Commercial Real Estate in Old Town Alexandria: Balancing Historic Charm with Modern Demand

By Staff Writer | Boosalis Properties

A Thriving Market Along theWaterfront

Old Town Alexandria, VA, one of Northern Virginia’s most iconic neighborhoods, continues to attractbusinesses and investors seeking a blend of history, walkability, and economic growth. Known for its cobblestone streets, 18th-century architecture, and waterfront access along the Potomac River, Old Town has become a hub for boutique retail, restaurants, professional offices, and mixed-use developments.

According to CoStar Group, vacancy rates in Old Town remain lower than regional averages, reflecting strong tenant demand despite shifting trends in the broader office market. Source: CoStar.

Market Trends in 2025

• Retail Resilience: Old Town’s King Street corridor remains one of the busiest retail destinations in Northern Virginia, attracting both national brands and independent shops. Source: Alexandria Economic Development Partnership.

• Office Leasing: Professional services and nonprofits continue to seek space in Old Town, driven by its proximity to Washington, D.C., and ease of access via Metro and major highways.

• 

  Tourism & Hospitality: With over 3 million annual

•  visitors, Old Town’s

•  retail and restaurant sector benefits from a steady flow of tourists, adding to its economic vitality. Source: Washington Business Journal.

Economic Drivers Supporting Growth

Old Town’s strength lies in its diverse economy. Beyond tourism and retail, the city benefits from federal contractors, technology firms, and trade associations that choose Alexandria for its accessibility and prestige. The neighborhood’s location, minutes from National Landing and Amazon’s HQ2, also positions it to capture spillover demand from larger regional projects.

Local infrastructure projects — including improvements to the Potomac Yard Metro Station and expanded bike/pedestrian connectivity — are expected to further enhance access and attract more businesses.

Development & Preservation Balance

While Old Town is rooted in history, new investment continues to shape its future. Mixed-use developments near the waterfront have introduced modern amenities while adhering to the city’s strict preservation guidelines. Developers face challenges in balancing growth with maintaining Old Town’s historic integrity, but this tension has helped the neighborhood retain its distinctive character.

This balance makes commercial real estate in Old Town a premium market — with limited inventory driving competition among tenants and investors.

Zoning & Regulatory Environment

Zoning in Old Town is carefully managed to protect the neighborhood’s historic district, one of the largest in the country. While this creates limitations on large-scale development, it also ensures stability and long-term value. For investors, zoning consistency reduces uncertainty, while for businesses, it guarantees the charm and appeal that draws customers year after year.

According to Boosalis Properties, having a partner with local expertise is critical when navigating zoning and permitting in Alexandria. Their team helps clients understand not only what’s available today, but also what future regulatory and development shifts may mean for long-term investments.

Opportunities for Businesses & Investors

Old Town offers a unique combination of historic authenticity and modern amenities. For businesses, the benefits include:

• High pedestrian traffic along King Street and the waterfront

• Strong demographics with affluent households and a well-educated workforce

• Access to transportation via I-495, Route 1, and the King Street Metro

As Boosalis Properties emphasizes on its website, Northern Virginia’s commercial real estate market requires local expertise. Identifying the right property in Old Town means balancing preservation with growth — something the firm has helped clients achieve across the region.

Expert Insight

“Old Town Alexandria is unlike any other market in Northern Virginia,” said George Boosalis, President of Boosalis Properties. “It offers a mix of character, history, and economic strength that continues to appeal to both tenants and investors. The challenge is finding space — the demand here consistently outweighs supply.”

Long-Term Outlook

Looking ahead, Old Town’s market fundamentals appear strong. Limited land availability, coupled with growing demand from retailers, professional services, and hospitality groups, is expected to keep vacancy rates low and rental rates stable. As more companies and residents prioritize walkable, mixed-use neighborhoods, Old Town stands to remain one of the most desirable submarkets in Northern Virginia.

Disclaimer

This article is provided for informational purposes only and does not constitute legal, financial, or investment advice. Market conditions may vary, and readers are encouraged to consult with professional advisors before making real estate decisions.