ONE OF THE WETTEST SPRINGS in memory didn’t dampen the commercial office market in Northern Virginia, but with the warmer days of summer, prospects have begun heating up for what could become one of the hottest markets ever.

Building on strong 2017 results Northern Virginia vacancy rates improved slightly through the first quarter of 2018 at roughly 14 percent – nearly 4 percent higher than the national average, according to CoStar’s first quarter report.

Omeed Naderi, CoStar market analyst, pointed out in his June 13 presentation at NVAR’s Leasing Summit that overall office demand has been flat for the past several years due to federal budget disputes. However, he said, “Northern Virginia’s positive business climate has been successful in recent years, attracting major tenants including a number of the largest leases in the Washington, D.C. market.”

By year end, total available office space in Fairfax County had grown to more than 117 million square feet, with more than 18 million square feet remaining vacant, according to the Fairfax County Economic Development Authority’s (FCEDA) 2017 real estate report. The highest vacancy levels remained in the Bailey’s Crossroads and Newington/Lorton submarkets, where vacancy rates hovered near 40 percent.

Similarly, of the roughly 10.5 million square feet of office space currently under construction in the Washington, D.C. market, the largest, by far, is the nearly 1 million square-foot Capital One headquarters building being constructed in Tysons. An additional 625,000 square feet is being built in Springfield to house the new headquarters for the Transportation Safety Administration (TSA).

As the summer winds begin to blow, the likelihood for further major improvements in Northern Virginia may turn on the pending decision by Seattle-based Amazon about where to locate its second headquarters.

Amazon predicts its new campus will occupy roughly 8 million square feet of office space and add some 50,000 new workers and nearly $5 billion in new investment to the local economy over the next decade. After a nationwide search, in which 238 local jurisdictions submitted proposals that were whittled down to a final 20 options by Amazon executives, Northern Virginia still remains under consideration. The company expects to make its final decision by the end of the year.

In the meantime, adding a little more heat to the summer outlook, there are reports that Virginia Governor Ralph Northam has also been showcasing several Northern Virginia locations, from Alexandria to Crystal City, Tysons and Loudoun County, as a potential second headquarters location for Apple Corporation. Although Apple has not made public the potential size of its local expansion, estimates are for an additional 4 million square feet of space. This would support an estimated 20,000 new workers added to the local economy over the next several years.

Northern Virginia remains an attractive site for both campuses. It offers a well-developed positive business climate that is already home to the headquarters of 10, and soon to be 12, of the Fortune 500 largest corporations in America. Multiple high-quality universities attract students from around the world to support the human resource needs of existing and potential new corporate residents with a young, well-educated and highly diverse work force. Northern Virginia’s high-tech infrastructure, extensive mass transit facilities, densely populated walkable neighborhoods, and convenient international airports are all attractive considerations for a growing corporate presence.

If Amazon and Apple decide to locate in Northern Virginia, along with Bechtel Corporation, which recently announced the relocation of its headquarters from San Francisco to Reston, there will be a profound impact on the region’s development – fueling Northern Virginia’s future economic growth.

“The benefits are so humongous,” Dr. Stephen Fuller, head of the Stephen S. Fuller Institute for Research on the Washington Region’s Economic Future at George Mason University, predicted. “This is really big.”

Northern Virginia has been absorbing roughly 50,000 new jobs a year for the past several years, but the difference is that the new corporate jobs would be high-paying jobs for skilled professionals, rather than the lower-paying tourism and entertainment jobs that have fueled much of the region’s recent growth.

Looking towards the future, the addition of Amazon and Apple headquarters in Northern Virginia could be the catalyst that brings together the patchwork of current city and county jurisdictions that comprise Northern Virginia – with a focus on cementing the region as an economic powerhouse.

Realtors® can play a critical role in this transformation by working with developers, property owners, local government officials and potential tenants to create a thriving Northern Virginia. In these relationships, Realtors® help position the region as a strong place to invest in commercial real estate, while attracting and retaining more of the young, diverse workforce necessary to create and sustain a hub of innovation.

The stakes for Realtors® couldn’t be higher. As vacancy rates go down and lease rates go up, economic returns are stronger for everyone, including the agents of change: the Realtors® of Northern Virginia!