(Updated at 6:15 p.m.) One of the world’s biggest companies is looking for a new corporate headquarters, and Arlington wants to be in the running.
Marriott International occupies 900,000 square feet of office space in Bethesda, but CEO Arne Sorenson told the Washington Post last month that the hotel chain with more than $12 billion in annual revenue “will be moving.” Sorenson said he still wants the company to stay in the D.C. region, and made more comments sure to make Arlington real estate owners’ ears perk up.
“I think it’s essential we be accessible to Metro and that limits the options,” Sorenson told the Post’s Jonathan O’Connell. “I think as with many other things our younger folks are more inclined to be Metro-accessible and more urban.”
Sorenson also said Marriott has engaged with “local leaders,” but the company won’t move for several years; its lease in Bethesda expires in 2022.
A giant tenant like Marriott doesn’t come to market very often, and it would be a huge get for Arlington Economic Development, which is still reeling from the impending loss of some large tenants like the National Science Foundation. If the hotel chain moves its headquarters to Arlington, it could occupy almost triple the combined space of recently touted deals for Accenture (90,000 square feet in Ballston), CNA (175,000 square feet in Clarendon) and Graham Holdings (35,000 square feet in Rosslyn).
“Because Marriott is, from what I’m reading, a 700,000-800,000-square-foot group, they would sign a long-term deal with probably some new construction,” Arlington Chamber of Commerce Chairman Kevin Shooshan told ARLnow.com today. Shooshan is also the vice president of Shooshan Company, a Ballston-based real estate firm. “Because of the size of that deal, it’s very attractive to everyone involved in the real estate market. Marriott has good credit. It would be twice the size of [Rosslyn-based] Corporate Executive Board. All parties on the commercial side are interested.”
Shooshan said the number of jobs Marriott would bring — more than 2,000 work in Bethesda — could be a boon for the county’s economy, including the added employee spending on retail, restaurants and housing. Another benefit would be the real estate revenue. Arlington’s commercial real estate market has stagnated in recent years, and landing Marriott would be a financial windfall.
“A headquarters tenant like that brings in tens of millions of dollars in real estate taxes over a 10-15 year lease term,” Shooshan said, “and hopefully that term turns into a true long term headquarters location, resulting in hundreds of millions, not to mention more sales and entertainment spending, more residents, more traffic for hotels, restaurants, etc.”
Where could Marriott go in Arlington? Real estate publication Bisnow created a list of 16 potential places it could relocate in the D.C. area that fit its criteria, and four are in Arlington:
- The site of the Key Bridge Marriott in Rosslyn, the longest continually operating Marriott in the company’s portfolio
- 1812 N. Moore Street, the Monday Properties skyscraper in Rosslyn that opened in October 2013 but still sits vacant. That building holds 560,000 square feet, so it could be paired with planned, 513,000-square-foot redevelopment of 1400 Key Blvd just steps away
- PenPlace in Pentagon City, a sprawling, 2.1 million-square-foot planned office park owned by Vornado and already approved by the Arlington County Board
- Crystal City, where Vornado owns a number of office towers that are already vacant and ripe for redevelopment
Arlington Economic Development spokeswoman Cara O’Donnell couldn’t confirm if AED or anyone else from the county have been in talks with Marriott. She did, however, make it known that Arlington will be lobbying hard for the hotel powerhouse.
“Marriott’s corporate headquarters would be an ideal fit for Arlington,” O’Donnell said in an email. “We are known for our urban villages and metro accessibility, which have been cited as important factors both in Marriott’s search criteria and in hiring and retaining the best workforce.
“Arlington has several existing and build-to suit sites that accommodate Marriott’s needs for a corporate campus,” she added. “Additionally, Arlington is also already home to nine Marriott properties and 3,300 Marriott rooms. These factors all demonstrate Arlington would be a model location for a headquarters of a premier hotel operator.”
Marriott is expected to have its pick of just about every local jurisdiction, in Maryland, the District and Virginia. We’re told also Tysons Corner figures to be a premiere player with its new Metro stops and massive redevelopment plans.
Marriott’s decision is several years away, and the competition will only get fiercer. Although AED would not comment on what type of package it would offer Marriott, it’s worth looking at what CEB received in exchange for simply staying in the county and the state: $4.5 million from the governor’s office, $5 million from the Virginia Economic Development Fund and a pledge from Arlington County to match any funding for infrastructure improvements.
CEB’s 15 stories in the under-construction tower that will bear its namesake will contain 350,000 square feet of floor area. Marriott should occupy at least twice that. Wherever it goes, it likely will see a significant financial commitment from its new home.