Fairfax County
Fairfax County's office vacancy rate remains the highest in the Washington region, but it declined 26 percent in the fourth quarter from a year earlier as government contractors won more work.
The county's commercial real estate market is still recovering from the "tech wreck" that began in late 2000, when many high-technology companies were forced to downsize or close their doors.
"Tysons Corner and Reston-Herndon got hit pretty hard in the last down cycle, and it's taking them a little while to bounce back," said Sandy Paul, a vice president of Delta Associates, an Alexandria-based real estate consulting firm. "But we are seeing some significant progress, particularly in Reston-Herndon."
Fairfax County's office vacancy rate dropped to 13.6 percent in the fourth quarter from 17.3 percent in the comparable period a year earlier, according to county-by-county statistics by CoStar Group Inc.
The county, with 99 million square feet, is the second-largest office market in the Washington region after the District of Columbia
With so much vacant space, asking rates for office rentals have been mostly flat in Fairfax County, averaging $23.38 per square foot in the fourth quarter, up from $23.10 a year earlier.
As for new office buildings, 1.2 million square feet was under construction in the fourth quarter, up from 800,500 square feet a year ago -- but still a fraction of the 8.8 million square feet in mid-2000.
-- Bill Brubaker
Loudoun County
The office vacancy rate in Loudoun County dropped 21 percent over the past year. But there's still plenty of empty space.
The vacancy rate was 12.8 percent in the fourth quarter, down from 16.6 percent in the comparable period a year earlier. That's the seventh straight quarter the rate has declined.
Like neighboring Fairfax County, Loudoun County hasn't recovered from the exodus created by companies closing or downsizing after the technology bust that began in late 2000.
But with defense spending up, government contractors have been snapping up office space in the county, which has the fastest-growing population, by percentage, of any county in the United States.
"In 2005 and 2006, you're going to see an increase in demand that is going to provide significant rent growth," said Sandy Paul of Delta Associates, an Alexandria real estate consulting firm.
The asking price for rental office space in Loudoun County was relatively flat in the fourth quarter at $21.79 per square foot, compared with $21.19 a year earlier.
