTAL
$26.13
Northern Virginia
Class
A
427
79,443,819
18.9%
1.4%
20.3%
140,929
3,553,489
$34.69
352
40,118,363
22.7%
1.2%
23.9%
(585,597)
64,800
$30.27
144
10,878,477
19.7%
0.4%
20.1%
(34,464)
TOTAL
923
130,440,659
20.1%
1.3%
21.4%
(479,132)
$26.69
3,618,289
$32.14
* Vacancy Current - the vacancy rate is calculated using the combined total of vacant direct, sublease and new space.
Marymount University
1000 North Glebe Road
The JBG Companies
Oaklawn Development Partners
309 Kellys Ford Plaza SE
Operating Expense and Real Estate Tax Base
FS = Full Service NN = Plus Electric & Char

N = Plus Electric NT = Plus Taxes
NNN = Net of all Operating Expenses and Taxes
Status
N/A
U/C = Under Construction

U/R = Under Renovation
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Leesburg
RENTAL RATE
N/A
USAA Real Estate Company/Lowe

Enterprises
2401 Eisenhower Avenue
Total
RENTAL RATE
OWNER/DEVELOPER
$55.00-$65.00 FS
RENTAL RATE
N/A
RENTAL RATE
BUILDING ADDRESS
Eisenhower Avenue
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Rosslyn
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Ballston
4Q16
DELIVERY
DATE
1Q17
DELIVERY
DATE
1Q18
DELIVERY
DATE
3Q17
DELIVERY
DATE
N/A = No Space Available
U/C
STATUS
U/C
STATUS
U/C
STATUS
U/C
STATUS
0
-
64,800
AVAILABLE
SPACE
AVAILABLE
SPACE
195,700
195,700
AVAILABLE
SPACE
56,631
56,631
AVAILABLE
SPACE
64,800
RENTABLE
BUILDING AREA
720,000
720,000
RENTABLE
BUILDING AREA
552,781
552,781
RENTABLE
BUILDING AREA
166,767
166,767
RENTABLE
BUILDING AREA
Northern Virginia Survey of Office Space Under Construction/Under Renovation
100%
100%
PERCENT
PRELEASED
100%
100%
PERCENT
PRELEASED
65%
65%
PERCENT
PRELEASED
66%
66%
PERCENT
PRELEASED
EIT, LLC
MAJOR TENANTS
The National Science Foundation
MAJOR TENANTS
Corporate Executive Board
MAJOR TENANTS
Marymount University
MAJOR TENANTS
Capital One
MITRE
Capital One Tower
Colshire Drive / MITRE IV
Comstock Partners
1900 Reston Metro Plaza
First Potomac Realty Trust
22318 Glenn Drive
4Q16
DELIVERY
DATE
2Q17
DELIVERY
DATE
2Q16
3Q18
DELIVERY
DATE
U/R = Under Renovation
= Plus Electric NT = Plus Taxes
= Full Service NN = Plus Electric & Char
FS
Status
U/C = Under Construction
0
899,560
3,618,289
607,244
292,316
AVAILABLE
SPACE
15,000
15,000
AVAILABLE
SPACE
354,913
354,913
975,000
2018 DELIVERIES
2019 DELIVERIES
TOTAL CURRENTLY UNDER CONSTRUCTION/RENOVATION
880,609
RENTABLE
BUILDING AREA
182,000
182,000
RENTABLE
BUILDING AREA
354,913
354,913
AVAILABLE
SPACE
340,000
RENTABLE
BUILDING AREA
AVAILABLE
SPACE
340,000
975,000
RENTABLE
BUILDING AREA
1,762,680
U/C
STATUS
U/C
STATUS
U/C
U/C
STATUS
2017 DELIVERIES
N/A
RENTAL RATE
N/A
RENTAL RATE
N/A
N/A
RENTAL RATE
2016 DELIVERIES
Northern Virginia
Summary
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Route 28 North
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Reston
Total
OWNER/DEVELOPER
BUILDING ADDRESS
Tysons Corner
Northern Virginia Survey of Office Space Under Construction/Under Renovation
75%
0%
100%
66%
67%
PERCENT
PRELEASED
92%
92%
PERCENT
PRELEASED
0%
0%
PERCENT
PRELEASED
0%
100%
100%
PERCENT
PRELEASED
N/A
MAJOR TENANTS
N/A
MAJOR TENANTS
MITRE
Capital One
MAJOR TENANTS
Merritt Properties, LLC
LGV Group
Comstock Holding Companies, Inc
Corporate Office Properties Trust
20193 Ashbrook Pl
22365 Broderick Dr
43777 Central Station Dr
4870 Stonecroft Blvd
Pentagon Federal Credit Union
KBS Realty Advisors
Macerich
7940 Jones Branch Dr
3001-3003 Washington Blvd
7900 Tysons One Pl
*Vacancy rate for new space- does not include relet or sublet space available
1,130,554
528,290
306,007
Clarendon/Courthouse/VA
Square
Tysons
296,257
126,170
60,244
65,926
NEW SPACE
AVAILABLE
45,735
326,442
RENTABLE
BUILDING
AREA
159,300
32,690
13,045
35,368
99,099
NEW SPACE
AVAILABLE
32,675
RENTABLE
BUILDING
AREA
Tysons
SUBMARKET
Route 28 South
Loudoun
Loudoun
Loudoun
SUBMARKET
FS
$55.00-$65.00
Withheld
Delivered 1Q14
Delivered 2Q14
N/A
RENTAL RATE
N/A
$28.50
$22.75
N/A
RENTAL RATE
Delivered 4Q14
STATUS
Delivered 3Q15
Delivered 1Q15
Delivered 1Q15
Delivered 1Q15
STATUS
Total
OWNER/DEVELOPER
BUILDING ADDRESS
2014 Deliveries
Total
OWNER/DEVELOPER
BUILDING ADDRESS
2015 Deliveries
Northern Virginia Survey of New Office Space
11%
11%
22%
0%
VACANCY RATE (AS

OF CURRENT
QUARTER)*
14%
0%
33%
37%
0%
VACANCY RATE (AS

OF CURRENT
QUARTER)*
47%
44%
48%
53%
PERCENT LEASED
UPON DELIVERY
77%
100%
50%
26%
100%
PERCENT LEASED
UPON DELIVERY
Monday Properties
Lowe Enterprises
Monument Enterprises
Rubenstein Partners, LP
Halle Enterprises
Beulah Street LLC II
Zumot Real Estate Management
Duke Realty
1812 North Moore Street
1400 Crystal Drive
901 South Clark Street
7951-7961 Loisdale Road
5680 King Center Drive
6400 Beulah Street Office II
14399 Penrose Place
4801 Stonecroft Boulevard
Clark Enterprises/Fred Schnider Investment

Delivered 1Q12
Group/The Shooshan Company
The JBG Companies
Edens, Inc.
ING Clarion Partners, LLC
COPT, Inc.
675 North Randolph Street
800 North Glebe Road
2910 District Avenue
6361 Walker Lane
7770 Backlick Road
*Vacancy rate for new space- does not include relet or sublet space available
Merrifield
Ballston
N/A
$41.00-$43.50 FS
N/A
$49.00-$52.00 FS
Ballston
Rosslyn
SUBMARKET
Route 28 South
Route 28 South
Pentagon City
Crystal City
Rosslyn
SUBMARKET
Delivered 4Q12
Delivered 1Q12
Delivered 2Q12
Delivered 1Q12
N/A
$46.00-$47.00 FS
RENTAL RATE
N/A
$29.50 FS
$32.00 FS
$34.50-$37.50
Withheld
N/A
$44.00-$52.00 FS
$50.00-$65.00 FS
RENTAL RATE
FS
Total
Skanska
Delivered 4Q12
OWNER/DEVELOPER
STATUS
Delivered 2Q13
Delivered 2Q13
Delivered 3Q13
Delivered 3Q13
Delivered 3Q13
Delivered 4Q13
Delivered 3Q13
Delivered 4Q13
STATUS
BUILDING ADDRESS
2012 Deliveries
Total
OWNER/DEVELOPER
BUILDING ADDRESS
2013 Deliveries
Northern Virginia Survey of New Office Space
1,452,697
240,565
330,582
78,499
311,776
352,740
138,535
RENTABLE
BUILDING
AREA
1,922,260
254,578
104,000
35,000
110,047
242,272
332,084
308,898
535,381
RENTABLE
BUILDING
AREA
368,077
116,670
166,150
73,817
11,440
NEW SPACE
AVAILABLE
1,086,850
26,952
2,353
70,447
221,316
230,401
535,381
NEW SPACE
AVAILABLE
25%
48%
50%
0%
24%
0%
8%
VACANCY RATE (AS

OF CURRENT
QUARTER)*
57%
0%
26%
23%
64%
100%
0%
75%
100%
VACANCY RATE (AS

OF CURRENT
QUARTER)*
75%
43%
27%
7%
32%
100%
82%
PERCENT LEASED
UPON DELIVERY
33%
100%
25%
67%
0%
0%
100%
0%
0%
PERCENT LEASED
UPON DELIVERY
Methodology & Definitions

Methodology
Explanation of Terms
Market statistics are calculated

from a base building inventory
made up of office properties
deemed to be competitive in the
typical Washington, DC office
market. Single-tenant buildings and
privately-owned buildings in which
the federal government leases space
are included.
Generally, owneroccupied
and
federally-owned
buildings are not included. Older
buildings unfit for occupancy or ones
that require substantial renovation
before
tenancy
are
generally
not included in the competitive
inventory. Vacant space is defined
as space that is physically vacant and
available immediately. Sublet space
still occupied by the tenant is not
counted as vacant space.
Total Inventory: The total amount

of office space (in buildings greater
than 10,000 square feet) that can be
rented by a Fourth party.
New Space Vacant: First generation,
never-occupied office space in
newly constructed or substantially
renovated buildings, being actively
marketed by a landlord.
Relet
Space
Vacant:
Secondgeneration,
unoccupied
office
space being actively marketed by a
landlord. (Space that is marketed but
largely occupied is not counted as
vacant space.)
Sublet Space Vacant: Secondgeneration, unoccupied space being
actively marketed by a tenant.
(Sublet space that is marketed but
still occupied is not counted as
vacant space.)
Total Space Vacant: The sum of
new, relet, and sublet space that
is unoccupied and being actively
marketed.
Vacancy Rate: The amount of
unoccupied space (new, relet, and
sublet) expressed as a percentage of
total inventory. (Total Space Vacant
divided by Total Inventory.)
Total Space Available: The total

amount of space, both vacant and
occupied, being actively marketed
for lease by a tenant or landlord.
(This includes space that is currently
occupied but marketed for future
availability.)
Availability Rate: The total amount
of space being actively marketed for
lease (both vacant and occupied)
expressed as a percentage of total
inventory. (Total Space Available
divided by Total Inventory.)
Absorption: The net change in
occupied space between two points
in time. (Total occupied space in the
previous quarter minus total occupied
space in the current quarter, quoted
on a net, not gross, basis.)
New/Relet/Sublet Absorption: The
net change in occupied new, relet,
and sublet space between two
quarters.
Total Absorption: The net change
in total occupied (new, relet, and
sublet) space between two quarters.
New Leasing Activity: The sum of
all square footage underlying any
leases between two quarters. This
includes pre-leasing activity as well
as expansion. It does not include
renewals.
Disclaimer
This report and other research materials may be found on our website at www.cushmanwakefield.com. This is a research
document of Cushman & Wakefield in Washington, DC. Questions related to information herein should be directed to the
Research Department at +1 202 463 2100. Information contained herein has been obtained from sources deemed reliable and
no representation is made as to the accuracy thereof.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and
live. Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by
combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman
& Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of
agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset
management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more,
visit www.cushmanwakefield.com or follow @CushWake on Twitter.
Visit cushmanwakefield.com for more information on the full range of

Cushman & Wakefield commercial real estate services or contact:
Nathan Edwards
Regional Director
2101 L Street, NW, Suite 700
Washington, DC 20037
+1 202 463 2100
Joseph Wood
Research Analyst
+1 202 463 2100
Sam Prendergast
Research Analyst
+1 202 463 2100
About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients
transform the way people work, shop, and live. Our 43,000 employees in more than
60 countries help investors and occupiers optimize the value of their real estate by
combining our global perspective and deep local knowledge with an impressive
platform of real estate solutions. Cushman & Wakefield is among the largest
commercial real estate services firms with revenue of $5 billion across core services
of agency leasing, asset services, capital markets, facility services (C&W Services),
global occupier services, investment & asset management (DTZ Investors), project &
development services, tenant representation, and valuation & advisory. To learn more,
visit www.cushmanwakefield.com or follow @CushWake on Twitter.
Publication date: 6.1.16

Copyright 2016 Cushman & Wakefield. All rights reserved.
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Market Report

Northern Virginia | 1st Quarter 2016

DC Metropolitan Area Overview..............................................................................3

Cushman & Wakefield | 2

Washington, DC Metropolitan Area

Average Asking Rent (FS)

Looking forward, the consensus forecast for job growth in the

Net Absorption/Asking Rent

Net Absorption, MSF

Asking Rent, $ PSF

Washington, DC Metropolitan Area

The Washington, DC metropolitan regions office market continues

Strong Economic Showing in Q1 2016

The Northern Virginia economy continued the momentum seen

in 2015 into the first quarter of 2016. Unemployment remains

extremely low, with the City of Alexandria and Arlington, Fairfax

and Loudoun counties all reporting jobless rates below 3.5%.

Preliminary numbers from the Bureau of Labor Statistics show

that Northern Virginia added 11,600 net new nonfarm payrolls

Average Asking Rent

of the 16,100 total nonfarm jobs created in the Washington, DC

Net Absorption/Asking Rent

using employment sectors posted gains in the first two months of

The Northern Virginia office market registered negative 479,000

square feet (sf) of net absorption in the first quarter of 2016

Net Absorption, SF (thousands)

Asking Rent, $ PSF

as several large scale move-outs by federal contractors hit the

Renewals dominated leasing activity in the first quarter, accounting

scheduled to be delivered by Carr Properties in mid-2018. The

competition to land this tech company that services the utility

industry has endured for years and spanned several jurisdictions;

keeping the company within its borders with the help of a $1

Large Blocks of Contiguous Space

Several large-scale developments continued or entered into

construction in the first quarter. What will be the largest office

building in the region Capital Ones 1 msf headquarters

completion. In addition, Comstock Partners began construction

of their 350,000 sf speculative office building at Wiehle-Reston

East Metro Station, as yet another Silver Line station continues to

add density. Lerner Enterprises speculative 475,000-sf building,

1775 Tysons Boulevard, and MITREs 340,000-sf build-to-suit at

Cushman & Wakefield | 4

Northern Virginia Office Submarkets

VIRGINIA SQUARE - GMU

FAIR FAX COUN

14370 Newbrook Drive

14700 Lee Road

2311 Wilson Boulevard

251 18th Street S

Crystal City/Pentagon City

Key Sales Transactions 1Q 2016

McKinley & Pierce Buildings

Dividend Cap Diversified Prop Fund / Northop

Pacific Corporate Park

Gramercy Property Trust / Beacon Capital Partners

Mission Ridge I & II

Lasalle Investment / Salus Property

NYSCRF JV Liberty Property Trust / Normany Real

Presidents Park I, II, and III

Northern Virginia Office Market

Northern Virginia Office Market