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 of the 16,100 total nonfarm jobs created in the Washington, DC Metropolitan region during January and February of 2016. All office-using employment sectors posted gains in the first two months of 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.
The Northern Virginia office market registered negative 479,000 square feet (sf) of net absorption in the first quarter of 2016 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. Renewals dominated leasing activity in the first quarter, accounting for seven of the top 10 transactions. The most significant deal was that of tech company Opower, which committed to a 63,000- sf prelease at 2311 Wilson Boulevard in Arlington’s Courthouse submarket. Their 175,000-sf future headquarters building is scheduled to be delivered by Carr Properties in mid-2018.