Alexandria, Virginia real estate market sees high vacancy and modest rent gains

A mid‑year review of Alexandria, Virginia’s commercial property sector shows persistent headwinds. Office vacancy remains high, with the broader Northern Virginia market reporting a regional vacancy rate of about 23%, while Alexandria’s own rate sits near 21.6%. Construction activity is at historic lows and financing costs remain a barrier, prompting developers to focus on office‑to‑residential conversions, of which 3.7 million square feet have been approved or delivered over the past decade.

Retail space is performing better, with Old Town vacancies at just 5.8% and visitor traffic up 4.6% year‑over‑year. Meanwhile, apartment rents have risen modestly since the start of the year. The median rent in July was $2,230 (‑2.7% YoY) but remains 3.4% above the start‑of‑year level and above the Washington, D.C. median of $2,172. Rent peaks were reached in June 2025 at $2,306 before a slight decline.

Overall, Alexandria’s market is adapting through mixed‑use projects and a resilient retail sector, even as office demand stays subdued.