The Rosslyn-Ballston corridor bears the most similarity of all Virginia and Maryland neighborhoods to downtown Washington, served as it is by five stops on Metro’s Orange Line, making it one of the most convenient office locations in the region. It is also appealing because of its upscale, high-density residential, hotel and restaurant offerings, and its proximity to Reagan National Airport, Interstate 66 and Route 50.
Rents grew an average of 4.6 percent for Class A apartments in Rosslyn-Ballston during 2011 with vacancy declining from 4 percent to 3 percent during the year. The pipeline of new units grew to 2,723 units at the end of 2011, up from 1,896 a year earlier. Effective rents for Class A units averaged $2,308 a month, with concessions representing 2.1 percent of face rents.
The Class B garden apartment market in the corridor experienced a 1 percent average rent increase during 2011. The low vacancy rate of 1.8 percent at the end of 2011 allowed for rent increases, although vacancy did rise 80 basis points from 1 percent a year earlier. Concessions were negligible.
The Class A apartment market is likely to remain strong in 2012, given the low vacancy rate, but new buildings coming on line will begin to impact the market by 2013. The Class B market will also remain strong this year, with some of the highest garden apartment rents in the region.
Prices in the corridor’s condominium market experienced a modest increase in pricing during 2011, with the average effective price edging up to $665 a square foot during the fourth quarter from $662 a square foot during the same period in 2010. Concessions remained limited at 1.7 percent off asking price. Unit volume, at 79 units during 2011, was comparable to the 87 units sold during 2010.
With a limited 36-month pipeline of 169 units as of year-end 2011, compared with 394 units a year earlier, the corridor’s condominium market conditions are likely to improve during 2012.
The Rosslyn-Ballston office market experienced sluggish conditions during 2011, as more space vacated than was filled and vacancy climbed. The overall vacancy rate in Rosslyn-Ballston (including sublet space) increased to 10.5 percent at year-end 2011, compared with 6.2 percent a year earlier. There are currently three projects, totaling 965,000 square feet, under construction in the corridor. The JBG Cos. is building a 302,000-square-foot office building at 800 N. Glebe Rd., where Accenture is to be a tenant.
Overall, the corridor remains one of the most desirable in the Washington area for office tenants. Rents increased 1.6 percent during 2011, compared to increasing 2.6 percent during 2010, and should continue to climb gradually in 2012.
The Rosslyn-Ballston retail market is one of the strongest in the area, with vacancy at 2.4 percent across. Rents average $30 a square foot on a triple net basis.
Among the limited number of grocery-anchored centers in the corridor, vacancy is below 4 percent and rents average approximately $60 a square foot. More grocery stores are warranted in the corridor to serve the neighborhood’s growing population.
Sandy Paul is the national research director at Delta Associates. Staff at Delta Associates contributed to this article. For more information, please visit www.deltaassociates.com.