Bucking national and regional trends, Fairfax City is celebrating a reduction in commercial vacancies across the board for 2023. According to Nicole Toulouse, senior vice president of the City’s Economic Development Authority, “In contrast with larger markets, Fairfax City – with lower, market-rate rent coupled with more right-sized opportunities – is seeing substantial, post-pandemic success.”
General vacancy rates in Fairfax City have decreased from 6.6 percent at the beginning of the year to 6 percent in the third quarter. Office vacancies have seen a similar reduction from 9.8 percent to 9 percent, and retail vacancies have been reduced from 2.8 percent to 2.3 percent. As a result, this reduction in commercial vacancies is anticipated to improve Fairfax City’s expected revenues.
Following the pandemic, Fairfax City Economic Development (FCED) launched several programs that are contributing to these improving numbers. The Lease Incentives for Fairfax Tenants (LIFFT) program began this spring and awards new or expanding City businesses grants if they sign a new lease in a high-vacancy office building, based on the square footage they’ll occupy.
“This program and its promotion have done a great deal to both improve tenancy and commercial brokers’ interest generally in Fairfax City,” said Toulouse. “The FCED also administers a Technology Zone incentive program, in partnership with the City’s Commissioner of the Revenue, to qualified technology businesses signing a five-year or more lease in Fairfax City. This incentive abates business-license taxes for qualified businesses on a decelerating basis, for five years.”
“We’ve long felt that Fairfax City is optimally positioned for the relocation and growth of businesses, particularly those looking to locate in the geographic center of Northern Virginia’s steady and innovative economy,” added EDA Chair Beth Young. “FCED’s programs create expanded opportunities for businesses who otherwise may look elsewhere.”
Economic Development Director Chris Bruno said this new data shows that Fairfax City is competitive and in demand. “As a city, we provide our residents and businesses with excellent services, so they want to be here,” he explained. “Northern Virginia and Fairfax City are the ideal locations to start, expand and develop new companies. I applaud the staff for developing smart programming that allows FCED to advance the goals of the Mayor and City Council in a meaningful way.”
The bottom line, said Toulouse, is that “People are looking for value and resources. Fairfax City has attractive rental rates, business assistance resources like direct grants, and procurement or financing guidance from the half dozen SBDC [Small Business Development Center] partners headquartered here. We feel confident about our value proposition to those looking to relocate.”