With D.C.-area office vacancy staying stubbornly high, another owner is looking to convert an older office building to capture the much stronger residential demand.

Elm Street Development filed an application with Fairfax County to redevelop the site of a three-story office building near the Dunn Loring-Merrifield Metro station into a 239-unit apartment building with ground-floor retail.

The 57K SF office building at 2722 Merrilee Drive in Merrifield was constructed in 1984. It sits on a 2-acre site that includes surface parking. Elm Street acquired the building in July for $11M, property records show.

The building has existing tenants with leases expiring in spring 2023, Elm Street Regional Partner James Perry told Bisnow Tuesday. After the expirations, he said Elm Street plans to demolish the office building to make way for a ground-up apartment development.

The developer is seeking to rezone the site to allow for an 85-foot-tall building with 3,900 SF of retail. Roughly 16% of its 239 apartments would be designated as workforce dwelling units, Perry said.

MV+A Architects is working with Elm Street to design the building. Perry said he expects to bring in a fast-casual restaurant or convenience-oriented retailer to the building.

Perry said he sees more demand in the market for apartments than for office space, part of the reason Elm Street decided to pursue the redevelopment. Several similar office-to-residential conversion projects are moving forward in other parts of Fairfax County and the D.C. area. Perry also said the plan fits with Fairfax County's Comprehensive Plan for the area that envisions more mixed-use development.

"It is fully consistent with the county's Comprehensive Plan as part of the transformation of Merrifield from what was a light industrial commercial center to more of a mixed-use destination with easy access to Metro," Perry said. "It is surrounded by properties that have been redeveloped, so it is the next logical piece in terms of the transformation of Merrifield."