NORTHERN VIRGINIA

1Q11
YOUR CITY HERE
INDUSTRIAL REPORT
1Q11

Overview Stagnant Leasing & Sales

Through March, the nation’s unemployment rate stood at 8.8%, the
lowest average since April 2009. Hiring momentum in the health
care industry continued to trend up, as more than 280,000 jobs were
added over the past twelve months. Manufacturing employment,
specifically in durable goods, has risen by 243,000 since December
2009. However, local government continued to report job losses and
has shed over 416,000 jobs since September 2008.
In Northern Virginia, preliminary unemployment figures for the
month of February are well under the national rate: Fairfax County at
4.6%, the City of Alexandria at 4.7%, Loudoun County at 4.4% and
Prince William County at 5.6%. Arlington County is on track to
deliver the lowest rate of 3.9%, compared to 4.8% at the same time
last year.
Conditions Bottom Out
Market fundamentals in Northern Virginia changed little from the
close of 2010. Direct and overall vacancy rates budged from 14.4%
and 15.1% to 14.6% and 15.3%, respectively, as demand remained
diminished and most tenants are seeking ways to prioritize space
efficiency over growth initiatives.
The average asking rental rate for direct product finished 2010 at
$9.91 per square foot (psf), and held steady through early 2011 at
$9.91 psf. Rents are not expected to fluctuate measurably through the
duration of the year; however, 2012 should show signs of
improvement and thus give landlords the ability to start getting more
aggressive while establishing rental rates at their properties.
Approximately 320,000 square feet (sf) of new leases were signed in
the first quarter, and no properties traded hands to investors or users.
Nearly half of new leasing activity took place in Fairfax County, with
Springfield/I-95 leading the way and Route 28 South/Chantilly
following behind.
Construction is still halted, and only one project is slated to deliver
this year: approximately 125,000 sf will be officially completed in the
second quarter at 10231 Harry J. Parrish Boulevard in Manassas,
which has yet to secure a tenant and has a triple net asking rent of
$7.50 per square foot. No other projects are currently on the radar to
break ground in the near future.
Outlook
The remainder of the year will look much like 2010 as it relates to
vacancy rates and asking rents. Notable game-changers in the
Northern Virginia commercial market, such as BRAC, HOT Lanes
and the Metro extension, are progressing but have yet to come to
fruition. The first phase of Metro construction is expected to wrap up
by late 2013, and HOT Lanes are on track to be completed in 2012.
BRAC relocations will continue, leaving behind pockets of vacant
space in some cases. One positive point is that the federal
government recently avoided a complete shutdown, which would have
had drastic effects on many businesses in the area.
Expect tenants to negotiate favorable deal terms over the next few
quarters with little resistance from landlords. Nearly 7.0 million
square feet (msf) of vacant space is available for lease out of an
inventory of about 44.8 msf, and few tenants are in the market
actively looking for large blocks of space.

Stats on the Go Construction Completions Overall

Rental vs. Vacancy Rates
Rental Rate Vacancy Rate
1Q10 1Q11 Y-o-Y 12 month
Change Forecast 2.0
$12.00 18%
16%
$10.00

1.5 14%
Overall 15.2% 15.3% 0.1 pp
Vacancy $8.00 12%

1.0 10%
Direct Asking $10.21 $9.90 -3.0%  $6.00
8%
Rents
$4.00 6%
0.5
4%
YTD Leasing 323,897 319,944 -1.2%  $2.00
Activity (sf) 2%
0.0 $0.00 0%
2007 2008 2009 2010 1Q11 2007 2008 2009 2010 1Q11
 NORTHERN VIRGINIA
INDUSTRIAL REPORT
1Q11

Market/Submarket Statistics
O ve rall YTD YTD YTD YTD YTD Dire ct We ighte d Ave rage Ne t
Unde r
Submarke t Inve ntory Vacancy Le asing Use r Sale s Construction Dire ct Ne t O ve rall Ne t Re ntal Rate *
Construction
Rate Activity Activity Comple tions Absorption Absorption HT MF OS W/ D
Springfield/I-95 6,143,036 15.8% 54,000 0 0 0 (47,080) (47,080) N/A N/A $13.58 N/A
Route 28 South 5,743,403 17.1% 25,000 0 0 0 10,670 32,421 N/A N/A $11.85 N/A
Route 28 North 6,329,804 17.7% 32,402 0 0 0 62,545 65,045 N/A N/A $9.57 N/A
Manassas 861,186 34.3% 0 0 0 0 (7,919) (7,919) N/A N/A $11.41 N/A
Fle x 19,077,429 17.6% 111,402 0 0 0 18,216 42,467 N/A N/A $11.64 N/A

Springfield/I-95 11,770,052 12.0% 55,739 0 0 0 (11,849) 14,947 N/A N/A N/A $8.74
Route 28 South 3,766,977 14.3% 15,788 0 0 0 151,240 151,240 N/A N/A N/A $7.67
Route 28 North 8,027,528 16.3% 137,015 0 0 0 (168,038) (346,811) N/A N/A N/A $8.21
Manassas 2,112,948 11.5% 0 0 124,800 0 2,747 2,747 N/A N/A N/A $7.69
Ware house /Distribution 25,677,505 13.6% 208,542 0 124,800 0 (25,900) (177,877) N/A N/A N/A $8.31
OS/WD
Springfield/I-95 17,913,088 13.3% 109,739 0 0 0 (58,929) (32,133) N/A N/A N/A $10.75
Route 28 South 9,510,380 16.0% 40,788 0 0 0 161,910 183,661 N/A N/A N/A $10.21
Route 28 North 14,357,332 16.9% 169,417 0 0 0 (105,493) (281,766) N/A N/A N/A $8.82
Manassas 2,974,134 18.1% 0 0 124,800 0 (5,172) (5,172) N/A N/A N/A $9.60
Total 44,754,934 15.3% 319,944** 0 124,800 0 (7,684) (135,410) N/A N/A N/A $9.90
* Rental rates reflect asking $psf/year.
**Revised after the close of statistics. HT = High T ech MF=Manufacturing OS = Office Service W/D = Warehouse/Distribution

Market Highlights
SIGNIFICANT 1Q11 LEASE TRANSACTIONS
BUILDING MARKET TENANT SQUARE FEET PROPERTY TYPE
22630 Dulles Summit Court Route 28 Corridor North Amazon 137,015 Warehouse/Distribution
10400 Furnace Road Springfield/I-95 Undisclosed 54,000 Flex
22695 Commerce Center Court Route 28 Corridor North Turner Associates 32,402 Flex
6636-6672 Fleet Drive Springfield/I-95 Worldpac, Inc. 30,000 Warehouse/Distribution

SIGNIFICANT 1Q11 SALE TRANSACTIONS

BUILDING MARKET BUYER SQUARE FEET PURCHASE PRICE
N/A

SIGNIFICANT 1Q11 CONSTRUCTION COMPLETIONS

BUILDING MARKET MAJOR TENANT SQUARE FEET COMPLETION DATE
N/A

SIGNIFICANT PROJECTS UNDER CONSTRUCTION/RENOVATION

BUILDING MARKET MAJOR TENANT SQUARE FEET COMPLETION DATE
10231 Harry J. Parrish Boulevard M anassas N/A 124,800 2Q11

Cushman & Wakefield of Virginia, Inc.

1600 Tysons Boulevard, Suite 400, McLean, VA, 22102 (703) 448-1200 www.cushmanwakefield.com
* The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing
conditions imposed by our principals. © 2011 Cushman & Wakefield, Inc. All rights reserved.