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DC Metro’s Largest Leases in 2014

08/27/2014
nathan edwards, nathan edwards cassidy turley, dc real estate, dc cre news

So, what do the largest leases tell us about the state of the leasing market in the Washington, DC Metro? A major theme emerges – the government may be down from a jobs standpoint, but they are certainly still a huge force in the office market. 

Leases by the federal government have made up 6 of the 10 largest deals in the region so far this year. In the District of Columbia, two of the largest federal government deals executed so far this year - National Park Service (NPS) and Veterans Affairs (VA) have been short-term extensions – an all too common occurrence over the past two to three years. The District is not alone – Northern Virginia’s largest deal for the Department of Defense was a three year extension of over 600,000 square feet (sf). 

There have been some exceptions to the short term extension trend, however. One example is the National Labor Relations Board (NLRB) in a move out of the District’s urban core into the emerging Capitol Riverfront submarket. In the suburbs, the Bureau of Safety and Environmental Enforcement, the Centers for Disease Control and Prevention and the National Institute of Child Health and Human Development (NICHD) all inked long-term deals. While being the largest deals in the market, a major drawback remains.  Nearly all of the federal leases represent significant downsizing as the GSA continues to struggle to reduce its footprint among other new standards being enforced with new leases. Upon examination of large federal leases currently in the market, this reduction is not expected to end in the near-term. The extent to which the continual addition of relet space to the market negates net demand from job growth remains a big question mark.      

The DC Metro real estate community holds out hope that more federal leases transacted will be like those NLRB, BSSE, NICHD and CDC - namely long term deals that lend certainty and confidence to investors in the market.  

Market

Submarket

Address

Tenant

 SF

Deal Type

NoVA

Eisenhower Avenue

200 Stovall St.

GSA – Department of Defense

606,575

Renewal

DC

East End

555 13th St., NW

Hogan Lovells

384,700

Renewal

DC

East End

1301 K St., NW

Washington Post

248,300

Relet

DC

East End

1201 Eye St., NW

GSA- National Park Service

219,800

Renewal

DC

CBD

1800 G St., NW

GSA- Department of Veterans Affairs

163,900

Renewal

DC

Capitol Riverfront/SE

1015 Half St., SE

GSA- National Labor Relations Board

         143,100

New

NoVA

Tysons Corner

1500 Westbranch Dr.

U.S. Government

124,000

Renewal

MD

North Rockville

2277 Research Blvd.

Client Network Services, Inc.

118,000

Relet

MD

Northern PG County

3311 Toledo Rd.

GSA – Centers for Disease Control and Prevention

104,000

Renewal

NoVA

Ballston

4040 N. Fairfax Dr.

Marymount University

87,000

New

MD

N. Bethesda

6710 Rockledge Dr.

GSA NIH Child Health and Human Development

85,000

Relet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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By: Nathan Edwards

Director of Research, Cassidy Turley - Washington, D.C.

nathan edwards, nathan edwards cassidy turley, cassidy turley, cassidy turley research, cassidy turley dc, cassidy turley washington dc

Email Nathan: Nathan.Edwards@cassidyturley.com

Follow Cassidy Turley on Twitter: @CassidyTurleyRE

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