ARLINGTON, VA–Since 2014, associations and non-profits have been moving from their strongholds in the the District and elsewhere in Northern Virginia, according to a new research note by JLL — and the recipient of most of this activity is Crystal City.
The reasons is a growing rent discount between Class A space in Crystal City and Class B space in Washington DC. For these cost-conscious tenants Crystal City’s $39.39 per square foot FS vs. Washington, DC’s $51.48 per square foot FS will continue this trend, JLL predicts.
Of the 580,174 square feet of tenants who have relocated into Crystal City, 367,597 square feet came from DC, comprising 11 associations and five non-profits, according to JLL. It notes that three buildings have captured the majority of these tenants: 1400 Crystal and 2511 Jefferson Davis — both of which were substantially renovated in 2013 — and 251 18th S, which located directly next to the Crystal City Metro entrance. The rent discount for Class A space in Crystal City ($39.39 p.s.f. FS) vs. Class B space in Washington, DC ($51.48 p.s.f. FS) will continue the trend of cost-conscious tenants exploring this market.
The RB Corridor is the other big winner, JLL also reports and with a broader array of tenants to boot. Of the 482,545 square feet of total tenant migrations, 314,443 square feet moved from DC. Among tenant types, no one particular industry dominates, a sign of the corridor’s shift away from a heavy reliance on government agencies and contractors, JLL says. New tenants include tech, media, lobbying, education, consulting and nonprofit. JLL writes:
While the RB Corridor only has four Trophy and Class A blocks > 100,000 s.f. available, it will remain an attractive market for tenants relocating from DC into Trophy buildings with monument views.