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NORTHERN VIRGINIA-The growth of high-technology enterprises in Northern Virginia, and those that service them, particularly law firms, has turned Northern Virginia into the strongest office market in the country. During the second quarter, this area saw 1.48 million sf of net absorption, 74% of it in class A space, according to a report by Delta Associates of Alexandria, VA.

Year to date, absorption amounted to more than 5.31 million sf, 70% of last year’s record. Another record is the decline in the overall vacancy rate, only 2.7% at mid-2000, the lowest ever. A year ago at this time, the rate was 3.2%. Chantilly is the only submarket here where the vacancy rate has risen, to 11.2%, the report says.

In addition, Q2 construction starts amount to 4.8 million sf, the highest since 1997. During this period, 900,000 sf was delivered, 43% of it pre-leased, compared to 2.9 million sf in the first quarter of 2000, 82% pre-leased. Delta projects that as this new supply comes to market vacancy rates will rise to 6% to 7% by the end of next year.

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