National Landing’s real estate market in the first quarter showed a promising start to 2024. Here are some exciting trends and insights across all markets — office, multifamily, retail, and hospitality.

A growing in-person workforce

National Landing’s return-to-office trend is growing, with employees returning to in-person, daytime jobs at just under 70% of pre-COVID numbers. This trend is likely to continue as more companies shift their return-to-office policies to three or more in-office days per week. Additionally, as new retail and restaurants arrive to National Landing, in-office work will be supported by more attractive amenities and new destinations.

Office is NOT dead

While markets across the country are right-sizing to hybrid work trends, National Landing’s overall office vacancy rate is stabilizing. In the first quarter of the year, National Landing’s office vacancy was 24.5%, representing a slight increase from the last quarter of 2023. This rate reflects all office buildings including those that are completely vacant and no longer leasing. If only leasable office space in National Landing is considered, the overall vacancy rate was 20.4% at the end of the first quarter – a rate more comparable to surrounding markets. According to recent news, at least two office properties will come offline when remaining leases expire in the second quarter of this year.

With new highly amenitized offerings, employees returning to the office, and vacancy rates stabilizing, National Landing’s future as a thriving downtown is foreseeable. There’s evident progress as plans for a new office building at 1800 South Bell Street were submitted in January for county approval and exterior renovation plans for the office building at 2011 Crystal Drive were approved.

Meeting residential demand

In the first few months of 2024, over 800 new residential units entered the market with the completion of National Landing’s newest high-rise deliveries, The Grace and Reva, at 1900 Crystal Drive. Multifamily demand in National Landing is strong, with more people moving in than out in Q1, driving a slight rise in asking rents. National Landing’s overall asking rent remains just under $3 per square foot, lower than comparison markets teetering around $3.50 per square foot. Later this year, an additional 500 new units will arrive in Potomac Yard with the completion of Hazel and Azure. With over 1,300 residential units delivering this year, 2024 will see the largest delivery of residential units in the last decade. This is a promising trend, as downtowns where people live can sustain vibrant streets and retail.

The retail comeback

Consumer spending held steady across the U.S. in Q1 for both ecommerce and brick-and-mortar retail, despite persistent inflation. National Landing’s retail areas are seeing an upswing in foot traffic following the end of the 2023 holiday season, and most are seeing as much foot traffic now as they did before the pandemic, in Q1 2019. New retail offerings at the recently renovated Crystal and Clark, at 2450 Crystal Drive, include Subway and New Yorker Grill, with others anticipated later this year. New ground floor restaurants and retail will soon open at The Grace and Reva.

A few establishments around National Landing were lost in Q1 2024, including some of the legacy businesses located in the Crystal City Underground shops. Recognizing the challenges small businesses face in uncertain times, the National Landing BID has partnered with Arlington Economic Development to support the National Landing Relaunch Program, which provides technical assistance to aid businesses in transition.

Hospitality on the rise

Following typical seasonal declines, the hotel market in National Landing had a strong first quarter. Visitor occupancy is up three percent with virtually no rate change from last quarter. National Landing remains a desirable and affordable choice for consumers. Although rates are relatively stable, hoteliers in National Landing earned more money in the first quarter (per room), compared to Q1 2023 and pre-pandemic Q1 2019. Data shows earnings were up nine percent from Q1 2023 and 20 percent from Q1 2019, proving National Landing’s increasingly popular appeal and competitiveness within the region.

Stay tuned for Q2 takeaways

National Landing’s positive start to the year underscores its promising market potential with an increasingly reliable spending base while also validating the journey toward an 18-hour downtown district. Following construction completions in the first quarter, more residents and more retailers will soon call National Landing home, with dozens of eateries and gathering spots anticipated to open before the end of the year, adding to the more than two dozen retail openings in 2023.

Reach out to Ashley Labadie, planning & economic development senior manager, for more detailed market data about National Landing. Be sure to follow us on social media and subscribe to our newsletter for the latest announcements and news about National Landing.

Read our Q4 2023 Market Snapshot.