Marcus & Millichap: D.C. retail transaction activity up 30% as Northern Virginia vacancy holds

Across the Washington, D.C., metro, landlords leased more retail space than they vacated in 2025 and transaction activity rose roughly 30 percent year over year, slightly outpacing the national rate, according to a Marcus & Millichap report that Connect CRE covered. The absorption result arrived in a year that carried federal government layoffs and broader economic headwinds across the region, which is what gives a positive leasing number its weight. For a landlord, more space leased than vacated is the precondition for holding rents.

Brian Hosey, a senior managing director and market leader at the brokerage, described Washington-area retail as resilient despite ongoing labor market pressures and credited improving office fundamentals and steady Northern Virginia conditions with supporting demand. The submarket detail backs the Virginia half of that: Northern Virginia's retail submarkets held vacancy steady year over year, while the District and the Maryland suburbs both recorded increases.

The three submarkets the coverage names individually are all on the Virginia side. Retail transaction activity tripled in the Dulles Corridor and nearly doubled in the Alexandria/Interstate 395 area and Southeast Fairfax County, and Hosey said Northern Virginia posted some of the metro's largest gains in transaction volume. The District and the Maryland suburbs, the two jurisdictions where vacancy rose, get no separate transaction figures in the coverage.

Those are ratios, not dollars. The coverage gives no dollar volume for the metro or for any of the three corridors, no cap rates and no transaction counts, so the 30 percent metro increase and the submarket multiples cannot be sized against one another; they describe activity moving faster, not prices moving higher. The only cross-market comparison available is the one the metro already beat — the national rate.

Vacancy is where the report does the most work. Northern Virginia held flat while the District and the Maryland suburbs loosened, which means the metro's headline numbers describe two halves of the same map. Whether that split runs along asset type is not established here; the coverage breaks nothing out by property type.

What carries into 2026 is whether the corridor's gains mark a durable shift in where suburban retail capital clears or a one-year response to the gap between a tight Virginia market and a loosening one elsewhere in the metro. Another year of steady Northern Virginia vacancy against rising District and Maryland vacancy would point to the first; a volume figure that gives back the tripling would point to the second.