Arlington, VA

An office building in Virginia Square has been evacuated after a reported chemical spill in the building.

Firefighters — including hazmat teams and medics — responded to the Ballston Gateway building at 3865 Wilson Blvd around 1:45 p.m., for a report of up to 20 people suffering medical symptoms after a coolant tower leaked chemicals into the building’s penthouse.

The building was evacuated amid a large fire department response, which is currently blocking at least one westbound lane of Wilson Blvd.

Some office workers on lower floors of the building have since been let back in. First responders on the scene radioed fire dispatch to report only a couple of people with minor symptoms, including eye irritation and nausea. There’s no word yet on which chemical might have leaked.

Thus far there has been no report of anyone being taken to the hospital.

The office building is home to a number of companies, including high-profile Arlington startup ThreatConnect.

Vernon Miles contributed to this report

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(Updated at 5:10 p.m.) Nestlé is expanding its Rosslyn headquarters.

Monday Properties, which owns the company’s headquarters at 1812 N. Moore in Rosslyn, announced on this week that the company will be expanding from its presence from 252,000 square feet to 300,000 square feet.

The expansion means Nestlé will occupy 18 floors of the 35-story building. The Washington Business Journal reports that the company “plans to use the extra room for conference facilities, meetings and event space for its team.”

The company relocated its U.S. headquarters to Arlington in 2017 — a move that netted the company several million dollars in grant funding, as well as nearby infrastructure improvements, from Arlington County.

“Our Rosslyn community continues to bring in some of the country’s finest companies, and we are pleased to play a significant part in this incredible momentum,” Austin Freeman, senior vice president of asset management for Monday Properties, said in a press release.

“We’re looking forward to continuing to build our relationship with Nestlé and its employees, as well as attract exceptional companies to our community that will benefit not only from a high-quality office environment, but from Rosslyn’s social and lifestyle transformation as a true destination hub for world-class businesses,” Freeman said.

Monday Properties noted that its other marquee corporate tenants in Rosslyn include Gerber (which is owned by Nestlé), Yext, Deloitte, Gartner, Accenture, Sands Capital, Raytheon and Grant Thornton.

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Morning Notes

HQ2’s Towering Height — “Amazon.com Inc.’s planned pair of office towers at Metropolitan Park will have the same number of floors as the residential building next door. But the HQ2 buildings will lord over The Bartlett by nearly 60 feet. The 22-story HQ2 towers are expected to hit 322.5 feet at their highest point, according to plans submitted to Arlington County. JBG Smith Properties’ The Bartlett, with its Amazon-owned Whole Foods Market on the ground floor, is 22 stories but only 264-feet-tall.” [Washington Business Journal]

Retail Sales Up in Arlington — “Year-over-year retail sales in Arlington showed a boost in the first quarter of 2019, according to new data. Total retail sales of $767.2 million countywide were up 1.6 percent from $755.3 million during the first three months of 2018, according to figures from the Virginia Department of Taxation.” [InsideNova]

Univ. of Phoenix’s New Arlington Campus — The for-profit University of Phoenix this week will be celebrating the grand opening of its new Northern Virginia-D.C. Metro campus at 4401 Fairfax Drive in Ballston. [Eventbrite]

Heat Doesn’t Stop Youth Baseball Tourney — “Even as some events cancelled due to the extreme heat warning on Saturday, many people are still got outside. That included hundreds of young players from across the area who turned out for the Arlington Babe Ruth – Doc Bonaccorso Summer Classic Baseball Tournament in Arlington.” [WJLA]

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A new medical office could be coming to Courthouse after officials approved a building owner’s request to broaden its search for tenants.

The County Board unanimously approved a site plan amendment during its meeting on Saturday, allowing the property owner of the Tellus luxury apartment building at 2009 14th St. N. in Courthouse to lease the 1,807 square foot space to office tenants as well as retail tenants.

The change was made with a particular medical office tenant in mind, a county staff report said. Lawyers representing the owner during the site plan amendment process were not immediately available to comment on who the medical office tenant is.

“The applicant states that it has been unsuccessful in retaining a retail tenant for the space, despite actively marketing the space since initial County Board approval of the site plan in 2009,” noted a staff report to the Board.

Other property owners in Arlington have struggled to fill off-the-beaten path retail spaces; a residential building in the Potomac Yard area received County Board approval earlier this year to fill a retail space with a “retail equivalent” business like a medical or dental office or child care center.

The 16-story, 254-apartment-unit building is located at the intersection of N. Troy Street and 14th Street N and replaced the 1960’s Arlington Executive Building in 2013 after several years of delays. The building was awarded for its architectural design in 2017.

Images 1-2 via Google Maps, Image 3 via Arlington County

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Driven in part by Amazon’s HQ2, demand for office space in Arlington is on the rise.

That’s according to a new quarterly Northern Virginia market report from commercial real estate services firm JLL, which says “tech demand across the Herndon-to-Crystal City corridor” is leading to more office space being leased than is being built.

Here are some key takeaways and quotes from that report:

1. Metro ridership may be dropping, but office tenants still want to be near a Metro station

The Silver Line corridor, from the RB Corridor through Tysons to the Toll Road, continues to capture a disproportionate share of leasing activity, driven by tenants favoring Metro access…

Metro access continues to drive pricing, with newer Class A product on-Metro commanding a 35% premium over newer Class A product off-Metro; Class B/C saw an overall jump in asking rents this quarter driven by increases in Crystal City.

2. Technology is driving office demand, including in Arlington, but much of the tech talent is in Fairfax and Loudoun counties

Northern Virginia dominates the region’s tech office market and will continue to grow its leadership position, with a tech corridor solidifying from Data Center-centric Loudoun County, through the Toll Road and Tysons, and into RB Corridor and Crystal City…

Driven by the origins of tech in this market, neighborhoods west of Tysons offer the most access to talent, primarily along the Toll Road and into Loudoun County.

3. The Rosslyn-Ballston corridor has higher office rents, but “National Landing” — Crystal City, Pentagon City and Potomac Yard — has a bigger office development pipeline

Tysons and the Toll Road offer the most scale for future ground-up development, holding 50% of the proposed office pipeline; meanwhile, inside the Beltway, greater Crystal City will form as a development hub for obvious reasons, while the RB Corridor’s future pipeline is minimal.

4. Expect rent increases to accelerate, as office buildings fill up following a decade of high vacancy

Submarkets continue to see minimal to no net effective rent growth versus a decade ago, driven by concessions remaining at peak levels, particularly as tenants are cross-shopping more than ever; however, we believe this trend is nearly over, particularly in Crystal City, RB Corridor and the Toll Road, due to market demand and tightening.

5. Defense contractors, a usual staple of Northern Virginia office demand, are not having as much of an impact on the market

The defense budget declined by $111 billion from 2011 to 2016, driving significant occupancy losses. However, the budget is surging again, up 16% since 2017…

Historically, when defense spending surges, absorption surges, and when it declines, occupancy declines; while this cycle is still early, it is already different. One reason – the major contractors all rightsized during the downturn and remain focused on efficiency in their space utilization.

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(Updated at 10:25 a.m.) WeWork will soon open its newest Arlington co-working space, the company says.

“Our new Rosslyn location at 1201 Wilson is slated to open this June,” company spokeswoman Nicole Sizemore told ARLnow on Monday. The company is also now listing the new Rosslyn location on its website with an option to call for information about pre-opening rates.

“Amid federal agencies and corporate giants, WeWork’s shared office in Arlington is a powerful locale to put down roots,” reads a description on the company’s website. “Several floors in this modern building are converted workspace, featuring comfortable lounges, bright and airy conference rooms, and sleek private offices.”

The final lease includes 83,294 square feet of space across four floors near the top of the 31-story CEB Tower, according to a December press release. The Washington Business Journal reported that the coworking space will have more than 1,400 desks and will “target large, ‘enterprise-level’ corporations — government contractors, trade associations and the tech sector.”

WeWork’s move comes as several major companies and other coworking and meeting spaces are opening up shop in Rosslyn, including Cerner, Nestle and its subsidiary Gerber, Spaces, Convene and Eastern Foundry this past year.

WeWork said Monday that it had filed to go public on the stock exchange, which will test its $47 billion private valuation.

Photo via WeWork

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Amazon executives say they’re looking forward to becoming “good neighbors” in Arlington, delivering a decidedly optimistic message to local leaders in one of the company’s first public events since tabbing the county for its new headquarters.

The tech giant’s head of worldwide economic development, Holly Sullivan, assured a crowd of government officials and business executives last night (Thursday) that the company is looking to build a “sustainable long-term partnership” in the region. That presented a stark contrast with Amazon’s recent decision to spurn New York City over concerns that local leaders were insufficiently supportive of a new headquarters there.

The event, organized by the Metropolitan Washington Council of Governments and held at George Mason University’s Virginia Square campus, also came just a few days after Arlington officials and activists expressed concern that Amazon executives haven’t done enough to engage the community as it gears up to move into the area.

Sullivan challenged that idea Thursday, arguing the company plans to be “active in the community” and has “just started our outreach” in Arlington. But only a limited group of Arlingtonians had the chance to hear that message — the event was “invitation-only,” though the COG did offer a livestream for anyone hoping to watch from home.

That stricture prompted some local critics of the project to refuse to attend the event, calling on the company to hold public hearings with community members instead. Many have been especially critical of Arlington’s proposed incentive package for Amazon — if the County Board approves it next month, Arlington would fork over $23 million over the next 15 years to a company owned by the world’s richest man.

On that front, Sullivan was able to offer significantly less reassurance. In response to a rare question from a reporter at the event, she pointedly would not say whether the company would pull the plug on its Arlington plans if the Board rejects the incentive package.

“The talent in the area was the primary driver of this entire process,” Sullivan said. “But incentives are important to us. They give us an opportunity to reinvest in our infrastructure and development opportunities for our workforce.”

Of course, it’s quite unlikely that the Board would take such a step. Even Board members who have expressed some unease with the incentive package have reasoned that it’s a small price to pay for the 25,000 (or more) jobs Amazon hopes to bring to the county.

The business community has also been increasingly vocal in support of the project. Not only has the Arlington Chamber of Commerce repeatedly thrown its weight behind the effort, but the Crystal City-based Consumer Technology Association recently joined in the fight as well. The CEO of the tech advocacy group attended the event to welcome Amazon to the neighborhood, and the CTA organized a crowd of dozens of pro-Amazon demonstrators to hold signs outside the gathering.

“We know this is a historic moment, not just for Arlington, but the whole region,” said Victor Hoskins, head of Arlington Economic Development.

To assuage anyone concerned that the company would bring a huge surge of out-of-state workers to jam area roads and pack local apartment buildings, Sullivan stressed that, in a perfect world, company executives “hope to hire all 25,000 workers locally.”

But she followed that up with a laugh, acknowledging that such a possibility is a bit unlikely. However, she is confident that D.C. region has enough highly skilled tech workers to provide a deep hiring pool for Amazon. And it helps, she believes, that the company already has corporate offices in both Herndon and D.C. to draw from too.

“A few people may choose to relocate from our Seattle headquarters, but this is not a relocation of corporate employees from Seattle,” Sullivan said.

Sullivan added that, wherever the company’s employees hail from, Amazon plans to design its offices in a way to “push employees out into the neighborhood to support local businesses.”

While the tech giant is still in the most preliminary phases of designing the office space it plans to lease from JBG Smith in Crystal City and build in Pentagon City, she said the company fully expects to draw from the design principles it used in Seattle.

“We’ll be trying to take the indoors outdoors and vice versa,” Sullivan said. “We want it to feel very much like a neighborhood. There will be no walls around it, no big sign that says ‘Amazon’ on it.”

That includes a focus on welcoming retailers and other restaurants onto the ground floor of the company’s offices. Though JBG has already worked fervently to bring more mixed-use developments to the area, it’s a process the area’s dominant property owner is hoping that Amazon will accelerate, to the whole neighborhood’s benefit.

“Crystal City gets pretty quiet at night, because everyone leaves right after work,” said Andrew VanHorn, JBG Smith’s executive vice president. “It may not be 24/7, but we want to make it more of an 18/7 environment.”

Until the Board signs off on the incentive package and Amazon starts submitting construction plans for its new offices, VanHorn pointed out that any design conversations are quite preliminary at this point.

However, he said JBG is working under the general assumption that the company will move into all of its leased office space in Crystal City by 2020. Then development work on a new building at Metropolitan Park in Pentagon City will run roughly from 2021 to 2025; construction at the former “Pen Place” development will run from 2023 to 2027.

Sullivan stressed that the buildings won’t look too out of step with the existing skyline, saying executives hope to “integrate into what’s already there” in Pentagon City.

Arlington’s notoriously extensive civic engagement process for new developments offers a long road ahead for the company, but Sullivan said she’s looking forward to embarking on it to answer a simple question: “How can we be a better neighbor?”

“We’re all doing this together,” Sullivan said. “We’re going to be neighbors.”

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A New York-based tech company just announced a major new expansion in Rosslyn, with plans to bring 500 jobs to the county over the next five years.

Yext rolled out plans yesterday (Thursday) to lease a 42,500-square-foot office space at 1101 Wilson Boulevard. The company will occupy the top three floors of the building, and will help slash the office vacancy rate in Rosslyn, a persistent problem over the last few years.

Yext produces data management software for companies looking to manage their online presence, helping brands as large as T-Mobile and Ben and Jerry’s track and upload location information to directories across the web.

Company founder and CEO Howard Lerman, a Virginia native himself, says the move will help fuel his firm’s ongoing expansion efforts in the D.C. metro area, which he hailed in a statement as a budding tech hub now that Amazon is coming to the county.

“Washington, D.C. and Northern Virginia are emerging as one of the country’s major hubs for tech talent, which was a key factor in our decision to expand in the area,” Lerman wrote. “Our new office will be a key foothold as we continue our global growth.”

Yext plans to offer an open floor plan, fully stocked kitchens and free meals to all employees at the space. The company also hopes to put up a sign displaying its name on the building, once the home of the county’s Artisphere, to adorn Rosslyn’s skyline.

Rosslyn has seen quite a few economic development victories in recent months, highlighted by Nestle bringing its American headquarters to the neighborhood last year. The tech consulting firm Accenture recently added an office in the area as well, and the We Companies recently opened a new coworking space in the neighborhood.

Rendering courtesy of Yext

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A Ballston office building that’s sat largely empty ever since a federal agency moved out a few years back could soon lure a bevy of new tenants to the space.

The Arlington Square building, located at 4401 Fairfax Drive, looks set to experience a bit of a revitalization. The County Board is set to consider a series of zoning changes for the property tomorrow (Saturday) to lure in two tenants, and other retailers look to be on the way as well.

Built in 1988, the eight-story building was long the headquarters of the U.S. Fish and Wildlife Service. But the agency took off for Falls Church in 2014, as part of a series of federal tenants leaving the area, and the building has been “mostly vacant” since then, county staff wrote in a report to the Board.

The Brookfield Property Group bought Arlington Square for $33.5 million back in 2017, paying substantially less than its previous owner did in acquiring it for $53.9 million in 2010, according to county property records. The developer now “intends to attract a variety of uses and tenants to occupy the building,” staff wrote.

Specifically, the building’s owner is looking for a zoning change in order to lease out about 2,800 square feet of space on its ground floor to a “private college.” The Board report doesn’t name the institution looking to move into the space, but it does say that it will offer classes on nights and weekends, with “degrees in a Master of Business Administration, Bachelors of Science in Business, Bachelors of Science in Information Technology and general studies and electives programs.”

A behavioral therapy provider, known as “Mind Body Health,” is also hoping to move into about 2,400 square feet of space on the building’s second floor. The business is currently based in Courthouse, in a building at 2200 Wilson Blvd, and is looking for a new permit to operate in the space.

Brookfield is also planning on adding two retailers to the ground floor, to further “activate the streetscape,” staff wrote. One, the soup-and-salad restaurant Zoup!, has already posted signs at the location. The other looks to be Poke It Up, according to a report from Eater D.C., a chain with a location in the Pentagon City mall.

County staff are recommending that the Board sign off on the proposal, hailing its potential to bring more business to “a building that has sat largely vacant for five years.”

The Board has certainly put an emphasis on reversing the county’s rising office vacancy rate in recent years — though Amazon’s arrival in Crystal City and Pentagon City will make a huge impact on that effort, officials have warned that neighborhoods like Ballston and Rosslyn still have some catching up to do.

Photo via Arlington County

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(Updated at 10:45 a.m.) PBS has signed a new deal to keep its headquarters in Arlington, though it will be relocating to a different building in Crystal City.

The media company announced today (Tuesday) that it will be moving from its current space at 2100 Crystal Drive to a 120,000-square-foot office at 1225 S. Clark Street. PBS agreed to a 15-year lease in the building, and plans to make the move sometime in “mid-2020,” per a press release.

The nonprofit has been based out of the 2100 Crystal Drive property since 2006. Its new headquarters is adjacent to both the Earth Treks climbing gym and the headquarters of the U.S. Marshals Service.

“We are thrilled that PBS will remain in Crystal City, especially during such a transformative and exciting time for this community,” PBS President and CEO Paula Kerger said in a statement, no doubt referring to Amazon’s impending arrival just a few blocks away. “Keeping our headquarters in Arlington is great for PBS and our employees, and we’re proud to call ‘National Landing’ our home.”

The move takes PBS from one property controlled by developer JBG Smith to another. The company is the dominant property owner throughout Crystal City, Pentagon City and the nearby Potomac Yard, controlling millions of square feet of space even after helping bring Amazon to some of its properties.

“This continued long-term commitment by PBS to stay within the submarket further validates our excellent location, as well as our many planned improvements for the neighborhood,” David Ritchey, JBG Smith executive vice president said in a statement. “The relocation and extension of the PBS lease is also indicative of our plan to retain and attract diverse industries to National Landing, including associations and non-profits.”

The March of Dimes nonprofit also recently announced plans to relocate to the area, moving to a building at 1550 Crystal Drive.

Attracting businesses to the area remains a major concern for the county, even with Amazon set to take up as much as 8 million square feet of office space in the area someday. The county is hoping many property owners, like JBG, will use the company’s arrival as the impetus to refresh some of their older buildings in the area, and further reverse Arlington’s spiking office vacancy rate.

PBS member station WETA is also one of the county’s more well-known office tenants in South Arlington, though one of the TV station’s facilities could also be on the move. County officials hope to someday acquire the station’s studio property in Nauck, in which programs like the PBS NewsHour is produced, then use the land for the redevelopment of Jennie Dean Park.

Photo 1 via Google Maps

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The owner of a Rosslyn office building is changing up how it leases out some of its space, in a bid to be more flexible and responsive to the needs of government contractors.

Washington Real Estate Investment Trust announced today (Wednesday) that it’s rebranding some of its space at the Arlington Tower (1300 17th Street N.) as “Space+.” The firm acquired the property, located just across the street from Dark Star Park, back in January for about $250 million.

The program is designed to offer prospective tenants “high quality office space that can be customized and configured to be as large or small as a business needs at any given time,” according to a press release. The developer is marketing a variety of spaces in the building that resemble traditional coworking offices, but can also be customized to suit each business’s desires.

In all, about 22,000 square feet of the building’s 398,000 square feet of space will be reserved for the “Space+” offerings, according to spokeswoman Liz Wainger. The space will be available for lease right away, she added.

“Space+ reflects our willingness to be creative on lease term and structures, all to accommodate tenants who are grappling with rapid change in their industries,” Wainger wrote in an email. “Our bread and butter are smaller growing enterprises and contractors with immediate needs.”

Primarily, the company is hoping to ride a projected surge in new federal business in the area. Though many property owners in Rosslyn, in particular, have struggled with high vacancy rates in recent years, the developer doesn’t expect that trend to last much longer — particularly with Amazon coming to town soon.

“According to an analysis of government contracts awarded in the six zip codes in and around Arlington Tower, the data shows that nearly 370 contractors have been recently awarded or imminently expect to be awarded contracts that will notch a greater than 10 percent funding increase in 2018, with continued hikes in year-over-year funding in 2019,” the company wrote in the release. “With the ability to meet company demands — regardless of size — Space+ availability at Arlington Tower answer[s] the anticipated demand with straightforward pricing and fast move-ins to single offices, collaborative work spaces and furnished suites.”

Several other firms offering coworking offices and other flexible spaces have also opened in Rosslyn in recent months, including WeWork, Spaces, Convene and Eastern Foundry.

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