At a glance
- The market absorbed 672,378 square feet of net space in the third quarter, according to JLL figures reported by Commercial Observer, reversing first-half losses the firm tied to buildings being removed from the market.
- The National Science Foundation's 380,000-square-foot move to 401 Dulany Street accounted for much of that gain, and the single move equals roughly 56 percent of the quarter's net absorption.
- Tenants signed 1.3 million square feet in the quarter, with no single deal above 100,000 square feet.
Northern Virginia's office vacancy rate fell for a sixth consecutive quarter, to 21.7 percent. The market absorbed 672,378 square feet of net space in the third quarter, according to JLL figures reported by Commercial Observer, reversing first-half losses the firm tied to buildings being removed from the market.
The National Science Foundation's 380,000-square-foot move to 401 Dulany Street accounted for much of that gain, and the single move equals roughly 56 percent of the quarter's net absorption. The numbers suggest the tightening owes more to shrinking supply and the foundation's relocation than to broad leasing velocity.
Tenants signed 1.3 million square feet in the quarter, with no single deal above 100,000 square feet. AI, technology and defense companies still committed to more than 300,000 square feet of net new space, and the report says defense spending and technology investment are expected to keep driving momentum.
Relocations and new leases made up 58 percent of leasing so far in 2026, a reversal of the renewal-heavy pattern JLL describes for 2021 through 2023.
Rents firm as construction stalls
Total available space fell to 33.6 million square feet, the lowest in a decade and 25.5 percent below the 45.1 million-square-foot peak in 2023.
Class A direct asking rents reached $42.51 per square foot per year, while overall direct asking rents averaged $38.13. JLL's longer-run data shows asking rents rising since 2022 for Trophy, Class A and Class B buildings, with Class C rents slipping.
| Metric | Third-quarter figure |
|---|---|
| Vacancy | 21.7% |
| Net absorption | 672,378 sq ft (positive) |
| Total available space | 33.6 million sq ft |
| Leasing volume | 1.3 million sq ft |
| Class A direct asking rent | $42.51 per sq ft per year |
| Overall direct asking rent | $38.13 per sq ft per year |
| Under construction | About 34,000 sq ft |
Only about 34,000 square feet is under construction, and more than 10 million square feet of existing inventory has been proposed for redevelopment. JLL expects that combination to keep tightening the lower end of the market while limited Trophy supply pushes demand toward Class A properties.
The numbers suggest the tightening owes more to shrinking supply and the foundation's relocation than to broad leasing velocity.
Reported by the Sectors desk from Commercial Observer. Published . Corrections