Healthcare technology company Cerner is coming to Rosslyn, renting out space in the massive office building that recently became home to Nestle’s U.S. corporate headquarters.
The Missouri-based company plans to lease out just over 38,075 square feet at 1812 N. Moore Street, according to a release today (Tuesday) from building owner Monday Properties.
Cerner will occupy the entire 14th floor of the building, and part of its 12th floor, in order to house staffers working on the company’s contracts with the Department of Veterans Affairs and the Department of Defense. The company employs about 27,500 people across 35 countries, according to its website.
The move marks another success for Monday Properties in luring tenants to the 537,000-square-foot building, after a rocky few years following its opening in 2013. The developer built the tower “on spec,” without any tenants secured ahead of time, and it sat largely empty for months.
But Nestle’s decision to relocate its American corporate headquarters to the space, followed soon after by Nestle subsidiary Gerber, meant that roughly half of its space was spoken for in the space of of just over a year.
Cerner’s move comes just a day after plans came to light that WeWork plans to open a new coworking space at the CEB Tower (1201 Wilson Blvd), representing yet more good news for Arlington leaders looking to reverse Rosslyn’s rising office vacancy rate.
“We see this deal as further confirmation that Rosslyn has become the place to be for companies at the forefront of innovation, from technology and consumer goods to health care,” Mary-Claire Burick, president of the Rosslyn Business Improvement District, wrote in a statement. “Our proximity to the federal government combined with a highly educated workforce and vibrant urban core provides unique opportunities for corporations like Cerner that are experiencing exciting global growth.”
Photo via Monday Properties
Crystal City has convinced more businesses to move to the area from elsewhere in the D.C. region than any other neighborhood since 2014, according to new research.
New data compiled by the commercial real estate consulting firm Jones Lang LaSalle shows that Crystal City has convinced a total of 32 office tenants to move to the area over the last four years, including 20 previously based in D.C. and the remaining 12 from other parts of Northern Virginia.
The Rosslyn-Ballston corridor wasn’t far behind, luring a total of 28 businesses to relocate, with 21 from D.C. and seven from Northern Virginia, the firm found. In all, the two Arlington neighborhoods far outpaced other contenders like Tysons Corner or Old Town Alexandria, winning a combined 60 of the 113 commercial office tenants to move around the D.C. region since 2014. Even still, the corridor and Crystal City alike have grappled with persistently high office vacancy rates over the last few years, squeezing the county’s coffers.
Rob Sapunor, JLL’s senior research analyst for Northern Virginia, found that Crystal City won a total of 580,174 square feet of new tenants over the last few years, with 367,597 square feet worth of businesses coming from D.C. alone. Of those companies to make the jump, he found that five were nonprofits and 11 were professional associations.
He noted that three buildings earned the bulk of those new tenants — 1400 Crystal Drive, the Presidential Tower at 2511 Jefferson Davis Highway, and 251 18th Street S. The analyst attributed Crystal City’s relatively low rent prices to helping lure businesses out of D.C., predicting that it will “continue the trend of cost-conscious tenants exploring this market.”
Sapunor added that the Rosslyn-Ballston corridor added 482,545 square feet of new businesses, including 314,443 square feet from D.C..
“Among tenant types, no one particular industry dominates, a sign of the corridor’s shift away from a heavy reliance on government agencies and contractors,” he wrote. “New tenants include tech, media, lobbying, education, consulting and nonprofit.”
He predicts that the area will remain an “attractive market” for businesses looking for “monument views,” but he also expects competition from elsewhere in Northern Virginia to ramp up in the coming years. In particular, he foresees Tysons and even Loudoun County becoming more formidable competitors for businesses moving out of D.C. as Metro wraps up some of its long-awaited expansion work.
“As the market increasingly becomes increasingly transit-accessible with Phase 2 of the Silver Line opening in 2020, migrations within Northern Virginia will favor on-Metro relocations,” Sapunor wrote.
File photo. Chart via JLL
Plan for Decaying Salt Storage Facility Tweaked — “Arlington government officials have come up with a slightly altered placement for a new North Arlington salt-storage container, one that may assuage the concerns of some – if not necessarily all – critics of the move. A new schematic drawing moves the footprint of the new storage facility closer to the existing, dilapidated salt dome on the 7.5-acre parcel along Old Dominion Drive between 25th Road North and 26th Street North.” [InsideNova]
New Office Option in Rosslyn — A local commercial real estate firm is opening a new office concept in Rosslyn which will combine the “office on demand” flexibility of co-working space with larger floor plans and suite configurations more common in traditionally leased office space. [Washington Business Journal]
Operating Costs a Question for Aquatics Center — A groundbreaking has been held for the new Long Bridge Park aquatics center, now the county has commissioned a survey of residents to help determine pricing and offerings, which will in turn help the county calculate the center’s yearly operating costs. The latest estimate pegs the subsidy from taxpayers at about $1 million per year. [InsideNova]
Rosslyn-Based Nestle Continuing to Hire — “Global food and beverage giant Nestle plans to boost hiring in the U.S., where it has just opened a headquarters in Virginia, the company’s U.S. chief said Wednesday. Steve Presley, Nestle USA CEO, said on FOX Business’ ‘Mornings with Maria’ that job creation will include positions at the new headquarters in Arlington County as well as production facilities in the commonwealth. [Fox Business]
It’s August — The calendar has turned a page, to August, but the current rainy weather pattern is expected to continue. [Capital Weather Gang]
Photo courtesy Jeremy Galliani
RCA Building Redevelopment Nixed — Plans to tear down the aging RCA office building at 1901 N. Moore Street in Rosslyn and replace it with a 24-story residential tower have been placed on hold “indefinitely.” Instead, owner Weissberg Investment Corp. is now seeking to lease up vacant spaces in the building. [Washington Business Journal]
New County Board Clerk Announced — “The Arlington County Board today named Kendra M. Jacobs the Clerk to the County Board. She will join the County Board Office in her new role on Monday, July 9. Jacobs comes to Arlington County Government from the City of Alexandria, where she has managed the Department of Planning and Zoning’s Boards and Commission Unit since 2003.” [Arlington County]
LWV to Host Gerrymandering Forum — The Arlington League of Women Voters is hosting a forum entitled “Gerrymandering in America and the Future of Popular Sovereignty” on Thursday, July 12 at 7:30 p.m. at the Arlington Mill Community Center. [League of Women Voters, InsideNova]
More ART Mechanical Issues — The bus serving the ART 43 route today “died on [Route] 50 right before the Crystal City exit,” a rider reports. Per the transit agency, which has been plagued by problems recently: “Due to mechanical issues ART 43 to Court House Metro from Crystal City Metro at 8:51 AM will not operate. We apologize for your inconvenience.” [Twitter, Twitter]
Flickr pool photo by Eric
Construction on the renovated Ballston Quarter mall is coming along.
Signs up at the site still point to a fall 2018 opening for the redeveloped and rebuilt space, formerly known as the Ballston Common Mall.
The 360,000 square foot retail space will also include a 25,000 square foot food hall, which reportedly will have 18 restaurants, including Timber Pizza Co. and Buredo. Trendy D.C. spots Himitsu and Gravitas are also said to be considering opening up eateries at the mall.
At least 400 residential units are being constructed as well, though leasing will begin next year.
Ballston Quarter is just one of a number of major construction projects currently underway in the neighborhood. Crews were seen working on Friday directly across the street from another construction site, Liberty Center, at 4040 Wilson Boulevard.
The mixed-use residential, retail, and office space is scheduled to open for mid-2020 and will be the final piece of a five-building development. VIDA Fitness, a “high end fitness center and spa,” is set to open its first non-D.C. location in the building.
Updated at 3:21 p.m. with additional details.
Updated at 9:41 a.m. with additional photos: A high rise AC unit caught fire this morning (Thursday) in Ballston, shutting down the 800 block of N. Quincy Street.
The fire was reported around 8:30 a.m., prompting a large response of Arlington County firefighters as well as units from Fairfax, Alexandria, and Fort Myer. The fire was extinguished quickly after units arrived on scene, according to Capt. Ben O’Bryant, Arlington County Fire Department spokesman.
O’Bryant confirmed that the Fire Marshal’s Office is investigating the cause. The fire comes a day after record-breaking February warmth.
The building, at 801 N. Quincy Street, is home to the soon-to-open restaurant Urban Tandoor, along with numerous office tenants.
— Jacob Torrey (@JacobTorrey) February 22, 2018
One smiley face made of Post-it notes turned into a conversation between the occupants of two Rosslyn office buildings in this week.
Allison Krumsiek, a government contractor, said her office has considered making contact with the office across the street — the new CEB office tower at Central Place — ever since people began moving into the space a few weeks ago.
Before the new office moved in, Krumsiek said she and her coworkers had a straight-on view of construction workers putting the building together. Then on Monday, people in the new office placed a Post-it smiley face on their window, and the intra-office communication was on.
“So we thought time was perfect to respond! We put up the ‘Hi!’ And when another floor of their building responded with ‘Hey’, we added ‘Welcome!'” wrote Krumsiek in an email.
After that Krumsiek said she heard another floor in her building put up “5 o’clock yet” to which the opposite building responded “sum where.”
“As you can tell from the picture, they had to use at least 3 colors of Post-it. Those things last forever when on your desk but go in a heartbeat when sending messages on windows,” Krumsiek added.
Down here in #Rosslyn it started small enough, with just a smile, one building to another. By day 2 we’re asking is it 5 o’clock yet? @ARLnowDOTcom #b2b #communications #officelife pic.twitter.com/z4YQvCVIZM
— Somebody Writing (@aliekrum) February 13, 2018
Photos courtesy of Allison Krumsiek
Two Arlington-based companies are set to receive incentive-based economic development grants as they expand in the county.
Rosslyn-based technology company Higher Logic and Clarendon-based media firm Axios are both in line to receive $60,000 each under the county’s incentive-based Gazelle Grant program. The program, administered through Arlington Economic Development, encourages businesses to move into or stay in Arlington.
Under the terms of the grants, both companies must commit to leasing a certain amount of office space and creating more full-time jobs. If they do not fulfill the terms as of December 31, 2020, they will be required to pay back at least some of the grant.
For its grant, Higher Logic must lease at least 31,000 square feet of office space, maintain its existing 107 full-time jobs and create 133 new full-time positions.
Founded in 2007, Higher Logic had been exploring a new location for its headquarters, having expanded to take up 15,000 square feet by 2015. It will move to 1919 N. Lynn Street in Rosslyn and occupy an entire floor of the building on a 10-year lease.
Axios, meanwhile, must lease at lease 15,000 square feet of office space, maintain its existing 60 full-time jobs and create 60 new full-time positions.
Having initially located at the MakeOffices coworking space at the office building at 3100 Clarendon Blvd, Axios is set to expand into the 13th floor at the same address and sign a 10-year lease.
The Arlington County Board will vote on whether to award the grants at its meeting Saturday (January 27). Staff recommended approval of both.
Employees at Nestle’s USA headquarters are expected to finish moving into its new Rosslyn office by the end of January.
In an interview with ARLnow earlier this month, Rosslyn Business Improvement District President Mary-Claire Burick said the moving process is expected to be complete soon.
Burick noted that Nestle has worked hard to help any employees relocating from its current home of Glendale, Calif., and helped them settle into Arlington County.
“They’ve done a magnificent job with acclimating the employees, doing a resource fair and just making sure that those employees are well acclimated, not only to the neighborhood of Rosslyn but of Arlington in general,” Burick said.
Ahead of that move, Nestle has worked closely with building owner Monday Properties to prepare its new headquarters. It will include spaces for employees to collaborate, and Burick added the building will have a new open stairway to promote “walkability between floors.”
“I think Nestle was really creative about their office space and how it would support their culture,” she said.
And a major catering company will provide food and drinks to the new Nestle headquarters in Rosslyn, according to permit and ABC license applications.
According to applications, Compass Group, Inc. will provide the catering for Nestle’s USA headquarters at 1812 N. Moore Street, on the 33rd floor. Compass serves “award-winning restaurants, corporate cafes, hospitals, schools, arenas, museums, and more,” per its website.
A county permit application notes that the new cafeteria will require an inspection by the Department of Health before it can be used.
As of the time of writing, a spokeswoman for Compass Group had not provided any further details.
Disclosure: Monday Properties is an ARLnow advertiser.
The office vacancy rate in the Rosslyn-Ballston corridor continued to recover in 2017, with new tenants moving in this year expected to maintain that recovery.
Commercial real estate firm JLL found that the recovery continued for the third straight year, after tenants moved out in droves from 2009 to 2014 following BRAC and sequestration at the federal level. That contributed to Arlington County’s total office vacancy rate being at 22.7 percent in 2017.
And this year, JLL said the arrival of Nestle in Rosslyn as well as the redevelopment of the Ballston Exchange — formerly known as Stafford Place and the previous headquarters of the National Science Foundation — and Ballston Quarter Mall will help drive down that office vacancy rate.
Rosslyn is set to add occupants in 500,000 square feet of vacant office space this year, including the likes of the Grocery Manufacturers Association, which is relocating from D.C. Although with a 29 percent office vacancy rate at the extremes of the corridor, it is not all good news.
A previous JLL report found that office rent is highest on Wilson Blvd in Rosslyn and increasing, due to new high-end “trophy class” offices coming online, as well as the unobstructed views of Washington, D.C. and the Potomac River.
And locating close to Metro stations is still pushing rent up on office space across Northern Virginia by up to 34 percent, according to JLL. It also found that all of the new office space being constructed is close to Metro.
But despite the positives, the Northern Virginia region as a whole is still struggling, with a 20-year historical high for office vacancies and not much improvement forecast in the coming years. Fairfax County’s office vacancy rate of 21.1 percent is second behind Arlington, followed by Alexandria (19 percent), Loudoun County (16.6 percent) and Prince William County (15.6 percent).
The lowest vacancy rate close to D.C. is in Frederick County, Maryland, which has a 9.1 percent vacancy rate.
“The forecast broadly is not likely to shift greatly from today as slower demand caused by limited near-term lease expirations, limited economic diversification outside of the core government and contractor drivers and a dysfunctional Congress will keep supply-demand fundamentals relatively flat,” John Sikaitis, managing director for research at JLL, wrote in a presentation on the findings.
Northern Virginia office space is most expensive to rent on Wilson Blvd in Rosslyn, according to a study.
Commercial real estate firm JLL found that rents on the street in Rosslyn average between $56 and $65 per square foot, and that those rents are increasing.
The study found that average rent increase is due to new high-end “trophy class” offices coming online, as well as the unobstructed views of Washington, D.C. and the Potomac River. Those “trophy” offices include top amenities, good views of their surroundings and are connected to transit options like Metro and bus routes.
“The new trophy buildings not only deliver high-end modern office space, but will help transform Rosslyn from a sleepy 9-5 business district into a vibrant live-work-play neighborhood,” Michael Hartnett, senior research manager in JLL’s Northern Virginia office, said in a statement.
Across the region, average rents on office space remain high even as jurisdictions battle with a high vacancy rate. Arlington County’s office vacancy rate is just over 17 percent, even with the likes of Nestle moving to Rosslyn.
“Despite the U.S. office market posting 81 million square feet of net absorption the past 24 months and posting rent growth of 8.2 percent, the Metro D.C. market has posted nearly 700,000 square feet of occupancy losses and a rent decline of 6.9 percent,” John Sikaitis, managing director of research at JLL, said in a statement. “In this challenging market, there are an equal mix of winners and losers and on the demand side, these nuanced high-priced corridors at the intersection of Main and Main have attracted the most demand and been some of the more resilient segments of the market.”
Photo via Monday Properties
Two years after being put on hold, construction will resume next year on the Liberty Center’s final building in Ballston after it signed an office tenant.
AvalonBay Communities, a publicly-traded apartment developer and real estate investment trust, will relocate its headquarters to 4040 Wilson Blvd, which is set to be a 22-story mixed-use building with offices, retail and residential. It will be Ballston’s tallest building.
AvalonBay, which is already in the neighborhood at 671 N. Glebe Road, signed a lease for 73,000 square feet of office space on three floors — the eighth, ninth and 10th as well as a portion of the seventh — at the site owned by developer The Shooshan Company and Brandywine Realty Trust.
It joins VIDA Fitness, which will open its first non-D.C. location at the building. With this new signing, the building’s office space is 50 percent pre-leased.
Construction is now expected to start in the first quarter of next year. AvalonBay is projected to move in around mid-2020.
“When we decided to amend 4040 Wilson to a mixed-use building consisting of roughly a 50/50 split of office and residential and increased retail last year, we did so in an effort to adjust to the recent market trends which consisted of more prospective tenants in the [around] 75,000 [square feet] range, and more retail demand along Wilson Blvd.,” Kevin Shooshan, leasing director at The Shooshan Company, said in a statement. “Just about a year after county approval, we’re honored to have executed a pre-lease with a company as prestigious as AvalonBay, securing their headquarters location here in Arlington County for years to come.”
Previously, Shooshan told ARLnow that construction had been paused during a period of high office vacancies in Arlington and the rest of the D.C. region.
Image No. 1 via The Shooshan Company
A new co-working space will move into Ballston next year, across the street from the under-construction Ballston Quarter mall.
TechSpace will move into the eighth floor of Two Liberty Center (4075 Wilson Blvd); its 10th location in the United States. It expects to open in June 2018. TechSpace already has similar co-working spaces in New York, California and Texas.
The new 20,000-square-foot Arlington office will include 56 private, interconnecting office suites with 198 workstations as well as open co-working desks and spaces for working. That will include fully-equipped conference rooms and lounges. Members who work in the space will also have access to building amenities like a rooftop terrace, bike storage, locker rooms and showers.
“Our new Arlington location extends TechSpace’s heritage of delivering extraordinary flexible, modern office space and technology services to all businesses as well as enterprise companies,” said Victor Memenas, Chief Executive Officer for TechSpace, in a statement. “We’re excited to bring our model of creative flexible office space and collaborative social experience combined with our exceptional customer service to the Arlington community.”
More from a TechSpace press release:
TechSpace Arlington will be prominently positioned along the Rosslyn-Ballston Corridor within easy reach of Washington DC, The Pentagon, Tyson Corner, Maryland Suburbs, the Ballston-MU Metro, I-66 and Route 50. The campus is also close to retailers including Sweetgreen, Taylor Gourmet and celebrity Chef Mike Isabella’s 3 concept restaurants, Kapnos Taverna, Pepeita and Yona. This campus will join nine existing TechSpace locations in New York City, Los Angeles, Orange County, San Francisco, California and Austin and Houston, Texas.
“TechSpace Arlington will allow us to expand our outstanding customer service and highly flexible, low-commitment model to many more companies seeking to grow their businesses without the burdens of long-term leases and unnecessary capital investment,” said Memenas.
TechSpace will complete with a number of existing coworking spaces in Arlington, including the soon-to-open Spaces in Rosslyn, MakeOffices in Clarendon and WeWork in Crystal City, among others. There is demand for coworking space in Arlington: latter two offices are both at or near capacity.
Photo via Shooshan Company.
The University of Virginia’s Darden School of Business is expanding into two floors of a Rosslyn high-rise office building.
The new “state-of-the-art learning facility” will occupy the 30th and 31st floors of 1100 Wilson Blvd — owned by Monday Properties — with administrative, conference and classroom space taking up approximately 40,000 square feet. The school already has regional staff offices in the building and holds executive MBA classes at 1000 Wilson Blvd and 1919 N. Lynn Street.
“We are pleased to continue building Darden’s presence in Northern Virginia and the metro DC area at this premier Rosslyn location,” Darden School of Business Dean Scott C. Beardsley said in a statement. “Rosslyn’s proximity to major spheres of influence in D.C., including Capitol Hill and the White House, played a significant role in our decision, with the support of the University of Virginia.”
Local architects are designing the space, which will include tiered classrooms, flat classrooms, learning team rooms, open study areas, a board room, conference rooms and office space. A large ballroom will serve as a food service and conference space.
At its meeting last month, the Arlington County Board took up the issue of Monday Properties converting office space in the building to educational use. The business school is scheduled to move into its new location next spring.
Another change coming to 1100 Wilson Blvd next year is the opening of a 5,000-square-foot rooftop deck for tenant use. The indoor-outdoor space, touted by Monday as “one of the most expansive rooftop deck amenity offerings in the DC-metro market,” will be able to accommodate events and conferences.
A $13.8 million plan to move Arlington Public Schools’ offices from the Education Center to prepare for its use as a high school is set to begin later this year.
The Education Center, which houses various APS offices as well as the Arlington School Board’s meeting rooms, will be used as part of a “hybrid option” alongside the Career Center to add 1,300 high school seats for APS. The Education Center is adjacent to Washington-Lee High School.
APS’ offices are set to relocate to Sequoia Plaza Two at 2100 Washington Blvd, which already houses the School Health Bureau that provides health programs and services, as well as the Parent-Infant Education and Environmental Health programs.
Separately, the county’s Department of Human Services consolidated more than 80,000 square feet of facilities into three buildings at its headquarters at Sequoia Plaza in 2014.
As part of a plan approved last December, the School Board agreed to amend its lease at the property and add just under 80,000 square feet of new office space. In May, the Board approved a design for the office space, which will be spread across four floors.
At its meeting Thursday, August 17, the School Board advanced a construction contract for Sequoia Plaza Two, and will vote to approve the contract as an action item at its September meeting.
Under a timeline presented by APS staff, construction would begin in September and take until April 2018. The first phase of moving would begin in December, with the second phase to begin in April once construction is complete.
Jeff Chambers, APS’s director of design and construction, said that first moving phase would be to move APS staff already based at the building elsewhere to accommodate construction. Chambers said the project will not require any more funding than the $13.8 million already budgeted.