CBRE: Northern Virginia Records First Office Occupancy Gain Since 2019

Last year, for the first time since before the pandemic, Northern Virginia office owners saw more space leasing up than emptying out.

The market recorded 480K SF of positive net absorption for the full year, “a significant recovery following five consecutive years of occupancy loss,” CBRE’s fourth-quarter report says.

Northern Virginia posted its largest quarterly occupancy gain since 2019 in the final three months of the year, CBRE’s data shows, with tenants absorbing 395K SF. Tenants have absorbed more square footage than they gave back in all but one of the last five quarters.

Northern Virginia’s office market, with its 145M SF of inventory surpassing neighboring D.C., struggled with high vacancy rates even before the pandemic-era remote work trend disrupted the sector.

CBRE Mid-Atlantic Research Director Stephanie Jennings said she thinks the year-end data demonstrates “a turn” for the Northern Virginia market. 

“We’re expecting greater certainty in the region’s economy and office market this year, particularly in employment,” she said in an email to Bisnow. “This will return confidence to the market and drive decision-making on active requirements.” 

The market’s 2025 gains were led by the Rosslyn-Ballston and Toll Road submarkets, which achieved 460K SF and 403K SF of net occupancy growth, respectively, according to CBRE. The R-B corridor, a 21M SF submarket across the river from Georgetown, is one of Northern Virginia’s densest areas and benefits from its proximity to the Pentagon and Amazon HQ2, while the 27M SF Toll Road submarket is near Dulles International Airport and Data Center Alley. 

Tysons, which has 27M SF of office space, was the biggest loser, with 319K SF of negative net absorption in 2025.

The sectors with the largest occupancy gains were technology and professional services, while the sector that gave back the most space was the government. The Trump administration’s spending cuts last year presented a headwind for the region, but the government still inked one deal that provided a boost for the market. 

Last quarter, the National Science Foundation signed a 387K SF lease in Alexandria’s Eisenhower East neighborhood, where it is backfilling space that was vacated by the U.S. Patent and Trademark Office. 

Although the NSF is moving from another leased space in Alexandria, the deal represents a net gain for Northern Virginia since its current headquarters is being taken over by the Department of Housing and Urban Development in that agency’s planned move from Southwest D.C. 

Other major deals last quarter included Booz Allen Hamilton’s 310K SF lease to move its headquarters to Comstock’s Reston Station — a 27% downsize from its current footprint in Tysons — and Deloitte’s 600K SF renewal in Rosslyn. 

Expansions included software company SAP’s 80K SF lease at 2355 Dulles Corner and homebuilder NVR’s 68K SF move within Reston to 1900 Oracle Way. 

The activity during Q4 came on the heels of a particularly strong quarter for occupancy gains. In Q3, eight of the top 10 leases CBRE recorded represented growth, led by CACI’s full-building lease at Reston Commons. 

During the full year, half of the 150 tenants that inked deals of 10K SF or larger grew their footprint, according to CBRE, while only 16% shrank.

“We've finally seen that shift back to tenants growing, whereas during Covid and those years that followed, we saw a lot of contraction out of tenants in the market,” CBRE First Vice President Rosanne Richards, a Northern Virginia office broker, told Bisnow Tuesday.

Richards said the market last year experienced a “significant increase” in transactions of more than 50K SF from private sector occupants. 

“We're getting closer to numbers where we were pre-Covid, which I think is an indicator that the large tenants are willing to make those long-term commitments again and feel more confident in the market and their real estate decisions.”

While vacancy across the Northern Virginia office market remained elevated at 22.4% at the end of Q4, the market dynamics are in place to make headway in bringing that down. 

The vacancy at the end of the year represented a 50-basis-point decrease from Q3, according to CBRE, which the brokerage attributes to space being absorbed and buildings being removed from the inventory for conversions.

Demolitions and conversions took 1.5M SF of office space out of the market in 2025, according to Colliers’ Q4 report. 

And there is nearly no new supply coming online. The only new office development underway in Northern Virginia is Kite Realty Group’s 35K SF One Loudon at 2 Exchange St., a stark contrast to the market peak of 5M SF underway in 2021.

Meanwhile, Richards said leasing tour volume is off to a strong start so far this year.

“It really feels like we have some good momentum moving into 2026,” she said.