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Northern Virginia

Mike Ellis +1 703 269 0520

While the Northern Virginia market will not reach the absorption totals it hit over the past three years, the market nevertheless continues to grow, with certain segments of the market displaying particularly strong demand levels, and development activity becoming increasingly more restrained. The majority of leasing activity in the fourth quarter was concentrated within Reston Town Center, the RB Corridor and Old Town Alexandria. The Inside the Beltway markets, as well as the Reston Town Center, continue to see strong leasing activity and rental rate growth, while activity and rent growth has slowed considerably in Route 28 South, Fairfax Center, Merrifield and other Outside the Beltway submarkets. Looking ahead, the Northern Virginia market will see nearly 850,000 s.f. of occupancy gains in the first quarter of 2008 from Corporate Executive Board and Volkswagen, both new tenants to the Northern Virginia market. We expect private sector demand to be strong Inside the Beltway and within Tysons and Reston Town Center, while activity could be slow in the first half of 2008 in other submarkets as the national economic landscape plays its course.

Leasing Activity  

  • The United States Army Corp of Engineers renewed its 218,638 s.f. lease at 1500 Wilson Boulevard in Rosslyn. The agency is one of those that is scheduled to go to Fort Belvoir with recent BRAC initiatives. 

  • The College Board agreed to lease 130,000 s.f. above the parking garage at Reston Town Center. The lease will not commence until 2009 or 2010, at which point the organization will occupy the space for a period of 12 years. Two 280,000 s.f. buildings are proposed for the site, which is located at Sunset Hills Road and Town Center Boulevard on the southeast corner of Reston Town Center.

  • Government contractor GTSI leased 104,000 s.f. at 2551 Dulles View Drive in Herndon. The firm will relocate from its current Chantilly headquarters at the end of 2008. The 357,000 s.f. development by the Fifield Companies is scheduled to deliver in the first quarter of 2008.

  • BAE Systems agreed to lease 102,376 s.f. at 45479 Holiday Drive, a flex building located at the Dulles North Corporate Park in Loudoun County. The building had been vacated by the National Geospatial Intelligence Agency in the second quarter of 2007. BAE will move into the space in January 2008.

  • Internet marketing research company comScore agreed to lease 67,000 s.f. at 11950 Democracy Drive, Building 2 of the new Reston Town Center development. The firm will lease the space for a period of 10 years beginning early next year. Pre-leasing activity at Reston Town Center remains strong, with over 340,000 s.f. already committed by Serco, Rolls Royce, NII Holdings and other tenants.  

  • Technology company Mpower pre-leased 42,800 s.f. at 11950 Democracy Drive in Reston Town Center’s Phase II development. The Class A building is slated for completion in the first quarter of next year, and has attracted some of the highest rents in the region. Mpower will occupy the space for a term of 10 years. 

  • Input Inc. signed a seven-year, 42,137 s.f. sublease at 11720 Plaza America Drive in Reston.

  • Accenture signed a 40,000 s.f. lease to occupy the entire building at 20101 Academic Way in Ashburn. The consulting firm will reside at the Class A property for a term of 10 years.

  • Another District tenant has decided to relocate to Arlington County.  GridPoint Inc., a renewable energy company, elected to move its 17,000 s.f. K Street headquarters to a new 40,000 s.f. plot at 2801 Clarendon Boulevard.  The company plans to move to Arlington in January, and expects to hire up to 250 additional employees at its new headquarters over the next three years.

  • Time Warner Cable signed a two-year sublease for 38,344 s.f. at 2291 Wood Oak Drive in Herndon.

  • Two leases were signed at 1925 Ballenger Avenue (176,101 s.f., Class A) in Alexandria, which is also home to Learning Tree International:

    • The United States Patent and Trade Office signed a 31,529 s.f. lease. 

    • Motley Fool signed a seven-year, 31,328 s.f. lease. 

  • Comcast agreed to a seven-year, 29,288 s.f. lease at 12801 Worldgate Drive in Herndon. The Class A, 80,582 s.f. building is now 75 percent leased.

  • MERS (Mortgage Electronic Registration System) is yet another tenant to sign a lease at Reston Town Center. MERS signed a 12-year, 25,779 s.f. lease at 1818 Library Street, which will deliver in the first quarter of 2008. Google is also rumored to be taking nearly 15,000 s.f. at the building.

  • DynCorp International took an additional 23,958 s.f. at 3190 Fairview Park Drive in the Merrifield submarket. The government contractor signed a seven and a half year deal at the building.

  • Alliant Techsystems (ATK) agreed to lease a full floor at Commonwealth Tower (360,000 s.f., Class A), located at 1300 Wilson Boulevard in Rosslyn.  ATK will lease approximately 23,500 s.f. on the fourth floor for a term of 10 years. The firm joins other recent tenants to sign leases at the building, including Sharp Electronics, Kishimoto Gordon Dalaya PC, and BAE Systems.

  • Government contractor System Planning Corporation signed a 10-year lease renewal and expansion at 3601 Wilson Boulevard in Virginia Square. The company expanded by nearly 22,000 s.f. at the Class A, 100 percent leased building.

  • AES Corporation signed a five-year sublease at 4075 Wilson Boulevard (177,046 s.f., Class A) for 20,550 s.f.  The new development delivered in the fourth quarter of 2007 100 percent leased.

  • A number of new leases have been signed in Monday Properties’ 10-building, 2.5 million s.f. Rosslyn portfolio:

    • The U.S. General Services Administration agreed to a five-year deal for 19,000 s.f. at 1000 Wilson Boulevard for the US Department of State.

    • Northrop Grumman also signed a five-year deal for roughly 17,600 s.f. at 1101 Wilson Boulevard, and a 10,627 s.f. renewal at 1501 Wilson Boulevard.

  • Group Logic signed a five-year lease for 17,887 s.f. at 1100 N. Glebe Road in Ballston. The lease is scheduled to commence at the beginning of 2008.

Building Sales

Building sales this quarter include:

  • Carr Properties purchased Arlington Plaza, 2000 N. 15th Street (193,657 s.f., Class A) from Vornado for approximately $71.5 million ($369/s.f.). The building was 12 percent leased at the time of the sale.

  • Verizon sold 2980 Fairview Park Drive for $105 million, or $315/s.f., to a joint venture led by ING Clarion.  The 14-story, Class A office tower in the Fairview office park is about 85 percent occupied, but Verizon is planning to vacate the building over a period of years. The new owners plan to invest about $2 million in building improvements to help attract new tenants.

  • Access Property Services purchased One Monument Place (12150 Monument Place) for approximately $60.75 million ($274/s.f.).  TIAA-CREF sold the Class A building that was 89 percent leased at the time of the sale.

  • A limited partnership, called Falls Church One LLC, acquired 803 W. Broad Street (51,760 s.f., Class B) in Falls Church, for $12.6 million, or $244/s.f., from another partnership.  The seven-story structure, built in 1965, is 95 percent leased, and has a long history of occupancy due to its location inside the Beltway and the lack of competitive space nearby. Tenants in the building include the City of Falls Church, Maxim Healthcare and the National Massage Therapy Institute.

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