There are more than 5,500 high-end apartments in the corridor and, after a lull in new multi-family development following the financial crisis, construction cranes are back in the air. More than 1,100 rental apartment units are now under construction with an additional 1,100 units likely to deliver over the next 36 months. Rent in the corridor averages $2,362 a month, or $2.69 a square foot, by far the highest in Northern Virginia on a per-square-foot basis. Vacancy is only 2.7 percent, the lowest in Northern Virginia.
Condominium development has historically been strong here. Since 2003, almost 3,800 condominiums have been built or converted from rental apartments, mostly in Ballston and Clarendon. Less than 5 percent of those are for sale, and about 100 units may begin marketing over the next 36 months with another 145 units in the long-term pipeline. An additional 600 multi-family units are planned and could be built as apartments or condos.
As an office market, there are few areas that can match the Rosslyn-Ballston corridor. There is more than 23 million square feet of privately-owned office space with about 2 million square feet available to lease, which equates to a direct vacancy rate of 8.7 percent as of mid-year 2012. If sublet space is added, vacancy rises to 10.6 percent — still the second-lowest vacancy rate in Northern Virginia, behind Merrifield.
Almost 1 million square feet is under construction, more than in any other neighborhood in the area with the exception of NoMa. On average during the past 15 years, Rosslyn-Ballston corridor tenants occupy 411,000 more square feet annually than they vacate and so far in 2012 the spread is 162,000 square feet.
Rents average $37.15 a square foot, highest among all suburban markets. Generally, federal government tenants have been attracted to the Rosslyn-Ballston corridor, as well as contractors who serve those agencies. While Crystal City has felt the brunt of Defense Department relocations, Rosslyn-Ballston has also been affected. Those repercussions aside, the corridor is well-positioned to continue to outperform the rest of the area because of its location, accessibility, and its lively 18-hour mixed-use environment.
William Rich is senior vice president at Delta Associates. Staff at Delta Associates contributed to this article. For more information, please visit www.deltaassociates.com.