The Town of Leesburg has come a long way in the last decade when its commercial occupancy, and overall attractiveness, is concerned.
Economic Development Director Russell Seymour offered an update to the Town Council July 26 on the town’s current commercial vacancy rates. He gathered much of the data presented to the council from COSTAR, perhaps the industry standard for commercial real estate information.
The office market in Leesburg has perhaps come the furthest. Seymour compared the second quarter of 2013 to the same time period of 2020, prior to COVID’s arrival. Office vacancy dropped from almost 30% in Q2 2013, to 10.5% in the second quarter of 2020. But of course COVID changed that situation over the year, with the second quarter of 2021 showing office vacancy almost doubling to 19%.
“When COVID hit one of the things we saw was a lot of one-office businesses found out now you could actually work from home so you noticed the uptick,” Seymour said.
In all of Loudoun County, office vacancy stands at just below 30%, he added.
It’s been a different story for retail vacancy. In the second quarter of 2013, retail vacancy in town stood at 13.3%. It had jumped to 16.4% in the second quarter of 2020, and a year later, had grown to 23.7%.
The trend of growing retail vacancies started before COVID, Seymour emphasized, but the proliferation of the online retail marketplace, accelerated during the pandemic, has played a big role in that. Another big piece of that trend is that the retail market has become over-saturated, something he said in talks with his economic development peers that other localities are seeing as well.
The key for the council, he said, is protecting the available commercial land it has left. Seymour said he was troubled by the amount of commercial land that is being rezoned to accommodate residential development.
“From an economic development standpoint I have to fight tooth and nail for every piece of commercial space we have left, and it concerns me when I see it flipping because it’s a pattern being repeated over and over,” he said.
Seymour said the piece that’s missing from the town is employment.
“I don’t think we have to go after retail. Retail’s here, it follows the money,” he said. “We need to generate employment opportunities. If you find a way to do that you’re going to benefit retail across the board more than simply building houses.”
The way the council can address that problem, he said, is by avoiding residential rezonings.
“Developers’ primary focus is going to be residential first, retail second. Don’t try to change back to residential anything that’s been zoned already commercial. But I would make sure that as development projects come in that the Town Council take a long, serious look at what’s needed, not that it has to be rezoned because it’s the best option for the development community,” Seymour said.
The problem, he emphasized, isn’t interest from developers.
“Leesburg doesn’t have problem getting developers in. We do have a problem of space and we have a limited amount left,” he said.