September 7, 2022 | By Shannon Flanagan-Watson
Part 1: The Changing Office Market Landscape
As we plan for the future, it is a pivotal moment in our post-pandemic economic recovery as people continue to work and collaborate differently, often from home or another remote location. The shift in how and where we work has offered more flexibility which has been embraced by many workers. It has also challenged employers to rethink how work gets done and how to foster collaboration in different and meaningful ways within their organizations.
Our workforce in Arlington is using office space differently, and we are working to evaluate how the County can be more proactive and flexible when it comes to the current and future uses of commercial spaces. Over the next few months, we’ll consider these challenges, how the County is responding, and some of the new ways of thinking about office space and economic development as we navigate the “new” way of doing business.
As of Q2, Arlington County faces an unprecedented 20.8% office vacancy rate, according to CoStar, which puts pressure on our tax base. The federal government and nonprofit organizations plan to reduce their office footprints in the coming years, and we face increased competition for corporate headquarters and tech talent. While Amazon HQ2’s construction is progressing on schedule by adding new product to the market rather than filing existing buildings, this new state-of-the-art office space will not drastically reduce the County’s vacancy rate.
Notably, there have been significant wins in recent months with two international corporations, Boeing and Raytheon Technologies, announcing the much-welcomed news they are relocating their respective global corporate headquarters to Arlington. However, these wins alone do not solve the overall challenges that come with an increasingly hybrid and remote workforce.
The complex challenges that Arlington and many metropolitan areas face post-pandemic call for multifaceted recovery strategy with input from multiple stakeholders. As one element of AED’s recovery strategy we are working alongside Arlington’s Planning Department, to foster commercial market resiliency in Arlington. It requires creative thinking and nimble approaches. Next month, we’ll discuss how we’re addressing these challenges and working directly in partnership with our business community to help it thrive.