Q2 2024 Market Snapshot
National Landing’s second quarter – April 1 through July 31 - saw positive trends following a strong start in 2024’s first quarter. See below for exciting second quarter highlights across all markets - office, residential, retail, and hospitality.
Office and In-Person Work Gain Momentum
National Landing continues its transformational journey towards a more balanced, 18-hour downtown with office right-sizing leading the way. Some older office properties are being taken offline and are no longer leasing while in pursuit of repositioning to either trophy office or a new use entirely. If only leasable office space in National Landing is considered, the overall office vacancy rate is 20.8%—a minute rise from 20.4% at the end of the first quarter. Importantly, overall office vacancy decreased by 10% from Q2 2023 and is seeing increases in leasing activity. National Landing remains an attractive market for businesses seeking new leases given its stable asking rents of around $37/SF - the lowest among comparison markets - and both public and private investments in amenities are enticing employees to return to in-person work. Q2 saw both an increased number of in-person workers as well as increased frequency of weekly visits to the district suggesting a positive return-to-in-person work trend.
Steady Multi-Family Leasing & More Affordability
National Landing continues to meet the area’s residential demand as multi-family occupancy remains high at nearly 91% overall. After delivery of over 800 units at The Grace and Reva in Q1, Class A multi-family occupancy is on the rise as leasing ramps up. Class B multi-family also saw increased occupancy and virtually zero year-over-year change suggesting continued strong residential demand. Move-ins outpaced move-outs in Q2 even as overall asking rents increased by four percent.
Housing affordability in the district is slated to increase with the May announcement that Marlowe Apartments will continue to offer affordable rents after renovation. In June, Amazon pledged another $1.4B to affordable housing, including areas surrounding HQ2 in National Landing. Also in June, developers of the 105-unit affordable housing project at Melwood on 23rd Street submitted plans for County approval.
Retail Remains a Destination Driver
National Landing saw a quarterly increase in foot traffic around major retail areas with a 16.8% positive change from this year’s first quarter. Q2 welcomed the opening of Van Leeuwen Ice Cream at The Grace along 18th Street S and NiHoa along Crystal Drive across from Water Park, as other anticipated retailers continue interior construction in storefronts throughout the district. Retail is steadfast as a destination driver as proven by a nearly 10% increase in foot traffic from last year’s second quarter.
The National Landing BID continues to work with Arlington Economic Development’s BizLaunch team through the ReLaunch National Landing program to provide relocation aid and other professional services to small, legacy businesses in National Landing. Portofino’s on 23rd Street, for example, completed the program in this year’s second quarter and now has a brand-new mobile-friendly website.
Hospitality on the Rise
National Landing’s hotel market continues to show signs of growth, affordability, and regional competitiveness. Visitor occupancy reached 82.3% in National Landing, marking the highest percentage of rooms occupied in the district since the pandemic. At $225/room, average daily rates in National Landing saw a 22% increase from 2024’s first quarter and a five percent increase from 2023’s second quarter, slightly surpassing comparison markets in northern Virginia while remaining below DC submarkets. Still, National Landing saw an increase in revenue per room signaling market strength. Excitingly, announced in May, 10 additional daily flights will soon come out of National Airport and will likely amplify the district’s hotel market.
Stay Tuned for Third Quarter Takeaways
National Landing expects to see continued openings of eateries, gathering spots, and amenities across the district. Just under 500 additional units are slated to arrive later this year in Potomac Yard with the completion of Hazel and Azure and nearly 800 units will be delivered early next year at 2000/2001 South Bell Street. The district continues to see investment in projects large and small, further establishing itself as a premier downtown seeing historic transformation and innovation. As construction activities come to a close in early 2025, a number of shovel-ready projects will be poised to commence as inflation settles and more favorable markets arise. Stay tuned for National Landing’s third quarter market snapshot this fall!
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.