Unplanned Obsolescence: Fairfax County’s Office Parks

Aging, outdated, not within walking distance of anything.... 75% of Fairfax County's commercial/industrial real estate is obsolete.

Aging, ugly, outdated, not within walking distance of anything….75% of Fairfax County’s office space is obsolete.

There is some scary data hidden in Fairfax County’s budget numbers. Back in 1990, commercial/ industrial property comprised 26.7% of the county’s total real estate property tax base. Revenues from high office valuations gave the county leeway to keep the tax rate low — great for homeowners. But the commercial/ industrial share has declined since then to 19.12%, which puts Virginia’s largest political jurisdiction in a bind as county officials prepare the Fiscal 2018 budget.

That commercial/industrial crucial ratio has been known to jump around, depending upon market conditions. The 26.7% number, the highest rate recorded, came only seven years after the lowest rate recorded, 16.12% in 1983, according to a County Executive Budget Presentation published in February. So, things can change. But there is reason to think that the ratio will stay low for several years more.

The office vacancy rate in Fairfax County runs around 20 million square feet out of 116.4 million square feet. Meanwhile the Metro Silver Line is spurring new construction as employers seek Class A office space with mass transit access. Almost 2 million square feet are under construction in Virginia’s largest office center, Tysons, and nine major applications with 9 million square feet are under review.

While the new construction is good news for the Fairfax tax base, here’s what’s not: The executive presentation quotes the Fairfax County Economic Development Authority as saying that 73% of the county’s office space is obsolete.

I’m not sure how the EDA defines “obsolete,” but it sounds ominous. I’m guessing that it means the buildings are aging physically, need re-wiring for state-of-the-art telecommunications, and/or have antiquated layouts incompatible with collaborative work styles. Furthermore, I’d hazard a guess, the office parks reflect a ’70s- and ’80s-era autocentric design, which means they lack the walkable ambience that Millennial employees are looking for these days.

It’s one thing to invest millions in modernizing an office building in a desirable location; it’s another investing millions to update a building in an office park where no one wants to work anymore. I would hypothesize that a large percentage of the county’s commercial/industrial office buildings will continue to get older and more out-of-date. Rents will decline, property values will decline, and the county tax base will continue to erode.

Let this be a warning to other suburban counties across Virginia. Unless they can figure out how to reinvent their old office parks as walkable, mixed-use districts where people these days prefer to work,  they, too, will find themselves heirs to obsolete office parks that leech value and undermine their tax base. The difference is that Fairfax County could see a revival if President Trump succeeds in ramping up defense spending. Henrico, Chesterfield, Virginia Beach and other jurisdictions will have no such luck.

(Hat tip: Andrew Roesell.)

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7 responses to “Unplanned Obsolescence: Fairfax County’s Office Parks

  1. This massive amount of older now obsolete buildings in Fairfax County create a problem but also a opportunity.

    It really makes no difference to this story but, if my memory is correct, the building that Jim has pictured above was built for an agency of the US government defense establishment in the mid-1980’s. It was a grade A building. It was financed, designed and built by private interests on the strength of a long term lease to a US Gov. Agency that needed a highly secure special use Building. The private owner got the deal because his site’s location and the building he proposed to build was determined to best fit the government tenant’s special needs. The private owner also built next door another large special use building of similar size and particular government purpose. Both were built on the same private road that ended in cul-de-sac. A few similar, but lower and smaller buildings, were also built across the same short private road.

    All these buildings had a single access point off the same private road onto a much older, and poorly engineered, two lane public road that flanked the Dulles Toll Road. The projects, although isolated access wise, were roughly a half mile distant on east and west along the two lane public road from two access points onto the Toll road that ran alongside the two lane road.

    Hence the entire site was mostly single purpose, built mainly for several large Gov. tenant office users on a relatively isolated location with a single access onto a narrow public road that at the time of competition offered short, quick and easy access to the entire region – Reston, Dulles Airport, Tysons corner, the Capital Beltway, DC, Maryland, Arlington, Alexandria.

    The project was built with high quality materials, design, layout and function. The developer and project was first class, careful, creative, well executed. It did however generate heavy regional traffic at the start and finish of each work day. Hundreds, perhaps thousands, of cars dumped at the same time onto the two lane road, and they were headed for destinations throughout the region. For a while this still worked.

    However, the rapid and poorly planned development boom that occurred around the site far more quickly than had been expected revealed the shortcomings of the site otherwise locational advantages. Its single access limitation soon were compounded like Topsy by the many traffic choke points that were soon build into the regions entire road grid both near and far.

    Thus, the one way commuter traffic in and out of the site morning and evening piled up when it tried to dump into the old two lane public road already jammed up with east west regional traffic jammed up at the two Dulles Toll Road access points a too short distance away. And, far too often, this was only the start of the commuters’ journey. Every year matters got worse. Every year they were as Fairfax Country kept on building more of the same kinds or buildings and roads as if there was no tomorrow.

    Tearing up and starting over in some cases is right and feasible thing to done. Many such buildings have paid for themselves many times over. But filter into old projects creative and imaginative ideas that EAT TRAFFIC will create enormous compounding benefit far into our future, and our children’s future. It is a great opportunity. The sooner Fairfax County confronts this problem and turn it to great advantage the sooner its death spiral will end and its renaissance with begin. It advantage in location is still unique and timeless, if it will only grab at last this opportunity.

    • Thus, the one way commuter traffic in and out of the site morning and evening piled up when it tried to dump into the old two lane public road already jammed up with east west regional traffic at the two Dulles Toll Road access points a too short distance away. Far too often, this was only the start of the commuters’ journey.

      Every year matters got worse. Every year they compounded as Fairfax Country kept on building more of the same kinds or buildings and roads as if there was no tomorrow.

      Tearing up and starting over in some cases is the right and feasible thing to do. Many such buildings have paid for themselves many times over. But we can also filter into old projects creative and imaginative ideas that EAT TRAFFIC. This will create enormous and compounding, indeed cumulative benefits, far into our future, and our children’s future, not only for Fairfax but for the entire DC Region.

      THIS IS A GREAT OPPORTUNITY.

      The sooner Fairfax County confronts this problem and turns it to the region’s great advantage, the sooner northern Virginia’s death spiral will end and its great long overdue renaissance will begin.

      Fairfax County’s advantage in location is still unique and timeless, precious and invaluable. But only if it will at last grab this opportunity.

  2. Reed makes interesting points. You see the same kind of passed-by office parts in Tidewater and the Richmond area. Maybe they can be repositioned to do something useful.

    • Agree. I happened to attend an AAU basketball tournament that included my son’s team. The games were played at different gyms so I ended up driving through and around the City of Richmond, Henrico County and Chesterfield County. If there’s a human settlement pattern difference between the Washington Metropolitan Area and the Richmond Metropolitan Area I fail to see it. Richmond seems to feature the same low density housing, strip malls, crowded roads and antiquated office parks that are so prevalent in the DC area.

  3. Fairfax is hardly Johannesburg, but the latter demonstrates, sadly, what can happen when an entire central business district is abandoned to squatters.

  4. Fairfax County supervisors approved rezoning after rezoning and said – roads aren’t our problem – VDOT can fix it. How well did that work out?

    The 2010 revision to the Tysons Comp Plan was the first time the supervisors ever approved something that tied land use to infrastructure. See Table 7. Then after incredible pushing from Tysons’ neighbors, they approved a plan to fund the transportation needs and also conducted three “What if We Build It All” master traffic studies. And now they are about to approve more transportation needs in Table 7B.

    How is traffic? Gawd Awful. But at least the County realized the status quo didn’t work.

  5. Need a definition of “obsolete” but I am persuaded by TMT’s view that commercial development that happened 20-30 years ago can effectively become “stranded” or choked by other incremental development that subsumes the traffic network that originally was fine but over time get’s congested.

    So if older commercial development – is now harder to get to – it”s no longer “Class A” but you can’t just fix it by remodeling because the traffic network is no longer “free-flowing”.

    and yes it will lose value .. including assessment value – but how do you fix it?

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