(Alexandria, VA) – Reflective of the City’s improving business atmosphere, Alexandria’s office market experienced positive absorption for the first time in three quarters, due to significant second quarter move-ins such as EarthTech’s 30,000 square feet at 675 Washington Street, and smaller spaces for Wisnewski Blair & Associates at Canal Center and Research America at 1101 King Street.

For the first time in nine quarters, Alexandria saw a decrease in its office vacancy rate. The rate had been steadily creeping up from 5.1% in the first quarter of 2000 to a high of 12.1% in the first quarter of 2002. Second quarter 2002 saw a drop to 11%, although Northern Virginia’s office vacancy rate did not fare as well, rising nearly half a percent to 15.9%, as did the Washington, D.C. metro area, from 11.7% to 12.2%.

The most compelling signs of an improving economy are optimistic unemployment figures. Alexandria’s unemployment rate continued to decline to 3.6% from a high of 3.9% in the fourth quarter, as the number of unemployment claims dropped 6% from first quarter, and 32% from its height in the fourth quarter of last year. The state unemployment rate rose from 4.1% to 4.3% in the second quarter.

The U.S. Patent & Trademark Office started construction on two of five office buildings, and one of two parking garages this quarter, contributing to more than 1.3 million square feet of new commercial development in the City: PTO’s Building E is 409,446 square feet, Building C is 385,786 square feet, and the East Parking Garage will be 540,000. Finally, Ruby Tuesday’s is in the process of building out 5,574 square feet of restaurant space in the Hoffman AMC Theater building.

Though the City experienced an early and warm spring, Alexandria retail sales were down slightly from $535 million last year to $515 million this year.

Page 2 Alexandria Second Quarter Economic Indicators September 5, 2002

The relatively low prime interest rate remained 4.75% through the first half of the year, ensuring the spring’s typically high volume of investment in residential housing. In fact, housing continues to be one of the strongest sectors of the local economy, with the average price of a home in Northern Virginia at a record high of nearly $337,000, up 19% from last year’s $284,335.

This quarterly analysis of the economic strength of the City of Alexandria is part of the Local Economic Indicators Report, released by the Alexandria Economic Development Partnership, Inc. (AEDP). This report is prepared as a service to the business community to provide information on the health of the City’s economy for new, relocating and expanding businesses. Additional copies of the complete report may be obtained from the AEDP offices at (703) 739-3820 or at http://www.alexecon.org/leirs.html.

For Immediate Release- 10/2/02

Contact: Eric Dobson
703-739-3820 xt. 14

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