Washington, D.C. Retail Market Report

Hiring in outer Virginia submarket hastens retailer expansions. Frederick County, Virginia is currently on track to record a five-year population growth rate of 7.7 percent through 2027. Housing formation here is expected to double the marketwide pace over the next four years. Job growth, headlined by large-scale industrial expansions this year from Geodis Logistics and Packaging Corporation of America, will contribute to drawing transplants long-term. These hiring plans have incentivized retailers to expand in the area. Local net absorption of 164,000 square feet over the year ended in March represented a 12-year high, helping cut vacancy by a historic 450 basis points to a multi-decade low of 1.2 percent. Despite emerging space demand here, supply additions will be nominal in 2023. This should steer expanding retailers to existing floor plans, keeping vacancy historically low near-term.