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Loudoun's office vacancy rate highest in region
Offices parks built to support a thriving business community in Loudoun County have now nearly turned into office ghost towns.
With a 16.7 percent vacancy rate, Loudoun's Route 28 corridor has the highest percentage of unoccupied commercial and office space in the Northern Virginia area, according to information released last month by Alexandria-based Delta Associates.
"While the current marketplace looks bleak, these projects were in the pipeline as far back as five years ago," said Bob White, president and founder of Great Falls-based Landmark Commercial Real Estate.
Jim Sisley, partner and principal broker at Paladin Real Estate in Leesburg, said office condominiums were developed with the anticipation that the economy would continue to grow, but it did not.
Growth stalled last year after the residential real estate market tanked and the commercial market followed suit, said Steve DeLong, chief executive officer of Cavalier Land Development. Now, companies that have laid off workers have become more conservative and are reluctant to seek larger office spaces.
It's not much better along Route 28 in Fairfax County, where 16.5 percent of office spaces sit unfilled. The Reston/Herndon area comes in third with a 14.1 percent vacancy rate. The McLean/Vienna area is faring the best, with a vacancy rate of 5.1 percent.
In Loudoun, the empty faces of Route 28 buildings mirror those lining the Dulles Greenway and Route 7 as direct vacancy leasing and subletting have dropped. Property owners have lowered rents, but business owners are wary of entering into new leases and developers don't want to sign long-term agreements at under-market values, White said.
Consumer pessimism is also contributing to the high vacancy rate – lower consumer confidence prevents business owners from spending even the money they do have, Sisley said.
A clear solution to filling the empty buildings remains elusive. The developers said it could take several years for the offices to be filled, and it won't happen until after the residential real estate sector recovers.
"Healing is out there somewhere, but we've got to wait it out," White said.
Contact the writer at hhager@timespapers.com
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