Fairfax County needs to take a more hands-on approach to helping owners repurpose aging commercial properties, one local government leader says.
“We know where they are. We have this information. Let’s identify the top 10, 15 opportunities and let’s go to them,” Board of Supervisors Chairman Jeff McKay said at an Economic Initiatives Committee meeting on Tuesday (Feb. 10).
In 2025, more than a million square feet of outdated office space was removed from the local inventory, with property owners either razing buildings to allow something new or repurposing them for alternate uses, Fairfax County Economic Development Authority (FCEDA) staff told supervisors at the meeting.
While trending in the right direction, county officials need a more “aggressive approach,” McKay said.
The effort, expected to be rolled out at the board’s regular meeting next Tuesday (Feb. 17), likely will focus on segments of the office market where vacancy rates are highest.
Currently, the highest level — “trophy class” — office segment has a relatively low 12.3% vacancy rate. Class A space, the next highest quality, had a vacancy rate of 20.6%, while Class B/C space had a vacancy rate of 26.8%.
Owing in large part to the trophy-class situation, the county ended 2025 with an overall office vacancy rate of 17.4% — its first decline since the onset of the pandemic in 2020.
While the days of developers building properties “on spec” without an identified main tenant seem to be over, the market for top-quality space appears to be steady.
“We’re starting to see signals for these larger deals,” said Anna Nissinen, a senior vice president at FCEDA.
She acknowledged, though, that prospective tenants “are taking longer” to make decisions, and “the competition is really, really stiff.”
The Feb. 10 discussion on the office-leasing environment was part of a larger presentation on current economic conditions in the county and region.
It is “a bit of a mixed bag,” FCEDA Director of Market Intelligence Stephen Tarditi acknowledged.
On the plus side: “We have a lot of the foundational assets” to entice and grow businesses in sectors including computer infrastructure, scientific research/development and satellite communications, Tarditi said.
Despite jobs dipping due to the Trump administration’s cuts, federal procurement dollars flowing to Fairfax County firms increased slightly to $41.4 billion in 2025 even as the regional total declined.
Capital investment flowing to Fairfax took a hit at the start of 2025 but has rebounded since, FCEDA officials said.
Mount Vernon District Supervisor Dan Storck, who chairs the economic initiatives committee, said the county was well-positioned to build partnerships in filling office space.
“We’re going to be able to capitalize on the opportunities,” Storck said, suggesting Fairfax continues to “demonstrate remarkable resilience” despite headwinds.
McKay said that while Fairfax County tried to be a good regional partner, its efforts need to be focused on meeting its own challenges.
“Our first priority is the county,” McKay said, expressing hope Fairfax County will rebound “quicker than anyone else in the region.”
Changes to revitalization incentives proposed
At the committee meeting, Fairfax County staff also presented new plans for establishing parcel-specific “economic revitalization zones” to qualify for tax-abatement incentives.
The changes laid out by staff would augment an existing economic incentive program approved in Fairfax in 2020.
“We have been doing outreach to the building industry and other groups,” said Elizabeth Hagg, director of the Community Revitalization Section of the Department of Planning and Development.
The revised program would maintain support the county’s existing economic revitalization districts: Bailey’s Crossroads, Seven Corners, McLean, Richmond Highway, Springfield, Annandale and Lincolnia.
Several areas adjacent to current districts could be incorporated into the program, such as Culmore becoming an extension of the Bailey’s or Seven Corners districts, and as previously floated in 2024, new districts would be created in Huntington and the Lake Anne area of Reston.
Eligibility requirements under the current incentive program would not change. They typically require developers to consolidate two or more parcels totaling at least two acres.
Existing parcels on the site can be redeveloped or repurposed under the revitalization program.
“Redevelopment tends to be more housing,” Hagg said. “These areas are good places to see this happen.”
At the meeting, concerns were raised by Sully District Supervisor Kathy Smith about the length of the expanded program — which is proposed to run into the 2040s — and how areas were chosen.
“Is there the bang for the buck?” Smith asked. “Have we stepped back and looked to see the impact? I really want to understand the impact. There’s a lot of questions.”
Storck said complex issues need to be thought through before any changes are implemented.
“Flexibility is the key to this,” he said. “Every situation doesn’t fit into the same bucket.”
