(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
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.”
Crystal City’s bevy of aging office buildings have long been in need of a makeover, and Arlington officials hope Amazon’s arrival will spur some big development changes in the neighborhood.
The tech giant itself will be responsible for a major transformation of the newly christened “National Landing” all on its own, of course. Amazon will start off by leasing space from property owner JBG Smith in Crystal City, with plans to fully renovate those office buildings, and even construct its own facilities on various plots of land in Pentagon City.
And while the company could one day control as much as 8 million square feet of office space in the area, there are plenty of other buildings dotting Crystal City’s landscape that Amazon won’t touch. JBG alone controls another 6.2 million square feet of office space throughout the neighborhood, including a whole variety of buildings constructed decades ago, when Crystal City was primarily a home for the military and federal agencies.
It’s those structures that Arlington leaders are most anxious to see receive a refresh, in order to lure even more businesses to the area. While Amazon’s new headquarters will put a huge dent in the neighborhood’s office vacancy rate, officials say the county still has plenty of work left to do in that department.
“Many of these buildings were purpose-built for the federal government or overflow from the Pentagon,” Anthony Fusarelli, the assistant director of the county’s Department of Community Planning, Housing and Development, said during a question-and-answer session live-streamed on Facebook last night (Monday). “As the economy diversifies, the building stock needs to diversify with it.”
Sally Duran, the chair of the county’s Economic Development Commission, pointed out that business leaders have been strategizing ways to orchestrate such changes in Crystal City for years now, dating back to the immediate aftermath of the Pentagon’s Base Realignment and Closure process. But the county lacked any sort of driving factor to spur that change, she noted, making Amazon’s selection of the area quite welcome news indeed.
Fusarelli also observed that many Crystal City property owners, including JBG, were already nearing a critical decision point about how to handle the future of their buildings. Given the age of the structures, he said owners faced one of just a few options: sell their holdings, “reinvest and try to cary the building forward for 10 to 20 more years,” or simply “demolish and redevelop.”
With Amazon about to bring 25,000 jobs to the area, he expects to see plenty of developers choosing the third option.
“We may have these 40-, 50-year-old buildings come off the line and be replaced with residential buildings, or other uses,” Fusarelli said. “We may see the vacancy rate go down over time to the extent that additional activity in this area will lead to redevelopment and changing uses.”
Even before Amazon’s announcement, Fusarelli says the county was projecting an additional 20 million square feet of development in the area he dubbed “the Route 1 corridor,” rather than the controversial “National Landing” moniker, through 2025. Accordingly, he expects that the county will be ready to embrace all that new change, rather than be overwhelmed by it.
“Over the past 14 months, we’ve been evaluating the area and making sure it could manage that growth, and it could,” said Christina Winn, director of Arlington Economic Development’s Business Investment Group. “It was planned for that.”
Of course, there’s plenty of community consternation around just how the area will cope with Amazon-related growth, with apprehension surrounding everything from the company’s impact on transportation networks to home prices.
But county officials remain adamant that the slow pace of the tech giant’s arrival, to be stretched out over the better part of 12 years or so, will help Arlington adjust to the changes gradually. The company plans to add only a few hundred workers in the near term, then bring on about 2,000 staffers a year through 2030.
Officials also stressed that the county will review every step of the assembly of the new headquarters. The County Board will vote no earlier than February on the outlines of the state’s proposed deal with Amazon; then, the company will submit individual applications for each new piece of construction it’s planning, most of which will require the Board’s scrutiny.
Fusarelli says the county doesn’t expect to see any applications from Amazon until early next year, projecting a first Board vote on new Amazon developments by mid-2019 at the earliest.
“We don’t expect a flood of Amazon-specific building proposals in the first quarter of next year,” Fusarelli said. “What we do expect is a gradual submission of projects over time that align well with their need to house workers.”
Sponsored by Monday Properties and written by ARLnow.com, Startup Monday is a weekly column that profiles Arlington-based startups and their founders, plus other local technology happenings. The Ground Floor, Monday’s office space for young companies in Rosslyn, is now open. The Metro-accessible space features a 5,000-square-foot common area that includes a kitchen, lounge area, collaborative meeting spaces, and a stage for formal presentations.
Convene, a New York-based company offering flexible meeting and event spaces, has moved into a new space in Rosslyn.
The Rosslyn Convene location opened last Thursday (Nov. 1), occupying the top two floors of the CEB Tower at 1201 Wilson Boulevard.
Inside the new offices are full-service meetings and event spaces and amenity services for building tenants like research and advisory firm Gartner Inc., from whom Convene is subleasing the 35,000 square-foot space.
The company offers flexible workspaces, but the focus of the new office is on providing spaces for building tenants.
Convene will also manage a full-service culinary program, offering meals and pantry services to building tenants.
“Opening Convene at 1201 Wilson is an exciting moment for Convene, for both tenants of CEB Tower and companies located the Rosslyn and D.C. area,” said Michael Burke, vice president of real estate and development at Convene, in a press release. “This space is a perfect example of how Convene’s approach to partnering with landlords benefits both property owners and tenants, and we are excited to expand our presence in the nation’s capital and serve the Rosslyn business community in more places and more ways.”
Convene is signed to the space for 14.5 years.
This is the second Washington, D.C. area location for Convene, which also operates a 15,000 square-foot location in Tyson’s Corner.
Photo via @RosslynVA
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