By Robbie Webber
How much is 1000 feet worth when walking to the office? If you are leasing office space in the Reston-Ballston Metro corridor in Arlington, Virginia, there is up to a 30 percent premium to being that much closer to the station. Many buildings claim to be “steps from Metro,” but exactly how many steps is extremely important.
That is the conclusion of a recent study by real estate service firm Cushman & Wakefield. They surveyed the rents being charged for new office space in the rapidly developing corridor on the Orange Line and found that an office one-twentieth of a mile (264 feet) from a Metro station commanded a significantly higher rent than one that is one-quarter mile (1,320 feet) away.
The difference in walking time between those two offices is only four minutes—one minute for the one-block vs. five minutes for the quarter-mile—but whether for time-management, weather-exposure, or just the perception of convenience, those four minutes seem to make a big difference. Businesses are willing to pay that premium, perhaps betting that they will be able to attract employees who will be happier and more productive.
And the vast majority of new office development is occurring within that one-quarter mile area; 92 percent of the new office construction in the corridor is within that distance. Offices that are farther than one-quarter mile from a station have even lower lease rates.
Apartments and condos also showed a premium for being closer to Metro, but the exact difference is harder to calculate because of the wider variation of building age, unit amenities, and other residential variables. Still the study estimates that comparable apartments one block from Metro rent for 23 percent more than those in the area in general.
The study was done as a case study to gauge the potential for new development in the Fairfax County corridor soon to the served by the Silver Line. Already, Tysons Corner is seeing significant development despite the fact that the new line won’t begin running until sometime this spring. With four Metro stations, the formerly car-oriented suburb is seeing a boom in transit-oriented development, and both developers and potential renters are eager to know exactly how much those few extra steps closer to the Metro will be worth.
Robbie Webber is a Senior Associate at SSTI.