Northern Virginia Commercial Real Estate Trends 2025: Office Vacancies and Data Center Boom
By James Carter, Business Correspondent
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Explore Northern Virginia commercial real estate trends for 2025, including rising office vacancies in Tysons, investment opportunities, and the explosive growth of data centers in Loudoun and Prince William counties. Insights from local experts, including Boosalis Properties.
Northern Virginia — August 2025 —
Northern Virginia commercial real estate trends in 2025 reveal a market defined by contrasting forces: rising office vacancies in certain corridors, investor interest in discounted assets, and a booming data center industry that continues to reshape the regional economy.
Office Market: Class A Faces Steeper Challenges Than Class B
The Tysons–Ballston office corridor is a case study in market divergence. Class A office properties ended Q2 2025 with a 27.3% vacancy rate, while Class B properties were at a much lower 14.5%, according to a Cresa market report.
Ballston’s situation is even more stark: ten Class A buildings along North Fairfax Drive collectively stand at 46.2% vacancy, with one 200,576-square-foot building delivered in 2024 still 82.7% empty.
Sublease space remain
s a major factor. Roughly 4 million square feet of office space is on the sublease market, two-thirds of it in the 5,000 to 30,000-square-foot range — appealing to tenants seeking flexible, shorter-term commitments.
The broader Northern Virginia commercial real estate office sector posted a negative net absorption of 444,727 square feet in Q2, pushing overall vacancy to 21.9%. Yet, average asking rents increased to $36.29 per square foot, a 2.2% rise year-over-year (Newmark).
Investors Target Discounted Assets
While certain submar
kets struggle, investment activity is heating up. Private investors are pursuing underperforming properties with the goal of repositioning them for future returns, according to Avison Young. The combination of elevated vacancies and stable demand for smaller, high-quality spaces may offer opportunities for value-add strategies in 2025 and beyond.
Data Center Expansion Drives Industrial Growth — and Controversy
Northern Virginia remains the world’s largest data center market, hosting more than 85 million square feet of facilities in Loudoun and Prince
William counties. Power demand from these centers is expected to double to 35 gigawatts by 2030, prompting Dominion Energy to plan 20 gigawatts of new solar generation over the next 25 years (Reuters).
However, the data center boom has sparked growing public concern. Residents in affected communities report noise pollution, diesel fumes, and potential environmental degradation, particularly near sensitive areas like Manassas National Battlefield Park (Bu
The debate intensified on August 14, 2025, when a Virginia judge voided approval for the Prince William Digital Gateway, a proposed 1,700-acre, 37-facility development. The decision, based on inadequate public notice, has put the $2.2 billion project on hold while developers Compass Datacenters and QTS Datacenters appeal (The Washington Post).
Prince William and Loudoun Show Market Strength
Despite legal hurdles for certain projects, Prince William County’s commercial real estate market remains strong. Industrial vacancy rates are below 5%, office vacancies hover at 3%, and retail space availability is only 2–3%, according to Inside NoVA CRE.
In Loudoun County, taxable commercial property value surged 45.3% year-over-year, fueled by a 78.7% increase in data center valuations. This growth has reinforced the county’s position as a global leader in digital infrastructure while driving local tax revenue gains.
2026 Outlook: Stabilization with Strategic Shifts
Looking ahead, Northern Virginia commercial real estate trends point toward continued bifurcation in the office sector — with demand concentrated in high-quality, well-located Class B properties and smaller Class A spaces. Industrial and retail sectors are likely to remain tight, while data center expansion will depend on regulatory outcomes and infrastructure upgrades.
Local experts suggest that landlords focus on flexible floor plans, energy efficiency upgrades, and amenity-rich environments to attract tenants. Businesses entering the market should weigh the benefits of sublease opportunities against long-term leases in stabilized properties.
About Boosalis Properties
Boosalis Properties, a commercial real estate company based in Northern Virginia, has helped numerous businesses secure prime locations, sell properties, and navigatethe region’s competitive market.
Leveraging in-depthknowledge of Northern Virginia commercial real estate trends, Boosalis Properties continues to be a trusted partner for landlords, tenants, and investors seeking strategic guidance.
Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice. Market conditions can change rapidly; consult with a qualified professional before making real estate decisions.
