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rlington’s prime commercial corridors—Rosslyn, Ballston, National Landing, and Clarendon/Courthouse/Virginia Square—continue to command some of the highest asking rents in Northern Virginia, despite a steep vacancy rate. Savills Research & Data Services reported third‑quarter asking rates above $40 per square foot only in these sub‑corridors. Rosslyn topped the list at $44.73, followed by Ballston ($41.89), National Landing ($41.29), and Clarendon/Courthouse/Virginia Square ($40.62).
Across the region, the average asking price for commercial space rose to $36.99 per square foot, up from $35.48 a year earlier. Class A office space averaged $38.21, a lift from $36.55. Vacancy rates fell to 22.8% from 25.5% last year, yet Arlington’s sectors remain high: Clarendon/Courthouse/Virginia Square at 34.2%, Ballston 29.6%, National Landing 25.7%, and Rosslyn 21.7%.
County‑approved conversions of office to residential or hotel space are beginning to curb the long‑standing surplus of commercial inventory. Nevertheless, many potential tenants still gravitate toward western Fairfax County, where the Reston/Herndon corridor led office leasing in the third quarter. Although total regional leasing volume dropped 25.8% year‑over‑year, Reston/Herndon accounted for roughly one‑third of the activity, buoyed by a surge in defense‑contractor demand following the Trump administration’s push for increased military spending.
Savills analysts described the data as “complicated but stabilizing.” Leasing volume fell 25% to 1.8 million square feet, yet availability hit a three‑quarter low, driven by conversions and fewer new listings. A “flight to quality” emerged, with Class A properties absorbing 75% of leasing activity. Subleasing inventory shrank by about 1.5 million square feet as firms seized available space.
Three key positives were highlighted: continued demand from defense contractors amid rising military budgets; recent interest‑rate cuts and potential further easing, which should enhance liquidity; and a contracting inventory, with ongoing and planned conversions and limited new projects.
The top ten leasing deals by square footage all occurred in Reston, Herndon, or Tysons, with the tenth in Loudoun County. CACI led the list, signing a lease for nearly 134,000 square feet at 11487 Sunset Hills Road. Reston and Herndon’s success is attributed to their proximity to major transportation arteries, especially the Toll Road and the metro corridor between Wiehle‑Reston East and Reston Town Center stations.
Total commercial inventory—occupied and vacant—reached 151.1 million square feet in the quarter, up from 150.3 million a year earlier.
