Photo courtesy of AEDP
AEDP office vacancy report January-June 2026
Alexandria's office vacancy rate fell to 18.8% in the first half of 2026, down from 21.6% a year earlier, according to the City of Alexandria Mid-Year Market Report released this week by the Alexandria Economic Development Partnership, covering January 1 through June 30.
That puts the city ahead of the region. Northern Virginia posted a 20.1% office vacancy rate for the second quarter.
Two things drove the drop, and neither involved a wave of new tenants. AEDP credits keeping the National Science Foundation, which in May moved into a 386,600-square-foot building formerly occupied by the U.S. Patent and Trademark Office, along with the start of construction at 5001 Eisenhower Avenue, where a long-vacant office building is being converted into affordable housing. A building that becomes apartments stops counting as empty office space.
Underneath the headline number, the picture is more mixed. Net absorption — the measure of whether occupied space is growing or shrinking — was negative 160,400 square feet across an 18-million-square-foot inventory. AEDP reads that as tenants resizing, taking less space than before even as leasing activity holds steady. Across the region, companies are trimming large footprints in favor of newer, better-amenitized buildings, which keeps top-tier space full and pushes developers to find new uses for older ones.
Old Town is the outlier
Of the city's four office submarkets, Old Town and Old Town North was the only one where vacancy rose. It hit 15.5% and gave back 102,789 square feet — the weakest showing in the city — across an inventory of about 7.5 million square feet, the largest of any submarket.Carlyle still has the highest vacancy rate at 27.7%, though that is down from 29.1% a year ago, with negative absorption of 70,384 square feet. The West End improved to 16.9% and was the only submarket to add occupied space, at 14,157 square feet. Potomac Yard again registered zero vacancy across 908,527 square feet — which AEDP reads as strong demand for new office space in a submarket that has very little of it.
Among the larger deals: HumRRO renewed 40,472 square feet at 66 Canal Center Plaza in May, and the Academy of Managed Care Pharmacy took 15,585 square feet at 675 N. Washington St. The biggest sale was the Alexandria Professional Center at 4660 Kenmore Avenue, which sold for $16.5 million to Chicago Pacific Founders — a mostly medical office building, a category seeing stronger demand across Northern Virginia.
A first look at warehouses
For the first time, the report also covers Alexandria's industrial market, where demand is growing for flex and light industrial space that is hard to find inside the Beltway. Vacancy there rose to 5.9% from 4.9% on an inventory of roughly 4.4 million square feet, after Peraton vacated 14,000 square feet to consolidate in Herndon and WareSpace pulled 950 S. Pickett Street off the market to convert it to co-warehousing. That space has since come back for lease, and AEDP says WareSpace is seeing strong demand for the co-warehousing and flex format.The report's figures come from AEDP's analysis of CoStar, Colliers and Newmark data, adjusted to match the city's boundaries.
The full report is available at alexandriaecon.org.
