Absorption stability underscores top performances in two key submarkets:
Northern Virginia posted 86,822 square feet of negative net absorption in Q2 2026, but the regional figure masks sharp divergence beneath it, seeing decisive rebounds in the Rosslyn-Ballston Corridor (168,397 square feet, its strongest quarter in years) and the Toll Road (68,029 square feet) nearly offset a concentrated wave of losses in Tysons (-129,115 square feet), Alexandria (-80,901 square feet), and Fairfax Center (-76,794 square feet).
Sublease space is clearing, but mostly through withdrawal, not demand:
Regional sublease availability fell to 2,383,845 square feet (2.07% of inventory), a reduction of 411,122 square feet from Q1, with the Rosslyn-Ballston Corridor (160,193 square feet) and the Toll Road (143,090 square feet) driving most of the improvement. Much of that reduction came not from subtenants signing new deals, but from older sublease listings being withdrawn once the prime tenant’s lease expired and re-marketed as direct space. The effect is still constructive, since it clears discounted shadow supply that has undercut direct rents, but it overstates genuinely new subleasing demand. National Landing bucked the trend entirely, the only submarket where sublease availability grew, pushing its rate to 3.58%, the highest in the region.
Conversion pipeline continues to reshape the competitive office landscape:
With no new office construction underway anywhere in the region, this quarter moved the conversion story from paper to physical activity. JBG Smith broke ground on the 315,000-square-foot residential conversion of 2200 Crystal Drive in National Landing, Arlington County approved the conversion of 1800 and 1901 South Bell Street, and Fairfax County approved the redevelopment of 1950 Old Gallows Road in Tysons. The Rosslyn-Ballston Corridor’s approved-plus-proposed pipeline alone totals roughly 2.61 million square feet, among the largest in the region, just behind Toll Road.