This $85.4 million, four-story, 132,000-square-foot facility embodies Skanska’s specialty of creating purpose-built spaces catering to educational institutions’ needs.

It sits immediately north of GMU’s Institute for Advanced Biomedical Research. There are another 5,000 assignable square feet of backfill at Katherine G. Johnson Hall and Discovery Hall.

The building houses advanced research laboratories, specialized teaching facilities and flexible innovation zones that are designed to facilitate groundbreaking work in fields such as bioengineering, bioinformatics and computational life sciences.

READ ALSO: Life Science Trends to Watch in 2025

The structure is designed to support a growing academic community and features instructional labs, experiential learning spaces, classrooms and offices. The building serves the diverse needs of GMU’s Colleges, including Engineering and Computing, Science, Education and Human Development, and Visual and Performing Arts. The facility caters to STEM-H disciplines, supporting students and faculty engaged in cutting-edge research and education.

Skanska’s project pipeline

Skanska is currently working on projects totaling more than $640 million across Maryland, Washington, D.C., Virginia and North Carolina.

Similarly, in Baltimore, a life science building opened in January when Wexford Science & Technology and the University of Maryland, Baltimore, launched 4MLK, an eight-story, 400,000-square-foot center. The facility is part of the university’s BioPark.

In August, nearby in the Rosslyn-Ballston corridor of Arlington, Va., Skanska completed 3901 Fairfax, a 201,000-square-foot office building. Skanska was the $128 million project’s general contractor.

And last September, the New York City Economic Development Corp. selected Skanska as the construction manager for the first phase of the Science Park and Research Campus Kips Bay. The project aims to transform an entire city block at East 25th Street and First Avenue on Hunter College’s Brookdale Campus into a 2 million-square-foot hub for life science innovation and education, featuring academic, public health and research space. The anticipated contract award is expected to be about $1.6 billion, with construction scheduled to begin at the end of this year.

The post Skanska Delivers $85M Metro DC Life Science Building appeared first on Commercial Property Executive.

The portfolio consists of two industrial parks. Linden Business Center is at 7245-7795 Coppermine Drive. The 109,809-square-foot property was built in 2001 and currently has nine tenants. Gateway Centre is at 7201-7401 Gateway Court. The 102,277-square-foot property was built in 1988 and currently has eight tenants.

Gateway & Linden is near the heart of the nation’s No. 2 hub for data center real estate absorption, according to CBRE’s data center trends report, where high-quality industrial flex assets are becoming increasingly scarce.

The buildings are positioned to serve warehouse users supporting the data center industry and the 8.5 million square feet of data center space currently there. Data center real estate within Prince William County is estimated to increase to 80 million square feet over the next decade.

READ ALSO: Manufacturing Surge Drives Industrial Expansion

Essential roadways Route 29/I-66 corridor, Interstate 66, Prince William Parkway and Balls Ford Road are conveniently close to the Gateway & Linden portfolio.

A supply-constrained market

There are only 188,000 square feet of overall industrial product currently under construction, all scheduled to deliver during the first half of 2025, according to CBRE’s Northern Virginia fourth-quarter industrial report.

Nothing broke ground in Northern Virginia in the fourth quarter. Several Class A properties are expected to begin construction in early 2025.

“This acquisition of Gateway & Linden secures a prime industrial asset in Northern Virginia where industrial-zoned land is rapidly becoming scarce and existing properties are redeveloped for other uses,” Lauren Kowall, senior vice president of investments at Penzance, told Commercial Property Executive.

“Our strategy focuses on transforming vacant office-heavy spaces into higher-demand industrial facilities, positioning the property to capitalize on the growing need for warehouse space amid increasing challenges to new industrial development.”

JLL’s Mid-Atlantic Capital Markets team, including Bill Prutting, Craig Childs and Chris Dale, were the sole advisors on the sale transaction. JLL’s metro D.C. industrial team will lead leasing.

“Manassas stands out as a unique industrial market facing a shrinking supply of traditional industrial space, driven by the unprecedented surge in data center development over the past three years,” Prutting told CPE.

“This trend has significantly increased the long-term value of properties like Gateway & Linden, as long-established regional tenants seek new locations due to the redevelopment of their current sites.”

The post Penzance Pays $55M for Northern Virginia Portfolio appeared first on Commercial Property Executive.

Whiting-Turner’s will build its corporate headquarters with the help of architect Gensler as part of a 50-year ground lease agreement, which will be a cornerstone of long-term collaboration between the two organizations.

The 150,000-square-foot office building is expected to be completed in 2028. It will include a safety-focused training center and connect Whiting-Turner and Goucher College to the surrounding Towson area, 8 miles north of Baltimore.

The facility will also introduce young adults to career opportunities in construction and design.

For the past 51 years, Whiting-Turner’s headquarters have been the Hampton Plaza Office Building on East Joppa Road in Towson.

Six months earlier, Goucher College and Edenwald Senior Living announced plans for Maryland’s first university retirement community.

It will combine cultural and educational activities through Goucher with the amenities and services of a Life Plan Community to foster lifelong learning and connection.

Whiting-Turner has been active in supporting the Baltimore area. It recently announced that it will partner with the Boys and Girls Clubs of Metropolitan Baltimore and the Baltimore Ravens to create a Hilton Recreation Center that will serve 2,000 youth annually.

In December, Whiting-Turner was part of a group that began construction for VanTrust on the 526,119-square-foot Building C at the 2.4 million-square-foot Platte International Commerce Center development in Kansas City.

Delivery is expected in July for the facility, which might be expanded to 1.1 million square feet.

The post Whiting-Turner Brings Corporate HQ to Goucher College appeared first on Commercial Property Executive.

A spokesperson for Tyler Duncan Real Estate identified the tenant as JLG Industries Inc., a manufacturer of high-level access equipment, such as boom lifts and telescopic handlers, headquartered in McConnellsburg, Pa.

Matan did not respond to Commercial Property Executive’s request for additional information, but its announcement stated that 280,000 square feet of space remain available at 8484 Progress Drive and the adjoining 8480 Progress Drive. Both buildings feature high-bay space and reportedly are suitable for a variety of office, R&D, and other technology-focused users.  

The 177-acre R&D park is immediately south of the Monocacy River and already home to Charles River Laboratories and the National Cancer Institute’s 332,000-square-foot Frederick National Laboratory Facility. Matan’s vision for the park encompasses additional facilities for the federal government, educational institutions, an incubator and private-sector companies. The park’s green space includes water features, multiple gazebos and more than 5 miles of walking trails.

READ ALSO: The Most Active Life Science Markets in the US

Matan reported that Riverside Research Park is approved and ready to build with 1.4 million square feet of planned lab, manufacturing and office space.

Matan Cos. was represented in-house by Leasing Director Brad Benna, and the tenant was represented by Tim Shanklin of Tyler Duncan Real Estate.

Public and private entities expand

The life science sector in Maryland’s I-270 corridor also known as the BioHealth Capital Region totals nearly 12.5 million square feet of lab space, driven in large part proximity to such federal agencies as the National Institutes of Health and the Food and Drug Administration, according to a brand-new report from Cushman & Wakefield.

On the private-sector side, AstraZeneca is a big player, having expanded its presence by almost 300,000 square feet last year and with plans for further investments.

Although overall vacancy rose to 14.0 percent, Cushman & Wakefield reports that “suburban Maryland’s supply is not as overbuilt as other top markets, given the overall inventory and size.”

Rents for R&D space in Montgomery County average between $40 and $45 per square foot, triple net. a level that Cushman & Wakefield anticipates will be stable as current space is absorbed. Fortunately, no new space is in the pipeline.

Last September, a joint venture of Matan Co., Rockefeller Group, Mitsubishi Estate New York, Chuo Nittochi and Taisei USA LLC began construction on the first phase of Port 460 Logistics Center in Suffolk, Va., about 20 miles from the Port of Virginia. When it delivers, the campus will total about 5 million square feet.

The post Matan Cos. Lands New Tenant for DC-Area Project appeared first on Commercial Property Executive.

The Minneapolis portfolio has 17 buildings and spans nearly 1.9 million square feet, while the Baltimore acquisition includes 10 buildings totaling 881,000 square feet. The locations and square footage of each asset in the two portfolios were not released and the company declined to offer more details, including the seller or sellers of the assets.

The company described the properties in general terms noting they have highly diversified tenants, high average clear heights, ample loading docks and parking spaces, as well as proximity to major thoroughfares, employment centers and residential neighborhoods.

READ ALSO: The Future Demand for Industrial Is Decarbonized

The firm, which has been among the top five largest cross-border buyers of U.S. real estate over the past five years, focuses on key U.S. industrial markets with significant population bases, diversified economies and resilient tenant demand.

Investcorp noted that as of the fourth quarter of 2024, market rent growth over the past three years averaged 13.4 percent in Baltimore and 11.4 percent in Minneapolis, according to Green Street Advisors data. These figures outpace the 9.3 percent average for the top 50 U.S. metropolitan areas.

Baltimore has seen a recent influx of major corporations including Optum Inc., JLL, Under Armour and Morgan Stanley. Minneapolis has a diverse economy that features 17 Fortune 500 companies like Target Corp., Best Buy Co., 3M Co. and General Mills.

In the U.S., the Bahrain-based firm invests primarily in the industrial and residential asset classes, with 98 percent of its portfolio coming from those two sectors. As of September, nearly 60 percent of Investcorp’s real estate assets under management in the U.S. were in the industrial sector. Since 1996, Investcorp has acquired approximately 1,400 properties totaling more than $26 billion.

Growing U.S. industrial presence

The Minneapolis and Baltimore deals come about five months after Investcorp made three industrial acquisitions totaling about 1.5 million square feet for approximately $300 million. The Dallas and Atlanta infill portfolio had 16 buildings totaling 597,161 square feet and expanded the firm’s existing significant industrial presence in both markets. The West Coast infill portfolio includes 17 buildings encompassing 539,909 square feet across Denver, Las Vegas, San Diego and the San Francisco Bay Area. The Tampa industrial portfolio had eight buildings comprising 279,887 square feet.

Investcorp officials noted well-located, multi-tenanted assets continue to attract interest from tenants and investors as re-shoring and nearshoring efforts reshape the industrial and manufacturing landscapes in the U.S. The three portfolios reflected those characteristics and were expected to provide a resilient cash flow with year-over-year industrial rent growth.

Last April, Investcorp acquired a 1.3 million-square-foot, 31-building industrial portfolio in South Florida and Denver for about $200 million.

A month earlier, Investcorp formed a new investment vehicle valued at $526 million with two leading sovereign wealth funds to focus on acquiring U.S. industrial assets. The investment vehicle’s buying capacity was estimated at about $1.5 billion.

Several properties in Indiana and Florida previously owned by Investcorp changed hands last year. In July, Sperry Equities acquired Northwest Indiana Logistics Portfolio with 639,829 square feet across two buildings in Portage, Ind. Investcorp had owned the assets, which are in the Chicago industrial market, according to CommercialEdge data.

Cypress Park, a five-building industrial park in Orlando, Fla., with 256,838 square feet, was sold to Harbert Management Corp. in April for $40.5 million. The industrial park had been acquired by Investcorp in 2021 for $28 million, according to CommercialEdge.

The post Investcorp Pays $335M for Industrial Portfolios appeared first on Commercial Property Executive.

Completed in 1990, Century Square underwent renovations in 2016. The retail center encompasses 16 buildings spread across some 64 acres, CommercialEdge also shows.

Anchored by Lowe’s Home Improvement, Hobby Lobby, Shop’n Save, Dunham’s Sports, Luxury Cinemas and Planet Fitness, Century Square also features a diverse mix of regional and national retailers such as Dollar Tree, Taco Bell, Arby’s, Panda Express, McDonald’s, AT&T, First National Bank and Burlington, among others. The property was 82.7 percent leased at the time of sale.

READ ALSO: Net Lease Investment Volume Surges

Located at 1025-4775 Mountain View Drive, Century Square is some 10 miles from downtown Pittsburgh. The shopping center serves around 192,000 residents within a 5-mile radius, with the average household income of $90,434, according to Red Mountain.

Positive results for Pittsburgh’s retail market

Pittsburgh’s retail market recorded positive results in the last quarter of 2024, according to a recent Colliers report. Developers broke ground on some 116,650 square feet of retail space, significantly more than the 24,688 square feet recorded the previous quarter.

Meanwhile, the vacancy rate remained unchanged over the quarter, at 4.9 percent. In addition, last year’s fourth quarter marked the third consecutive quarter of positive absorption for the market, with the year-to-date total to 282,430 square feet.

The post Red Mountain Group Buys Pittsburgh-Area Shopping Center appeared first on Commercial Property Executive.

Employees began moving into the building in November. Currently FNB Financial Center is about 70 percent occupied, with roughly half of that space taken up by FNB. A JLL team led by Market Director JC Pelusi represents ownership in commercial lease negotiations.

Buccini Pollin Group was the lead developer of the building, which was designed by Gensler. Since breaking ground in 2021, the development of FNB Financial Center has generated over $7 million for a Hill District community-directed reinvestment fund and put over $3 million into programs to benefit minority-owned businesses, along with the Hill District Federal Credit Union, according to Buccini Pollin.

The tower features an amenity floor with a fitness center, conference rooms, lounge space and a Wi-Fi-enabled, tenant-only terrace. The bank’s space includes a trading floor for capital markets employees, with a suspended LED stock ticker visible from the building exterior.

READ ALSO: Top 100 Office Leases of 2024 Point to Stabilization

The property has achieved LEED Gold certification, with a number of health- and wellness-oriented features, including floor-to-ceiling windows for natural light and advanced HVAC systems. There is also a ground-floor retail space of 15,000 square feet, with a coffee bar, full-service café and public plazas.

Pittsburgh’s soft office market

In the fourth quarter of 2024, the Pittsburgh market turned in negative net absorption of 109,953 square feet, spurred by losses totaling 142,437 square feet in the central business district, according to JLL data. Much of that was driven by EQT’s downsize at 625 Liberty and FHLB’s departure from 601 Grant St.

Even so, “the completion of FNB Financial Center marked a significant milestone for Pittsburgh’s office market in the fourth quarter,” JLL noted in its market report. “Despite challenging market conditions, the project delivered nearly 70 percent preleased.”

The completion of the building not only changed the downtown Pittsburgh skyline, but it “injected new life” into the Lower Hill District, JLL reported, and will likely be a catalyst for future development in the area.

The post $300M Headquarters Tower Opens appeared first on Commercial Property Executive.

Commercial property insurance company FM Global has signed a 32,000-square-foot office lease at 1906 Reston Metro Plaza in Reston, Va.

Owned by Comstock Holding Cos., the 150,000-square-foot tower is part of the three-building Reston Metro Plaza complex, part of the larger mixed-use Reston Station development.

FM Global joins other tenants such as Qualtrics and Neustar, the latter having signed the 100,000-square-foot lease with Comstock in 2019. Google, Spotify and ICF International also have established headquarters at the Metro Plaza district.

The office complex has access to the Wiehle-Reston East Station, on Metro’s Silver Line. Dulles International Airport is some 8 miles away, while Washington, D.C. is 20 miles southeast.

READ ALSO: Top 100 Office Leases of 2024 Point to Stabilization

As of December, office vacancy in the metro clocked in at 18.5 percent, 60 basis points higher over a 12-month period, a recent CommercialEdge report shows, but was below the 19.8 percent national average rate.

The Reston Metro Plaza office complex

Comstock Holdings Cos. completed the office towers in 2020. A year later, the company secured $350 million in refinancing from Blackstone and DivcoWest.

The 15-story, 150,000-square-foot 1906 Reston Metro Plaza has a LEED Silver certification and is the second office building of the three developments. Designed by architect Helmut Jahn, the 365,000-square-foot 1900 Reston Metro Plaza is the first of the three office towers and features the Spaces. coworking location. The third building is the 1902 Reston Metro Plaza which encompasses 250,000 square feet.

Apart from its office complex, the 90-acre Reston Station also includes residential units, dining and retail spaces. The development is one of the largest mixed-use properties in the Mid-Atlantic region. The ownership plans to deliver this year 500 more residential units and a JW Marriott Hotel & Residences.

The post Comstock Inks 35 KSF Lease at DC-Area Tower appeared first on Commercial Property Executive.

As vacancy rates climbed, loan delinquencies rose, and property values dropped through the year, landlords have increasingly been disposing of their underperforming office assets. Other alternative solutions, such as repositioning or converting, continue to remain popular choices.

Slow construction activity

As of December, D.C.’s office pipeline comprised 1.1 million square feet of space across seven properties, representing 0.3 percent of existing stock—below the national average of 0.8 percent. Among gateway markets, Boston led with 3.4 percent, followed by San Francisco’s 2.3 percent. When adding projects in the planning stages, the figure reached 3.1 percent—exceeding the national average of 2.9 percent and outperforming Chicago’s 2 percent, as well as Manhattan’s and Los Angeles’ 3 percent.

By comparison, at the end of 2023, a total of 3.5 million square feet of office space was under construction in D.C. In December 2024, Boston was the gateway city with the largest under-construction stock (8.7 million square feet), followed by San Francisco (3.8 million square feet). Only Chicago’s pipeline was smaller than the U.S. capital’s, with 870,344 square feet underway.

The largest office project currently underway remains the 420,000-square-foot 600 Fifth St. NW. Developed by Rockefeller Group and Stonebridge, the $375 million development topped out in May, with completion expected by 2026.

Construction starts included 964,674 square feet across three properties, accounting for 0.2 percent of existing stock, while developers completed 2.4 million square feet across 11 properties, representing 0.6 percent of total stock. Among significant completions in D.C. is Dulles Discovery 5, a 514,000-square-foot office building completed in early 2024 in Herndon, Va. Developed by Peterson Cos., the property is within the company’s Dulles Discovery, a 2.4 million-square-foot mission-critical development.

D.C.’s sales volume second in the nation

At the end of 2024, the metro’s office transactions totaled $2.6 billion, with 104 properties comprising 12.3 million square feet changing hands. Last year’s investment volume rose 19.8 percent year-over-year, propelling the metro to second place among gateway markets, behind Manhattan’s $3.9 billion.

The first quarter of last year was the busiest in terms of deals, ending with $947.4 million trading, point after which the sales volume decreased until December. Despite this downward trend, Washington, D.C.’s investment activity in 2024 picked up, compared to 2023, when 9.9 million square feet traded for $1.9 billion.

Significant transactions include CoStar Group’s $373 million acquisition of CEB Tower at Central place, a 560,000-square-foot office building in Arlington, Va. A joint venture between PGIM Real Estate and JBG Smith sold the Class A+ property at 1201 Wilson Blvd. in February.

Another notable deal was MRP Realty’s $225.7 million purchase of Gallery Place at 616 H. St. NW, a 297,002-square-foot property in D.C.’s Seventh Street Corridor submarket. In joint venture with Global Fund Investments, MRP bought the asset after its previous owner defaulted on a $179 million loan backed by the mid-rise building.

Office properties traded at an average sale price of $211 per square foot—above the national figure of $175 per square foot. Across similar markets, Miami emerged as the priciest metro, with $400 per square foot, while the lowest sale prices were recorded in Chicago ($85 per square foot).

Vacancy rate continued to climb

Washington, D.C.’s office vacancy rate clocked in at 18.5 percent as of December—slightly below the national figure of 19.8 percent and marking a 60-basis-point increase year-over-year. The metro’s rate was higher than in Miami (15 percent), Manhattan (16.6 percent) and Boston (17 percent). The highest vacancy rate was recorded in San Francisco, at 28.8 percent.

Significant leases in 2024 include Washington Post’s 300,000-square-foot extension at One Franklin Square. The property totals 612,189 square feet and is owned by Hines and General Motors Pension Fund.

Additionally, Fannie Mae signed a long-term commitment of 340,000 square feet at Midtown Center in downtown D.C. Carr Properties and IGIS Asset Management are the owners of the 867,000-square-foot building.

High potential for office-to-residential makeovers

As vacancies increased in most markets, office-to-residential conversions remained an attractive option for property owners. CommercialEdge launched the Conversion Feasibility Index, a new tool that highlights markets with strong office-to-residential repositioning potential, using a set of property-level scores. Powered by Yardi, the CFI score has three tiers, with Tier I assets being the most suitable candidates.

Washington, D.C. has 72 properties totaling 6.4 million square feet in the Tier I category. Additionally, there are 421 office buildings in the Tier II category, totaling approximately 53.8 million square feet.

Developer Penzance has filed plans for an office-to-residential conversion that includes two buildings in Arlington, Va., within the Rosslyn submarket. The pair of properties are at 1901 N. Fort Myer Drive and at 1911 N. Fort Myer Drive and total 249,684 square feet. The proposed project is set to include two residential towers with 862 apartment units and a condominium tower with 82 units. The 1960s buildings hold CFI scores of 95 and 91 points, respectively.

Coworking gains ground at affordable rates

Washington, D.C.’s coworking sector comprised 6.4 million square feet across 277 locations as of December. Manhattan was the gateway market with the largest flex office footprint (11.3 million square feet), while D.C. outperformed Boston’s 4.9 million square feet. The metro continued to emerge as a hotspot for virtual office providers due to its affordable rates, which last year dropped as low as $80 per month, according to CoworkingCafe.

The metro’s share of flex space as percentage of total leasable office space reached 1.6 percent—lower than the national average of 1.9 percent and than its peer markets. Miami led the ranking with a 3.8 percent figure.

WeWork was the flex office provider with the largest footprint in D.C., with locations totaling 566,182 square feet. The company was followed by Regus (528,779 square feet), Industrious (508,332 square feet, Spaces (453,864 square feet) and Local Works (400,997 square feet).

The post DC Office Investment Picked Up Steam in 2024 appeared first on Commercial Property Executive.

The collection includes warehouse, laboratory and open office spaces on four parcels. A fifth parcel, of about 2.6 acres, provides additional parking. The location has immediate access to Interstate 64 and thereby easy connections to the port and nearby military bases and shipyards.

The assets were 84 percent leased by a total of 37 companies at the time of sale. About 60 percent of the roster is made up of medical and government-related tenants, including Sentara Healthcare and Chugach Government Solutions, Eric B. Robison, executive vice president of Capital Markets at Thalhimer, told Commercial Property Executive.

READ ALSO: Industrial Sector Transitions as Supply Shrinks

Robison added that more than three-quarters of the occupied GLA has executed new leases or renewals since August 2020, showing the tenant roster’s resilience through the COVID-19 pandemic.

The buildings in the portfolio are:

•  Battlefield Corporate Center, at 535 Independence Parkway (one story, 96,720 square feet);

•  Greenbrier Technology Center I, at 814 Greenbrier Circle (one story, 97,194 square feet);

•  Greenbrier Technology Center II, at 816 Greenbrier Circle (two stories, 82,229 square feet); and

•  Greenbrier Circle Corporate Center, at 825 Greenbrier Circle (two stories, 126,874 square feet) and 1801 Sara Drive (105,797 square feet).

The Class B properties were completed between 1981 and 1987, according to information provided by CommercialEdge.

Robison and Bo McKown of Thalhimer’s Capital Markets Group, together with Eric Berkman and Kevin Sidney with Cushman & Wakefield’s Capital Markets team in Washington, D.C., represented the seller. Financing was sourced by the Cushman & Wakefield debt team of Michael Zelin, Marshall Scallan and Ryan McMahon.

Temporary lull

The Hampton Roads industrial space market is benefitting from clean energy and rail infrastructure improvements at the Port of Virginia, even as market activity moderated toward year’s end, in part of over labor concerns at the port, according to a fourth-quarter report from Cushman & Wakefield.

Industrial vacancy was up slightly, to 4.4 percent in December, but Cushman & Wakefield anticipates absorption gains this year.

In September, a joint venture of Rockefeller Group, Matan Cos, Mitsubishi Estate New York, Chuo Nittochi and Taisei USA LLC started construction on the first phase of Port 460 Logistics Center in Suffolk, Va. Upon completion, the property will comprise about 5 million square feet.

The post Heritage Capital Buys Hampton Roads Industrial/Flex Portfolio appeared first on Commercial Property Executive.

An affiliate of Melrose Solomon Enterprises has acquired Tavern Square, a 171,738-square-foot office building in Alexandria, Va.

The property traded for $38.9 million, Washington Business Journal reported. Westport Capital Partners previously owned the asset, according to CommercialEdge information.

JLL Capital Markets worked on behalf of the seller and procured the buyer.

Tavern Square had been under Westport Capital Partners’ ownership since 2018, when the company purchased the property from The Pyne Cos. for $50.4 million, the same source shows.

READ ALSO: What’s Defining Office in 2025?

Tavern Square occupies an entire city block, enclosing 421 King, 123 N. Pitt, and 110 and 132 N. Royal St., in Old Town Alexandria and some 8 miles from Washington, D.C. The low-rise is also across the street from Courthouse Square, a 120,031-square-foot office building Melrose Solomon Enterprises bought in 2023.

The office national vacancy surged last year and despite some predictions for an uptick in sales volume, the prices are expected to stagnate, a recent CommercialEdge report shows. An initiative such as D.C.’s Office-to-Anything initiative aim to encourage adaptive reuse, with growing interest in converting offices to data centers, industrial spaces and coworking hubs alongside residential projects.

Fully renovated office building

Built in 1967, Tavern Square underwent a full renovation in 2019, adding new features such as a fitness center and a conference center with tenant lounge. The five-story office building includes approximately 40,000 square feet of ground floor retail space, six passenger elevators and 330 car parking spots.

The property has 23 tenants, including CB Design Group, MODE4 Architecture and Johnson/Citronberg, among others, CommercialEdge shows. The asset was 84 percent leased at the time of the sale.

The JLL Capital Markets team included Senior Managing Director Matt Nicholson, Directors Kevin Byrd and Daniel Naughton, Senior Managing Directors Andrew Weir and Jim Meisel, Senior Director Dave Baker, and Managing Directors Jordan Lex and Dean Sands.

The post Melrose Solomon Pays $39M for DC-Area Office Building appeared first on Commercial Property Executive.

Law firm Freshfields has signed a 117,000-square-foot, long-term lease at Midtown Center in Washington, D.C. Carr Properties owns the 869,000-square-foot, two-building office complex. CBRE brokered the deal on behalf of both parties, while Carr Properties also had in-house representation.

Freshfields will occupy floors six through eight at the property’s West Tower, more than doubling its presence in the metro.

The firm will relocate from 700 13th St., N.W., an almost 244,000-square-foot office building where the company has been located since 2014. The leased space at that property comprised 52,000 square feet, according to the Washington Business Journal.

READ ALSO: What’s Defining Office in 2025?

Midtown Center is now more than 80 percent leased. The roster also includes Fannie Mae, which downsized its headquarters from 713,500 square feet to 340,000 square feet in August.

The 14-story property is at 1100 15th St., N.W., in downtown Washington, D.C., four blocks north of The White House. Ronald Reagan Washington National Airport is 4 miles southwest.

Midtown Center, up close

Carr Properties completed Midtown Center in 2017, using funds from a $525 million construction loan from Wells Fargo Bank, CommercialEdge shows. In 2021, the company sold a 49 percent stake in the asset to IGIS Asset Management, in a deal that valued the asset at $980 million.

The Class A property consists of two LEED Gold-certified buildings connected by three pedestrian bridges. Features include floorplates averaging 75,500 square feet, 16 passenger elevators and a 45,000-square-foot retail plaza.

Amenities include a fitness center, yoga room, rooftop terrace and bike room. The owner plans to add new amenities to the buildings, including conference and entertainment centers, as well as a rooftop penthouse.

CBRE Executive Vice President Amy Bowser and Senior Vice Presidents Brooks Brown and Harry Stephens, along with Vice Chair Rob Copito, arranged the lease. Carr Properties’ in-house representation comprised Senior Vice President Kaitlyn Rausse and Director Ryan Lopez.

D.C.’s office vacancy sees minor change

Washington, D.C.’s office vacancy rate clocked in at 18.5 percent at the end of December, 60 basis points higher year-over-year, but still below the 19.8 percent national average, the latest CommercialEdge office report shows. The metro’s listing rate during the same period was $41.4, marking a 1.8 percent increase compared to December 2023.

A few months ago, ArentFox Schiff signed a roughly 120,000-square-foot lease also at Midtown Center. The firm will relocate its headquarters to the property in early 2028.

The post Carr Properties Lands 117 KSF Lease in Downtown DC appeared first on Commercial Property Executive.

Reich Brothers has expanded its Mid-Atlantic industrial portfolio with its first acquisition in the metro Washington, D.C., market. The 539,691-square-foot warehouse with cold storage capabilities in Landover, Md., is described as one of the largest infill distribution centers in the region.

Nuveen Real Estate was listed as the most recent owner of the property at 6304 Sheriff Road, according to CommercialEdge data. Nuveen had acquired it from Link Logistics in September 2019 as part of a 100-property portfolio transaction totaling 29 million square feet.

JLL Capital Markets and JLL Metro DC Industrial Leasing represented the buyer in the Landover deal.

A value-add industrial property near Washington, D.C.

Situated less than 2 miles from the DC line and minutes from the Capital Beltway, the 21.7-acre property also includes 4 acres of industrial outdoor storage space. Downtown Washington, D.C., is some 10 miles west.

Completed in 1963, the cross-dock facility features 15 docks, 24-foot maximum clear heights and 10,000 square feet of office space. The building also is one of the East Coast’s largest freezer/cooler assets with tri-temp capabilities, JLL noted.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

Bill Prutting, Craig Childs and Chris Dale from JLL’s Mid-Atlantic Industrial Capital Markets team were the sole advisors on the sale transaction. They partnered with John Dettleff, Dan Coats, Abbot Wallenborn and Sam Haas of JLL’s Metro DC Industrial Leasing team, which will lease the property on behalf of the new owner.

Reich plans to implement a multi-million dollar capital investment program. Improvements are slated to include installing a new roof, enhancing cold storage elements, upgrading the entrance and loading docks and completing interior and exterior painting.

More Reich Brothers moves

Reich Brothers, a 30-year-old firm focused on acquiring large-scale manufacturing, distribution and freezer/cold storage assets, has owned and operated more than 50 million square feet of industrial space across the U.S. The current deal expands its Mid-Atlantic portfolio to more than 2 million square feet, with additional purchases planned.

In another recent transaction, the firm acquired an industrial complex at 100-200 Sea Ray Drive in Merritt Island, Fla., from AAEA Investments LLC, for $27.7 million. Arnott Industries is the sole tenant of the Brevard County property.

In November 2023, Reich Brothers purchased a 309,968-square-foot industrial facility in Toledo, Ohio, from Stellantis in a sale-leaseback transaction. It was the firm’s first acquisition in the Toledo market.

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CBL Properties has sold Monroeville Mall and its Annex in Monroeville, Pa., for $34 million. Walmart bought the retail assets totaling 1.2 million square feet, according to CBS News. JLL worked on behalf of the seller, while CBRE Senior Vice President Tom Flynn represented the buyer.

CBL used approximately $7.1 million of the net proceeds to lower the outstanding principal of its outparcel and open-air center loan to $333 million. The deal enabled the release of a collateral parcel.

The retail center traded at an 86 percent discount from its previous sale. CBL had acquired the shopping mall in 2004 for $231.2 million and the transaction included the assumption of a $134 million fixed-rate, non-recourse loan, The Chattanoogan reported at the time.

Redeveloping Monroeville Mall

Monroeville Mall and the adjacent Annex cover an 185-acre site at 200 Mall Circle Drive, just off U.S. Route 22 and close to Interstate 376. Downtown Pittsburgh is less than 13 miles west.

The mall’s roster includes Barnes & Noble, Claire’s, Forever 21, Macy’s, H&M and JD Sports, among others. The Annex has Going Going Gone, Guitar Center, Full Throttle Adrenaline Park and several other retailers as tenants.

Walmart has selected Cypress Equities to manage the property and spearhead its redevelopment into a new retail and commercial destination adapted to the shoppers’ 21 century needs. The last time Monroeville Mall underwent renovations was in 2003, when $10 million contributed to upgrading its decor, as well as installing air chillers.

In 2025, the retail sector is expected to continue the transformation brought about by last years’ trends. Experiential retail and high-quality real estate remain the main drivers for enhancing in-person shopping, as well as reducing vacancies.

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Carr Workplaces has reopened its coworking location at 300 New Jersey Ave. N.W. in Washington, D.C. The space was subject to a complete makeover following a lease renewal.

The company has provided flex office spaces at the property since 2011, where it occupies 27,500 square feet, CommercialEdge shows.

CSO Architects oversaw the designs for the new workspace, located on the building’s third floor. Amenities include an expanded reception and social hub, a library, a wellness space, conference rooms, as well as exclusive catering and beverage services.

READ ALSO: Coworking Spaces Surge Amid Changing Demand

Last year in November, Carr Workplaces signed a 26,331-square-foot lease with Comstock Holding Cos. The new flex office location is scheduled to open this spring at The Hartford, in Arlington, Va., expanding the company’s Mid-Atlantic footprint.

Part of America’s Square on Capitol Hill

The property came online in 2009 and it has been under Jamestown ownership since 2015, when the company acquired it from Dweck Properties, according to CommercialEdge. The asset is part of America’s Square office complex, located one block away from the Senate Office Buildings, the Supreme Court and U.S. Capitol.

The Class A, 10-story 255,904-square-foot building has a LEED Gold certification. The property features 26,000-square-foot floorplates, four passenger elevators, 252 car parking spaces and 4,000 square feet of retail. The tenant roster includes American Council of Life Insurers and United Soldiers and Sailors of America, the same source shows.

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Construction giant HITT Contracting has broken ground on a new headquarters building, a 270,000-square-foot structure in Falls Church, Va., which is part of metro Washington, DC. Completion is slated for early 2027.

Designed by architectural firm Gensler, the six-story building at 7125 W. Falls Station Blvd. will be largely office space for HITT, featuring collaborative work zones, wellness facilities and a 1-acre outdoor terrace. In its vicinity will be more than 55,000 square feet of urban parks, along with a 1,400-square-foot interactive digital experience pavilion designed to be a gathering place for locals.

The ground floor will feature a full-service conference center, café, and access to urban parks. The building’s second floor will feature various employee amenities, collaboration spaces, and access to the roof deck. Four additional floors of offices will also offer workspaces designed with neurodivergence in mind to support a variety of working styles.

READ ALSO: 2024 Employment Picture

HITT headquarters will also feature a 40,000-square-foot research lab developed in partnership with Virginia Tech’s Coalition for Smart Construction. HITT is a founding partner of the coalition, which is a university and industry collaboration that will engage with federal and state agencies with the goal of driving innovation in the construction sector.

The headquarters will aim to achieve LEED Platinum certification and meet net-zero energy and net-zero carbon goals. Among other features toward that end, the building will be powered by a 100,000-square-foot photovoltaic solar canopy and wind turbines, offsetting all its energy needs.

A HyperWall building envelope system, developed with building composites, will offer a stronger and more efficient construction, HITT notes. Other sustainable elements will include a power over ethernet system for lighting, power and data. Office furniture in the building will be produced from recycled materials from HITT’s 3D printing farm.

Research projects at the new HQ

HITT is one of the 20 largest contractors in the U.S., with 2024 projected revenues of $8.4 billion. The company employs nearly 1,900 workers across 14 office locations and job sites nationwide.

HITT’s R&D division will carry out more than 20 research projects at the new headquarters, according to the company. Notable ventures already in progress, which will continue at the new facility, include the development of a newly patented prefabricated building skin that reduces weight and increases speed to market.

The contractor is also pioneering the first use of the Caracol Heron AM robotic arm installed in the U.S. for 3D printing. That technology is aimed to augment traditional construction methods, as part of a larger effort to use robotics on-site.

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Wexford Science & Technology and The University of Maryland, Baltimore have opened 4MLK, an eight-story, 250,000-square-foot life science building in Baltimore.

The developer broke ground on the facility, which is part of the university’s BioPark, in the fall of 2022. An $81.5 million loan originated by Ventas financed the construction, according to CommercialEdge information.

The multi-tenant lab and office building is the third such facility developed by Wexford within the campus.

READ ALSO: Life Science Trends to Watch in 2025

Located at 4 N. Martin Luther King Jr. Blvd., the mid-rise is within walking distance of the University of Maryland, Baltimore and less than 1 mile from downtown Baltimore. The Baltimore/Washington International Thurgood Marshall Airport is some 9 miles away.

The property comprises 160,000 square feet of Class A wet lab-capable space, 35,000 square feet of flexible, scale-in-place lab and innovation infrastructure and a 16,000-square-foot civic lounge and assembly space, along with an adjacent public plaza.

The building will house Wexford’s headquarters. In addition, a key tenant will be The University of Maryland School of Medicine, which will establish its new Edward & Jennifer St. John Center for Translational Engineering and Medicine at 4MLK. This center will enhance research collaborations and jointly develop cutting-edge innovations.

Part of a larger life science campus

The BioPark spans 14 acres and includes nearly 1.2 million square feet of laboratory, office, health-care and community-oriented space across seven buildings. Upon full occupancy, 4MLK will be home to the largest concentration of bioscience companies in the Greater Baltimore region.

The national life science construction pipeline has shown remarkable resilience, with 54.7 million square feet of new space underway between 2019 and October 2024, according to CommercialEdge data. Key life science clusters continue to prosper despite general economic challenges, largely due to their reliance on direct research and in-person collaboration.

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American Real Estate Partners has obtained a four-year loan extension for 1600 Market St., an iconic 39-story, 825,968-square-foot office tower in Philadelphia’s Central Business District. The transaction, which also includes access to an increased future lease funding line, has ensured the full capitalization of the property.

Senior lenders Natixis Corporate & Investment Banking and BlackRock, along with mezzanine lender JPMorgan, extended the loan’s maturity through a complex financing structure. As part of the deal, AREP made a significant equity investment in the property. The firm declined to release the investment’s amount.

Natixis CIB provided the five-year, $162.5 million loan in February 2022 that refinanced the Class A property. AREP had acquired the tower in February 2018 from Equity Commonwealth for $160 million.

READ ALSO: Philadelphia Office Prices Drop, Construction Slows

Peter Bayard, managing director at Natixis CIB, was involved in arranging the new transaction.

“The loan extension ensures the long-term financial stability of the property, which is a significant advantage relative to the challenges other projects are facing in today’s commercial real estate market. Our partnership highlights the strength and confidence AREP and our senior lenders, Natixis, BlackRock and JPMorgan, all have in the property’s future,” Brian Katz, co-founder & president of AREP, told Commercial Property Executive.

Katz said the extended funding also gives AREP the resources to maintain 1600 Market’s position as a trophy building and continue attracting high-quality tenants seeking superior properties with stable owners that can perform.

Tenant roster growing

PNC Bank, which has its regional headquarters at the property, is the anchor tenant at the building that is currently 70 percent leased. PNC has committed to 233,411 square feet through May 2031, according to CommercialEdge data.

Recent lease transactions include HNTB—which is occupying 38,375 square feet—Lockton Insurance and Your Part Time Controller, according to AREP. Other tenants include Security Risk Advisors, which leases 21,687 square feet, Stifel, NorthMarq Advisors, Gallagher Law, Crum & Forster and AEGIS insurance firm, the same source reveals.

Focus on amenities

The Center City tower is one block from the Philadelphia City Hall and two blocks from JFK Plaza. Completed in 1982, the building features floorplans of 23,000 square feet and seven elevators, CommercialEdge shows, as well as 10,000 square feet of retail space.

AREP’s $15 million, multi-year renovation of the property was completed in January 2021. The high-rise features at least 8,000 square feet of amenities including collaboration space, conference rooms, wellness and fitness areas and a coffee bar from Elixr, a local favorite. The building has received recognition for its tenant experience app—AREPx—and for the amenity floor design and use of pop art.

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Digital marketing provider Trader Interactive has signed a 12,000-square-foot office lease at Armada Hoffler Tower in Virginia Beach, Va. The tenant will occupy the entire top floor at the property. Colliers and Divaris Real Estate brokered the deal.

The space was previously used by the landlord, Armada Hoffler, which had relocated. The roster also includes Aecom, CAR Group Ltd., Cushman & Wakefield and Legacy Business Advisors Mid-Atlantic, according to CommercialEdge. Six of the tenants have been occupying space at the building since its 2003 completion.

Part of a mixed-use district

Located at 222 Central Park Ave., the property has access to Interstate 264 and is near the Pembroke Office Park. Downtown Virginia Beach is 10 miles east.

The 23-story, 362,500-square-foot tower features 38,500 square feet of street-level retail and a nine-story parking garage with upward of 1,200 spots. The building was awarded the LEED Gold certification in 2017.

READ ALSO: What’s Defining Office in 2025?

Armada Hoffler Tower is part of Town Center of Virginia Beach, a mixed-use district that comprises 760 apartments, 620,000 square feet of retail and 800,000 square feet of office space spanning 25 acres. Despite its rental rates going up more than 20 percent since 2020, the campus’ office component had a 95 percent occupancy rate in the third quarter of 2024 and went up to 98 percent in the fourth quarter.

Nationwide, the office vacancy rate rose to 19.4 percent at the end of November, an increase of 120 basis points compared to the same period in 2023, according to a CommercialEdge report.

The Colliers team included Executive Vice President Perry Frazer and Senior Vice President Chris Kieran. President Michael Divaris, Executive Vice President Krista Costa and Associate Ashley Beck were part of the Divaris Real Estate team.

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BXP has completed the $34 million purchase of 725 12th St. NW, a 300,000-square-foot office building in Washington, D.C. Hines Interests was the asset’s previous owner, according to CommercialEdge information. The firm had paid $61 million for it about 30 years ago, media reports show.

The Boston-based REIT plans to demolish the East End property and redevelop it into an approximately 320,000-square-foot workplace. Demolition work is expected to begin in the second half of this year, according to Washington Business Journal.

Duda | Paine Architects is designing the new building that is slated for delivery in late 2028. The office property is set to feature private terraces and outdoor spaces.

READ ALSO: Office Sector Decline Continues Amid Flexibility Shift

In conjunction with the purchase, BXP also signed a 150,000-square-foot, 15-year prelease with global law firm McDermott Will & Emery for the top five floors of the new building.

McDermott, which opened its first office in D.C. in 1978, has leased space at 500 North Capitol St. NW on Capitol Hill since 2012. BXP owns a 30 percent stake in that building, according to Bisnow.

Lou Christopher, Jordan Brainard, Rob Copito and Clay Hammerstein of CBRE represented the tenant in the lease transaction. Evan Behr of JLL negotiated on behalf of BXP.

CBD location

Completed in 1992, the office building at 725 12th St. NW rises 12 stories in Washington’s Central Business District, three blocks east of the White House. The property is steps from Metro Center Station, the transportation hub for the city’s Metrorail service, where the Red, Orange, Blue and Silver lines converge.

In 2015, a joint venture between an affiliate of Hines Interests Limited Partnership and a pension fund advised by Sarofim Realty Advisors secured a $135 million, 10-year loan from Allianz Real Estate of America to refinance the property. At that time, the asset was the global headquarters of law firm Williams & Connolly, which has since moved to new space at The Wharf, a mixed-use project in Washington’s Southwest waterfront.

The building became vacant in 2022, following the law firm’s relocation. The same year, Hines transferred the property to the lender and continued to serve as its manager, although never formally concluding a foreclosure, Bisnow revealed.

In 2023, the joint venture of Madison Marquette and Highland Square Holdings became interested in the asset and intended to purchase it for $70 million. However, the deal never closed.

BXP recent activity

This is not the only office development project BXP is undertaking. The REIT is developing a 950,000-square-foot office building on Madison Avenue, near Manhattan’s Grand Central Terminal. The project was designed by Kohn Pederson Fox as a fully electric, zero-carbon workplace.

Last month, BXP signed a 413,000-square-foot office lease renewal with global law firm Ropes & Gray at the Prudential Tower, a 1.2 million-square-foot building in Boston. The law firm, which moved into the upper floors of the skyscraper in 2010, will remain in the space through 2041.

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Known as the Dulles Corner portfolio, the assets were acquired for significantly less than replacement cost, according to Finmarc.

The buildings are located at 2411 Dulles Corner Park, 13880 Dulles Corner Lane, 2355 Dulles Corner Blvd. and 13825 Sunrise Valley Drive. Current tenants include Peraton, SAP National Security Services, DLT Solutions, Mission Essential, Valiant Integrated Services, Synopsys and BlackSky DC.

Bethesda, Md.-based Finmarc was represented in-house while Eastdil Secured represented the undisclosed seller. Aaron Rosenfeld of Kelley Drye & Warren LLP provided legal services to Finmarc. Cliff Mendelson of Metropolis Capital Advisors assisted in the debt placement.

The firm has tapped a Cushman & Wakefield team led by Executive Director Joshua Masi to oversee leasing at the Dulles Corner portfolio. Tom Walsh, Will Thomas and Nate Marshall are also part of the leasing team.

Portfolio details

Recent capital improvements made to the assets focused on modernizing building lobbies, amenities and common area spaces. Amenities include conference facilities, a fitness center, on-site restaurant options, a daycare center and park with walking paths, water features, greenspaces and outdoor eating areas. The portfolio has more than 2,100 parking spaces.

Dulles Corner is situated at the intersection of Dulles Toll Road (Route 267) and Route 28, overlooking Dulles International Airport. It is served by the Innovation Center Metro Station on the Silver Line. The properties are also near Reston Town Center, a mixed-use development featuring apartments, stores and restaurants, and Village Center at Dulles, a shopping center with more than 300,000 square feet of retail and restaurants.

13380 Dulles Corner Lane, a four-story building with more than 150,000 square feet, is the newest of the four properties. It was completed in 1997 and underwent improvements in 2022.

The portfolio also includes:

• 2355 Dulles Corner Blvd., an eight-story building with more than 180,000 square feet, completed in 1988 and renovated in 2022.
• 2411 Dulles Corner Park, an eight-story, nearly 180,000-square-foot building that was built in 1990 and renovated in 2022.
• 13824 Sunrise Valley Drive, a two-story building with nearly 105,000 square feet of space, completed in 1989 and renovated in 2005.

Investing in DC region

The acquisition comes several months after Finmarc acquired Trinity Centre, a four-building portfolio comprising nearly 500,000 square feet in Centreville, Va., for $39.4 million. Located at 5860, 5870, 5875 and 5885 Trinity Parkway, the buildings are less than 13 miles from Dulles International Airport and about 26 miles from downtown Washington, D.C. That portfolio was 71 percent leased at the time of the sale.

Finmarc owns and manages a portfolio of commercial properties totaling nearly 8 million square feet in Washington, D.C., Maryland, Virginia, Delaware, Pennsylvania and North Carolina.

Finmarc Principal Neil Markus said in prepared remarks the firm’s acquisitions of the Dulles Corner and Trinity Centre portfolios along with its other holdings in the greater Washington, D.C., market validates its optimism about the market’s long-term prospects.

The company noted that CNBC ranked Virginia as the “top state for business” in 2024. In addition to growth by companies engaged in the aerospace, defense and high technology industries, Northern Virginia will see nearly 80 million square feet of new data center space delivered by 2030. According to Finmarc, that could lead to the creation of more than 40,000 new jobs in the region.

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Thalhimer Realty Partners has acquired Dabney Center, a 14-building flex-industrial portfolio spanning 642,384 square feet in Richmond, Va., for $75.3 million. A joint venture led by Brandywine Realty Trust sold the collection that also included an 11-acre, 502-space parking lot.

The portfolio comprises general and light industrial properties, according to Richmond Times-Dispatch. The buildings were 99 percent leased at closing, the tenant roster including Thermo Fisher Scientific, Ferguson HVAC Supply and Daltile, to name a few.

The portfolio occupies roughly 56 acres with its northmost facility near the Interstate 64 and U.S. Route 33 junction. The bulk of it is close to the interchange between interstates 195 and 95, next to a CSX railyard.

READ ALSO: Industrial Sector Settles After Supply Surge

More than three-quarters of the facilities are shallow bay industrial properties measuring less than 50,000 square feet. The portfolio’s largest building, totaling 132,548 square feet, is at 2511-23 Brittons Hill Road.

The Dabney Center deal came on the heels of another recent Brandywine disposition. Also in Virginia, the firm sold 4040 Wilson Blvd., a 405,000-square-foot mixed-use asset in Arlington, in partnership with Shooshan Co. The asset traded for $190.5 million.

Richmond industrial investment tempers

The Richmond Tidewater industrial market has witnessed an investment volume of more than $775 million throughout 2024, according to CommercialEdge data. The figure is substantially below last year’s total of roughly $1 billion.

About 8 million square feet of industrial product changed hands this year—2 million less than the amount registered in 2023—trading at roughly $96 per square foot, the same source shows. Last year’s average price clocked in at more than $99 per square foot.

One of this year’s industrial transactions closed in Glen Allen, Va. Eaton Vance Real Estate Group paid $85.4 million for Performance Food Group @ Cardinal North in April. Scannell Properties sold the 328,335-square-foot cold storage asset.

The post Brandywine JV Sells Richmond Portfolio for $75M appeared first on Commercial Property Executive.

Workbox is entering the Washington, D.C., market with a 29,000-square-foot coworking space at 1333 New Hampshire Ave. NW in Dupont Circle. The new location is scheduled to open in February of 2025. 

The office building is a 360,000-square-foot property that The Meridian Group has owned since 2018. The company bought the asset for $136.5 million from BXP Inc. (formerly Boston Properties), according to CommercialEdge data. In 2021, the building was subject to a 10-year $187.7 million loan originated by KKR & Co. Inc. 

Ongoing expansion

Completed in 1978 and renovated in 1999, the Class A property in Dupont Circle rises 12 stories and includes first-floor retail space and underground parking. Workbox will occupy an entire floor that features offices, lounges and conference rooms for as many as 40 people. One of the property’s largest tenants is American Bankers Association, which currently leases more than 80,000 square feet, the same data provider shows.

Located in the Golden Triangle Business District, the office building is directly across from the Dupont Circle Metro Station, within 1 mile of the White House and some 2 miles from Embassy Row.

The lease in D.C. marks the company’s 12th coworking location nationwide. Earlier this month, Workbox launched a flexible office space in Pittsburgh. Slated to open in January 2025 at One PPG Place Tower, this 23,000-square-foot location is the company’s first coworking space in the Steel City. Workbox will occupy the entire 31st floor within the 40-story building.

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Blue Owl Real Estate, Chirisa and PowerHouse Data Centers have received a $600 million loan for a 50 megawatt build-to-suit data center development in Northern Virginia. Newmark arranged the financing through a syndicate headed by Société Générale.

Located in the 300-plus-acre Chirisa Technology Park in Richmond, the project is preleased to hyperscale graphics processing unit provider CoreWeave. The development broke ground earlier this year and is scheduled to deliver its initial capacity in 2025.

Newmark’s Jordan Roeschlaub and Jonathan Firestone, along with Clint Frease, Nick Scribani, Ben Kroll and John Caraviello, in collaboration with Brent Mayo, secured the loan.

Newmark did not reply to Commercial Property Executive’s request seeking additional information about the property and the financing.

READ ALSO: Are Data Centers Immune to CRE Market Forces?

Blue Owl Real Estate is a leading real estate private equity platform with $27 billion in assets under management. Chirisa is a global investor active across digital infrastructure and real estate in the Americas and Europe. PowerHouse Data Centers is owned and operated by American Real Estate Partners and offers turnkey data center solutions, from site selection and acquisition through design, construction and operations.

Their $5 billion joint venture emerged just this past fall, focusing on developing large-scale AI/high-performance computing data centers on a build-to-rent basis. The Richmond development is the partnership’s first.

Tighter than tight

The data center market in Northern Virginia remains the nation’s largest, with an inventory of more than 2,600 megawatts and another 1,150 megawatts under construction in the first half of the year, according to a CBRE report. NoVa was also the second-tightest data center market in the U.S. after Hillsboro, Ore., the vacancy rate reaching 1.5 percent at the end of June.

In response to increasing concerns about power constraints, one proposed data center campus in Virginia will be sited near an existing nuclear power plant and will be accompanied by a hydrogen production facility and several small modular reactors. Green Energy Partners is developing the campus, the first of its kind in the U.S., on a 641-acre site in Surry and plans to invest $6.5 billion over the next 13 years.

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The Appomattox County Economic Development Authority and Virginia Gov. Glenn Youngkin were both on board, especially given that the campus will use substantial on-site green power.

AVAIO Digital has confirmed 300 MW of power from Central Virginia Electric Cooperative and Dominion and is cleared and ready for rapid construction.

The project is the latest addition to the company’s expanding portfolio of hyperscale facilities across the U.S. and Western Europe. AVAIO Digital has also recently launched plans to develop a 92 MW data center campus in the Bay Area. The $800 million Perseus Data Center marks the first phase of the developer’s 76-acre Pittsburg Technology Park in Pittsburg, Calif.

Hurdles ahead?

While some developers are getting deals done, others are facing pushback. This month, a proposal for a data center on Atlanta’s West Side was postponed by the Atlanta City Council after widespread pushback from the community, according to the Atlanta Journal-Constitution.

The Council recently passed a law banning data centers from being built near the Beltline and within a half mile of MARTA rail stations.

CIM Group, which in June closed on an initial $125 million loan commitment to fund the construction of Applied Digital Corp.’s high-performance computing campus in Ellendale, N.D., was able to gain permit approval permit for a fourth data center in Atlanta by submitting the project before the town council’s vote. The 10-story project will be adjacent to its existing 56 Marietta St. location. The proposed site at 10 Forsyth St. NW currently serves as a parking lot.

In South Florida, tenants have not embraced the data center development that has been delivered. Miami’s vacancy rate for instance is 16.4 percent, according to Data Center Hawk, as first reported by Bisnow. Nearly a fifth of the market’s data center space is unused, whereas in major markets like Northern Virginia, Dallas and Atlanta, vacancy is below 3 percent.

READ ALSO: Are Data Centers Immune to CRE Market Forces?

Miami lacks the key components to drive an efficient data center: a reliable, always-on power supply and controllable humidity and temperatures. Extreme weather events are another deterrent.

“Data center developers are encountering resistance from local governments and residents who view data center facilities as unsightly and power-hungry additions to their communities,” Howard Berry, principal of National Data Center Solutions, Avison Young, told Commercial Property Executive.

“In response, local governments in tier-one markets are re-examining their approval processes for data centers, potentially leading to extended wait times and increased developer scrutiny.”

Berry said that data center developers are facing significant delays in bringing their projects online. Utility electricity approval can take 12 to 18 months, and utility companies require up to 55 months to activate power.

“In some cases, speculative developments may wait up to six years before receiving power to their data centers, posing a major challenge for those looking to deploy and scale their operations quickly.”

The post AVAIO Digital to Build $3B Data Center Campus in Virginia appeared first on Commercial Property Executive.

Workbox has leased more than 23,000 square feet of office space at One PPG Place Tower in Pittsburgh. Scheduled to open in January 2025, the new coworking location will cover the building’s entire 31st floor.

Highwoods Properties has owned the PPG Place complex since 2011, when it acquired the assets from The Hillman Co., according to CommercialEdge data.

The six Class A buildings came online between 1981 and 1984. Combined, the towers have more than 1.5 million rentable square feet, covering a 5.5-acre site. Amenities include lounges, conference rooms and a tenant-only fitness center. The properties share an underground parking space with 700 spots and eight EV charging stations.

Flex office within the Golden Triangle

One PPG Place is the centerpiece of the office complex, rising 40 stories high. The tenant roster comprises Deloitte, McKinsey & Co., Willis Towers Watson, Insight Global, Morgan Stanley Financial Advisors and Steptoe & Johnson.

The tower is at 1 Third Ave., within downtown Pittsburgh’s Golden Triangle. The property is adjacent to the historic Market Square and across the street from the Red, South Hills Village and Silver light rail lines and several bus stops.

The Workbox Pittsburgh – PPG Place is the company’s first flex office in the state of Pennsylvania and its 11th location nationwide. Six offices are in Chicago, while the other four are in Dallas; Columbus, Ohio; Minneapolis and Salt Lake City.

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Prices for office space in Philadelphia continued to decrease in the second half of the year. The market’s fundamentals did not show signs of improvement, with vacancy ballooning 510 basis points over the past 12-month period ending in October, CommercialEdge data shows.

The supply pipeline remained muted, with only 1.9 million square feet under construction. Four out of the five projects underway in October were life science assets, signaling the market’s status as an up-and-coming hub for the sector.

Philadelphia’s life science sector expands

Philadelphia had 1.9 million square feet of office space under construction as of October. This amount represented 1.1 percent of the market’s existing stock—20 basis points above the national figure.

Compared to its peer markets, Philadelphia was ahead of Phoenix (0.4 percent of stock underway), Houston (0.7 percent) and Charlotte, N.C. (0.9 percent), but lagged San Diego (3.2 percent) and Nashville (3.5 percent).

The largest project underway is Parkway Corp.’s 2000 Arch St., a 550,000-square-foot building in the Logan Square neighborhood. The asset is a build-to-suit for Chubb, for which the developer obtained $409 million in credit tenant lease financing last year.

The other four developments are all life science assets. Brandywine Realty Trust and Drexel University topped out 3151 Market St. in October last year—a 435,000-square-foot building that is part of the $3.5 billion Schuylkill Yards master plan. At 3001 Chestnut St., Spark Therapeutics is constructing its future center for gene therapy manufacturing, which will include office space—also part of the same master plan.

The remaining two are a 350,000-square-foot facility under construction for Children’s Hospital of Philadelphia, set to open in 2025 and include laboratory space; and 3201 Cuthbert St., under construction by Gattuso Development Partners and Vigilant Holdings of New York. The latter is a 519,647-square-foot life science property for which the duo obtained $290 million in construction financing in late 2022.

Developers completed 932,303 square feet of office space across five buildings in Philadelphia year-to-date through October. Deliveries in the metro were down 35.4 percent year-over-year—in line with national trends—and accounted for 0.4 percent of existing stock. All completions were in the first half of the year.

Office-to-residential conversions garner interest

As a response to rising interest for office-to-residential conversions, CommercialEdge created the Conversion Feasibility Index (CFI)—powered by Yardi—which measures a building’s potential to be transformed into multifamily rental units.

The CFI score has three tiers, with Tier 1 buildings being the most likely candidates. Philadelphia had 43 assets—roughly 5.6 million square feet—that fell in the Tier 1 range, as of October. An additional 165 buildings were Tier 2, approximately 26.8 million square feet.

Among the largest of these is 1701 Market St., a 929,124-square-foot high-rise that will be converted into 299 rental apartments. Alterra Property Group secured a $70 million construction loan from Bank OZK for the project, slated for completion in Spring 2025. The property has a CFI score of 96, marking its high potential for conversion.

Gazit Horizons is redeveloping the 76,500-square-foot Art Deco building at 1618-1622 Chestnut St. The owner is planning to bring 67 units online throughout the seven floors currently occupied by office space.

Average price lags peer markets

Investors traded $316 million in assets across the metro year-to-date through October. Office space in Philadelphia continued to change hands at a below-average price per square foot, $83. Meanwhile, the U.S. figure clocked in at $177.

Philadelphia also ranked last among its peer markets when it came to the average price, below Houston ($104), Charlotte ($151), Phoenix ($164), Nashville ($193) and San Diego ($198).

The largest transaction remained Incyte’s $34.2 million purchase of the office asset at 1100 N. King St. from Capital Commercial Investments. The pharmaceutical company also bought the property at 1100 N. French St., for $13.3 million, from the same buyer.

KKR sold the 267,597-square-foot asset at 111 S. Independence Mall E for $31 million to Lubert-Adler—the second largest transaction year-to-date through October. The Bourse building was constructed in 1895 and served as the nation’s first commodities exchange market. It underwent two rounds of complete renovations—in 2012 and 2018—and now houses 20,000 square feet of retail and nine floors of office space.

Vacancy grew, but stabilized below U.S. average

Philadelphia’s overall vacancy stood at 18.9 percent as of October, below the 19.4 percent national figure. However, the metro’s rate increased by a whopping 510 basis points year-over-year, while the U.S. average was up 160 basis points.

Compared to its peer markets, Philadelphia’s vacancy stood somewhere in the middle—higher than Charlotte (16.4 percent), Nashville (17.5 percent) and Phoenix (18.4 percent), but below San Diego (20.6 percent) and Houston (24.3 percent).

Not many significant deals took shape across the market. In September, Potter Anderson & Corroon LLP renewed its 82,757-square-foot lease at 1313 N. Market St. in Wilmington, Del., which it will use as its headquarters for another 13 years. The Siegfried Group owns the 530,000-square-foot building.

Earlier in November, Rubenstein Partners signed Arcfield at its Chesterbrook Corporate Center in Wayne, Pa. The new tenant will occupy 36,000 square feet in total—the entire third floor and part of the first floor. The asset at 1400 Morris Drive is part of a 1.1 million-square-foot campus.

Philadelphia’s expanded coworking inventory

In October, Philadelphia had around 2.8 million square feet of office space dedicated to coworking. This was 1.5 percent of the market’s total inventory, 40 basis points below the national figure. Compared to its peers, Philadelphia stood at the bottom, outpaced by Phoenix (1.9 percent), Charlotte (1.9 percent), San Diego (2.1 percent) and Nashville (3.5 percent).

Despite lagging peer markets, Philadelphia’s amount of shared space locations grew considerably, up 9 percent from the second to the third quarter, according to a recent report from CoworkingCafe. This brought the total to 150 coworking locations. The metro also had a below-average median price for monthly rates for open workspaces, at $119 in September.

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Banyan Street Capital has acquired 1250 H St., a 196,490-square-foot office asset from Equity Commonwealth. The sale price was $27.5 million, public records show. Kairos Investment Management Co. originated a $28.5 million acquisition loan for the transaction.

Also known as Herald Square, the Class A building traded for less than half its 2025 assessed value of $76.2 million, the Washington Business Journal reported. At the time of the deal, the building was 90 percent occupied.

Equity Commonwealth previously purchased the property in 1998 from Gibson Dunn & Crutcher for $59 million, according to CommercialEdge data.

The buyer will also manage the property. Cushman & Wakefield’s Senior Directors Phil Dickinson and Chris Getz, together with Executive Managing Director John Benziger will handle leasing operations.

Upgrades coming to Herald Square

The new ownership plans to renovate and expand the lobby, as well as upgrade the common areas and restrooms. Upgrades will include the addition of a new conference and event space on the second floor, suitable for more than 100 people.

Completed in 1992, the LEED-certified building rises 11 floors and comprises first-floor retail, underground parking, as well as a fitness and wellness center. The tenant roster includes Land Trust Alliance, International Dairy Foods Association, Environmental Council of the States, U.S.-Mexico Foundation and BNY Mellon Wealth Management.

The office building is at the corner of 13th Street, less than half-a-mile from The White House. The Lincoln Memorial, the National Gallery of Art, and the United States Capitol are all within 2 miles of the property.

Earlier this month, Equity Commonwealth sold two other office assets in Austin, Texas, for $64.5 million: the five-building, 440,000-square-foot Bridgepoint Square and the 176,000-square-foot Capitol Tower.

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Utz Brands Inc. has officially opened Rice Distribution Center, a 650,000-square-foot logistics facility in Hanover, Pa. The development team included Conewago Enterprises as general contractor.

An entity associated with Utz received an $88.1 million note tied to Rice Distribution Center’s address in 2022, according to Adams County public records. City National Bank issued the loan.

The new building will serve as a main logistics hub for storage, consolidation and distribution for Utz’s facilities across the U.S. The warehouse is the result of the firm’s network optimization efforts.

READ ALSO: How Logistics Developers Can Surmount Inventory Hurdles

Utz’s revision aimed to simplify its existing network and enhance the relationship with co-manufacturing partners, as well as bolster its warehouse capacity. Additionally, as part of the optimization, Utz ceased operations at the Carlisle Street factory, its oldest plant in Hanover, which debuted in 1949.

The build-to-suit distribution center encompasses 73 dock doors and 375 trailer parking spaces. Estimates place the building’s operational capacity at 2.3 million pallets of product—amounting to 1.1 billion pounds—per year.

Located at 101 Kindig Lane, the property is less than 5 miles from U.S. Route 30, an east-west route connecting Oregon to New Jersey, and some 30 miles south of Interstate 81. Utz already owns nearly 900,000 square feet of industrial product, including cold storage, across three facilities on Kindig Lane, according to CommercialEdge data.

Industrial deliveries stall in the I-81/78 Corridor

The I-81/78 corridor, which includes Central and Northeastern Pennsylvania, as well as Lehigh Valley, witnessed more than 3.8 million square feet of industrial deliveries year-to-date through September, according to a report by Newmark. The figure marked the lowest volume of completions since 2013.

For the sixth consecutive quarter, the market’s industrial construction starts were under the 2 million square feet mark, clocking in at 982,000 square feet during the three-month period ending in September, the same report shows.

The decline in new construction was in part due to moderating demand—leasing activity was down 500,000 square feet quarter-over-quarter, landing at 4.5 million square feet from July to September—and the higher cost of capital that defined most of the year, according to Newmark.

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Carr Workplaces, a provider of short-term coworking and flex space, has signed a 26,331-square-foot lease with Comstock Holding Cos. in Arlington, Va. The new location is slated to open within The Hartford office building in the spring of 2025.

Comstock acquired The Hartford in 2020 for $128.8 million, with the help of an $87 million acquisition loan from Metropolitan Life Insurance Co., according to CommercialEdge information. 

Built in 2002, the Class A office building totals 211,450 square feet across nine stories. On the ground floor, the property features 20,000 square feet of retail space. The building was awarded LEED Gold certification for existing buildings operations and maintenance in 2012, followed by a recertification in April of this year. Amenities include a subterranean parking garage, bike storage, EV charging stations, a rooftop deck and a fitness center. 

The tenant roster includes Fraym, SQM Frontier Management, SIE Consulting Group, KVS Title, Inspire, Global Telesourcing and Aecom, among others.  

The Hartford is at 3101 Wilson Blvd., within Arlington’s Clarendon area. The office building is surrounded by eateries and retail options, including a Cheesecake Factory and Whole Foods Market. The property is also across the street from several bus stops, as well as the Clarendon metro station, where the Silver and Orange lines connect The Hartford to downtown Arlington in less than 1 mile and to downtown Washington, D.C. in less than 5 miles. 

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PNK Group plans to develop an 846,260-square-foot industrial facility in Colonial Heights, Va. The developer will invest nearly $80 million in the project, set to rise on a 86.6-acre site acquired last month.

The land changed hands for $12 million from Chester, Va.-based Emerson Cos., according to Chesterfield County public records.

With this development the New York-based company is entering the Virginia market through the Greater Richmond area, one of the top five cities in the Southeastern region for lowest Class A industrial vacancy. The area has grown into a regional leader and is continuing to attract logistics and manufacturing companies, such as FedEx, LEGO Manufacturing, Mondelez International or Nestle Purnia.

The facility will be at 1653 Ashton Park Drive. Developed as the first industrial project in the state designed with PNK Group’s technology, the property will be constructed using prefabricated elements, PNK Group-produced high-precision steel structural frames and other products sourced from the developer’s Georgia and Pennsylvania plants.

The development site allows for easy access in the Greater Richmond area, with interstates 95 and 295 nearby. Prince George, Va., is 16 miles away, while downtown Richmond, Va., and Richmond International Airport are within a 20 miles distance.

Big developments in the area

The Richmond metro closed the third quarter with a 30-basis-point drop in its industrial vacancy rate on a quarter-over-quarter basis, according to a recent Cushman & Wakefield report. Leasing activity in the metro amounted to 1.5 million square feet of space. Construction starts slowed, with speculative industrial projects accounting for 30.1 percent of the under-development pipeline.

Recent industrial developments in the area include Whitepine Logistics Center, a 498,000-square-foot campus in Richmond. A joint venture of Mixson Properties, Frampton Strategy Group and Singerman Real Estate recently secured $34 million in construction financing for the project.

In July, LS GreenLink USA Inc. has disclosed its plans to develop a 753,400-square-foot submarine power cable manufacturing plant in Chesapeake, Va. With construction scheduled to start next year, the $681 million project represents the largest capital investment for the city.

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TECfusions has obtained some $300 million for the development and expansion of its data center in Clarksville, Va.

The 15-year loan will fund the development’s Phase I buildout, as well as the company’s other key initiatives that include AI-ready infrastructure and sustainable power generation solutions.

The company started gathering funds for the project in January 2024. There are $160 million already allocated for construction, while the remainder will be used for the completion of the project’s Phase I.

Plans call for the development of four data halls with a combined capacity of 37.5 megawatts. The third one, dubbed C-Hall, came online in September, while the fourth one, D-Hall, is currently underway and expected to reach completion by February 2025.

The expansion of the Clarksville data center comes in response to higher capacity needs from one of its key tenants. In October, TensorWave leased 1 gigawatt of AI infrastructure capacity at the facility, marking one of the largest commitments in the sector.

READ ALSO: More Data Centers, Please!

The 22.5-acre property is at 250 Burlington Drive. TECfusions acquired the 196,000-square-foot facility with 500 kilowatts already live and immediately started upgrading it. According to the company’s website, the data center has 80 megawatts already leased and the company is looking to bring the campus to a full site capacity of 220 megawatts.

The company also recently acquired 66 acres for the expansion of the campus, that will also include some houses for people working on the development, according to Data Centre Dynamics. The same source reported that the city will provide 20,000 gallons of water and sewer per day for the project.

AI drives data center demand

AI capital expenditures in recent years amounted to more than $300 billion, with investment accelerating in 2024, according to a recent JLL Data Center Report. AI represented about 20 percent of the new data center demand in 2023 and will continue to fuel this demand going forward.

However, development is going at a faster pace than the power grid can support, especially with construction having increased in secondary markets. With vacancy levels having reached record lows, nearly all data center projects are already preleased ahead of completion, and this trend expected to continue in the next few years.

Last month, Cologix obtained significant funds to finance its upcoming data center developments. Through a mix of debt and equity, the company secured $1.5 billion for its campuses in Ashburn, Va., Columbus, Ohio, and Montréal.

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Nuveen Real Estate has purchased The Shoppes at English Village, a 103,325-square-foot retail center in North Wales, Pa. MetLife Investment Management sold the asset in a transaction brokered by CBRE.

MetLife had acquired the retail center back in 2017 from Stanbery Development for $57 million, according to CommercialEdge data. CBRE brokered that transaction as well.

The Shoppes at English Village came online in 2003 on some 13 acres. Anchored by Trader Joe’s, The Shoppes at English Village features a diverse mix of regional and national retailers such as LensCrafters, Sephora, Athleta, Sport Clips, CycleBar, Hallmark, The Good Feet Store and Talbots, among others.

The property also features 5,000 square feet of built-out restaurant space with a Montgomery County Liquor License. The lifestyle center was 95 percent leased at the time of sale.

READ ALSO: Retail’s Post-Pandemic Recovery

Located at 1460 Bethlehem Pike, the lifestyle center is in Montgomery County, a well-performing area in the suburban Philadelphia region. More than 50,400 people live within a 3-mile radius; the area has an average household income of some $190,000, according to CBRE brochure.

CBRE Executive Vice Presidents Chris Munley and Ryan Sciullo, Senior Vice President Colin Behr and Vice President Casey Benson Smith, together with Associates RJ Mirabile and Michael Pascavis, brokered the transaction on behalf of the seller. In addition, Director Adam Spengler and Vice Chair Tom Traynor secured the financing for Nuveen.

Another CBRE team recently arranged a $69.4 million construction loan for Nuveen and SJC Ventures. The partners are developing an 83,329-square-foot shopping center in Doral, Fla.

Philly sees positive net absorption first time this year

Greater Philadelphia’s retail market recorded a positive net absorption for the first time this year, according to a recent third-quarter CBRE report. Grocery-anchored and experiential retail continue to drive demand in the area, with the metro recording approximately 357,000 square feet of retail space under construction.

The market is facing limited options for quality retail space, but also experiences renewed activity due to the bankruptcies and store closures that plagued Big Lots and LL Flooring. The vacancy rate in the metro clocked in at 7.4 percent at the end of September.

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International law firm Nixon Peabody LLP has renewed its lease at 799 Ninth St. NW in Washington, D.C., extending its 43,000-square-foot commitment. Brookfield Properties owns the 10-story, 204,028-square-foot Class A building in the city’s downtown. JLL represented the landlord, while Newmark negotiated the deal for the tenant.

The law firm initially signed a 15-year lease with Brookfield for 65,000 square feet across three floors in December 2013, according to media reports at the time. The firm’s lease at 401 Ninth St. NW was expiring in 2015 and Nixon Peabody chose 799 Ninth after considering more than 20 other buildings in D.C. and Northern Virginia, the Washington Post reported. Information on when the law firm reduced its current space at the building was not available at press time.

READ ALSO: DC Office Sector Struggles to Maintain Course

Brookfield Properties acquired 799 Ninth in 2012 from AEW Capital Management for $106 million and fully renovated the property, which was built in 2001. One of the top 10 LEED-certified office buildings in Washington, D.C., the property received LEED 2009 Existing Buildings Operations & Maintenance Gold certification and Platinum certification in May 2019. In 2018, it earned the Energy Star label.

JLL’s Executive Managing Directors Doug Mueller and Evan Behr, alongside Senior Vice President Thomas Myers, represented the landlord in the lease extension signing. Executive Managing Directors Bill Anderson and Edwin Clark of Newmark worked on behalf of Nixon Peabody.

A sustainable property

Located in the East End submarket adjacent to the 2 million-square-foot mixed-use CityCenterDC development, the building is one block from three Metro lines. It is a 100 percent electric building and by the end of this year, the property will be powered by 100 percent zero-emissions electricity sourced from nuclear power plants.

These efforts are part of Brookfield Properties’ broader commitment to transition its entire U.S. office portfolio to clean electricity by 2026. The transition to zero-emissions power at 799 Ninth will completely eliminate direct carbon emissions at the property and allow tenants, including Nixon Peabody, to report zero Scope 2 emissions associated with their leased office space.

The building also includes D.C.’s first community solar project, a solar installation that was part of a green lease between Nixon Peabody and Brookfield Properties. The installation includes rooftop solar arrays, a terrace-level setup and the district’s first vertically mounted solar wall, with beehives from Brookfield’s urban beekeeping initiative. The project has evolved into New Partners Community Solar, an independent 501(c)(3) nonprofit supported by pro bono legal services from Nixon Peabody.

Tenants at 799 Ninth St. NW

In addition to its green initiatives, 799 Ninth’s amenities include a fitness center, rooftop terrace, EV chargers and bike storage. The property has 10,563 square feet of ground-floor retail space including eateries Boqueria, Poke Papa and Five Guys. The building also has 156 parking spaces in a subterranean garage.

The office property has 21,900-square-foot floorplates. Other tenants include the U.S. Department of Treasury, WorkChew, BDO, Spencer Stuart, American Investment Council, American Gaming Association and another global law firm, Norton Rose Fulbright, according to CommercialEdge.

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Brandywine Realty Trust has signed a 119,000-square-foot lease at 250 Radnor, a life science and office building in Radnor, Pa., a Philadelphia suburb. The tenant is a global industrial solutions company.

The 168,000-square-foot property is the adaptive reuse of a former medical office building. The facility, designed to fully accommodate lab tenants such as West Pharmaceutical, Quanta Therapeutics and Penn Medicine, is now fully leased.

Design firm NORR oversaw the repositioning project that was completed in 2022. Building additions comprised a coffee bar and lounge, a redesigned lobby and multiple healthy building practices.

READ ALSO: How AI Firms Are Reviving Office Space Demand

Brandywine Realty Trust acquired the asset in January 2021 from Penn Medicine, according to CommercialEdge information. The company paid $20.3 million—or $81 per square foot.

The four-story facility originally came online in 1989. The mid-rise features floorplates averaging 25,370 square feet and 250 parking spaces. Located at 250 King of Prussia Road, the building is about 18 miles from downtown Philadelphia and 21 miles from the city’s international airport.

The property is also part of the Radnor Life Science Center, a 26.6-acre complex consisting of four Class A life science buildings totaling nearly 1 million square feet. Brandywine recently completed 155 Radnor, a 145,000-square-foot office building that is already fully leased to Arkema S.A., a global supplier of specialty materials.

Philly vacancy rates on the rise

Metro Philadelphia’s office vacancy rate at the end of September clocked in at 17.8 percent, up 380 basis points year-over-year, but below the 19.5 percent national figure, according to a CommercialEdge report. The market fared better than New Jersey (20.2 percent), while Boston (16.4 percent) and Manhattan (16.8 percent) had less vacant space.

Earlier this fall, law firm Potter Anderson & Corroon LLP renewed its headquarters commitment at 1313 N. Market St., a 530,000-square-foot property in Wilmington, Del. The company will occupy the 82,757-square-foot office space for another 13 years.

And, more recently, Arcfield committed to 36,000 square feet at Rubenstein Partners’ Chesterbrook Corporate Center, a 14-building office campus spanning 1.1 million square feet, also in Wayne, Pa. The company is the first to take space at the recently upgraded property, located some 9 miles northwest of 250 Radnor.

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Rubenstein Partners has added Arcfield as a tenant at Chesterbrook Corporate Center, a 14-building office campus totaling 1.1 million square feet in Wayne, Pa.

The government technology and mission support provider signed a 36,000-square-foot, long-term lease and will occupy the entire third floor and a part of the first floor at 1400 Morris Drive. The four-story building encompasses some 239,600 square feet.

The company is the first tenant to take space at the recently upgraded property. The deal also represents Arcfield’s first office move in the Philadelphia area in decades.

JLL worked on behalf of the landlord, while Cushman & Wakefield represented Arcfield. Other notable tenants at Chesterbrook Corporate Center include Aclaris Therapeutics, The Higgins Group Inc. and Navigate Corp., among others, according to CommercialEdge.

An upgraded Philly-area office complex

Rubenstein Partners picked up Chesterbrook Corporate Center in 2019. Pitcairn Properties sold the asset for $147 million, according to the same source.

The owner completed a series of capital improvements at the entire office complex. Upgrades included the construction of The Circuit, a two-story, 41,331-square-foot amenity center that also features 20,000 square feet of coworking space, as well as the addition of as touchless technology and HVAC improvements. The office buildings underwent interior and exterior renovations as well.

Completed in 1982, the property at 1400 Morris Drive has four passenger elevators, 29,700-square-foot floorplates and 1,088 vehicle parking spots. Upgrades feature new curtain glass walls at the front and rear entrances and an expanded first-floor lobby, among others.

The 140-acre campus is just north of U.S. Route 202 and close to Interstate 76. The location is 22 miles of downtown Philadelphia and 29 miles from Philadelphia International Airport.

Office vacancies on the rise in Philly

JLL’s team of Executive Vice Presidents Doug Newbert and Mike MacCrory, together with Senior Vice President Whitney Hunter, assisted the landlord during negotiations. Senior Director John Shelly and Director Gina Brennan with Cushman & Wakefield represented the tenant.

The deal closed at a time of consistent leasing momentum for Chesterbrook Corporate Center. The property has seen approximately 100,000 square feet of new leases and renewals closed over the past months.

However, the metro witnessed a rise in office vacancies. The rate clocked in at 17.8 percent as of September, up 380 basis points over the year, according to a recent CommercialEdge report. Nonetheless, the index remained below the national average of 19.5 percent.

In September, JLL brokered a 82,757-square-foot renewal in Wilmington, Del. Law firm Potter Anderson & Coroon LLP signed a 13-year deal to keep its headquarters at a 530,000-square-foot office building owned by Siegfried Group.

And, in early 2024, Dow signed a 800,000-square-foot extension at a 1.9 million-square-foot campus in Collegeville, Pa. Newmark represented the tenant.

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Washington, D.C.’s office sector ended the third quarter without much improvement across fundamentals when compared to last year, the latest CommercialEdge data reveals. Although it ranked second for investment volume nationwide, with $2.3 billion trading through September, the third quarter was the slowest.

Some of these office sales are tied to owners seeking to reduce their exposure to the asset, as vacancy continued to climb over the past 12 months, while property values dropped. As a result, a growing share of office owners are considering converting their properties into housing or other uses, looking to ease the pressure of rising vacancy rates and maintenance costs.

Developers focus on high-quality assets

Washington, D.C., developers had 1.8 million square feet of office space under construction in September. Activity diminished through the third quarter—this amount of space was a 0.5 percent expansion of the market’s total inventory and half of the national rate. Adding planned and prospective projects in the mix brings the pipeline to 3.3 percent of stock.

Compared to its peer gateway markets, the metro’s office sector was near the bottom of the list for construction as a share of total inventory. It lagged Manhattan (0.6 percent), Los Angeles (0.9 percent), San Francisco (2.9 percent) and Boston (4.6 percent), but was ahead of Chicago (0.3 percent).

Developers are opting for high-quality assets, as all but one of the properties under construction were either A or A+. As Janet Pogue McLaurin, global director for workplace research at Gensler, noted in this in-depth article on office design trends, today’s workspaces tend to be more inviting, comfortable and people-focused—which more often than not translates to high-quality assets.

Case in point, one of the largest office properties to come online in metro D.C. this year was Skanska’s 3901 Fairfax Drive. Arcadia Inc. designed the 201,000-square-foot building to feature floor-to-ceiling windows and 4,000 square feet of terraces.

Overall, Washington, D.C., added a total of 1.6 million square feet of new office space in the first three quarters this year, across nine properties. Deliveries were down 62.1 percent when compared to the same period last year. Only two properties broke ground this year through September, amounting to 577,000 square feet.

Conversions ease pressure off market’s former Federal stock

Considering the rise of interest in office redevelopments, CommercialEdge has created the Conversion Feasibility Index. Powered by Yardi, this tool provides property-level scores assessing the potential for residential conversions of office buildings. Washington, D.C., currently has 72 office properties that have a score between 90 and 100, placing them in the top tier for a potential conversion.

Precedents have already been established, with the opening of Elle, a 163-unit residential community at 1111 20th St. NW, a former Peace Corps building that was converted to multifamily earlier this year. Willco owns the 1965-built asset that also features a retail component. The asset’s CFI score stood at a very solid 93 points pre-conversion, making it a Tier I candidate, according to CommercialEdge data.

Elsewhere, another former federal building is in the process of conversion, at 300 12th St. NW. Located near the National Mall, the adaptive reuse project will add 564 rental units with a low-income housing component. Based on the property characteristics, the asset was a strong candidate for conversion, with CommercialEdge’s CFI score at 91 points, also making it a Tier I property.

Investments double, but property values continue to drop

In the first three quarters of the year, investors traded a total of $2.3 billion across 80 D.C. office assets. The transaction volume nearly doubled year-over-year, with the metro ranking second nationwide for total investment. Manhattan took the lead with $2.7 billion in sales.

Assets in metro D.C. sold for an average of $235 per square foot, which was nearly 40 percent more than the national figure. Among other gateway markets, Washington, D.C., stood in the middle, with Boston ($159) and Chicago ($94) assets trading for less, while San Francisco ($268), Los Angeles ($320) and Manhattan ($379) properties remained pricier on average.

MRP Realty closed on one of the largest transactions this year. It purchased the 297,002-square-foot building at 616 H St. NW in the CBD for $225 million, or $983 per square foot. However, this transaction underlined the overall trend for D.C. office sector transactions—the asset traded for roughly 30 percent less than its previous sale in 2014.

Another significant deal that mirrored this trend was Finmarc Management’s acquisition of Trinity Centre in Centreville, Va., for $39.4 million from Spear Street Capital LLC and Partners Group. The 500,000-square-foot four-building property changed hands for roughly one-third of its previous sale price.

Vacancy grows amid few deals taking shape

Vacancy across metro D.C.’s office sector increased 180 basis points year-over-year, to 17.4 percent as of September. However, the metro remained 180 basis points below the national figure, as well as below two of its peer gateway markets—Chicago (19 percent) and San Francisco (27.6 percent). Meanwhile, Manhattan (16.8 percent), Boston (16.4 percent) and Los Angeles (16.3 percent) fared better.

One of the largest leases in the second half of the year was a downsizing deal. Fannie Mae signed a new, long-term agreement for 340,000 square feet in downtown D.C. The government-sponsored enterprise will downsize from its previous, 713,500-square-foot commitment at Carr Properties’ and IGIS Asset Management’s Midtown Center.

A few other deals closed, such as Commerz Real AG’s full-floor lease at 1900 N St. NW; KIPP DC’s commitment for 16,000 square feet at Signal House; and BGR Group’s 40,000-square-foot agreement with Mitsui Fudosan at the Homer Building.

Washington remains the most affordable shared space market

Washington, D.C., had some 6.4 million square feet of shared office space across 266 locations as of September. This was 1.6 percent of the total leasable office stock, 60 basis points less than the national figure.

Compared to its peer markets, Washington, D.C., had overall a smaller coworking sector as a share of total office inventory. Chicago (2.0 percent), San Francisco (2.1 percent), Los Angeles (2.2 percent) and Manhattan (2.2 percent) all had a larger shared office component.

The nation’s capital was the most affordable market for shared space, with rates as low as $80 per month, according to CoworkingCafe. At the other end of that spectrum, New Jersey and Chicago were the most expensive, with average rates at $210 and $205, respectively.

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The Center for International Private Enterprise has inked a deal to occupy 20,375 square feet for 15 years at Franklin Tower, a 226,530-square-foot office property in downtown Washington, D.C. BlackRock owns the building, CommercialEdge data shows. Transwestern Real Estate Services and CBRE represented the tenant and landlord, respectively.

Dating back to 1967, Franklin Tower had served as the U.S. Drug Enforcement Administration’s headquarters until 1991. BlackRock paid $183.9 million for the tower in 2015, acquiring it from Shorenstein, the same source reveals.

Rising 12 stories, the office property features 19,500-square-foot floorplates. Amenities consist of a rooftop deck and bike racks, as well as a parking garage. A recent renovation effort added a new conference center, lounge, gym and first-floor retail featuring HSBC. The LEED-Gold certified building’s tenant roster includes Mastercard, Anheuser-Busch Cos. and Polsinelli PC, among others.

READ ALSO: Will CRE Market Conditions Improve?

Carrying the address 1401 I St. NW, Franklin Tower is part of Washington’s central business district. Three of CIPE’s major partner organizations can be found within two blocks of the office tower, according to prepared remarks by Transwestern Executive Vice President Eric West.

Transwestern Executive Vice Presidents Ganon Rich and West represented CIPE in the leasing negotiations while CBRE Executive Vice President Mark Klub spearheaded the proceedings on behalf of BlackRock.

Relocating inside downtown D.C.

Founded by President Reagan in 1983, CIPE is an affiliate of the U.S. Chamber of Commerce. The institution works to support democracy and to strengthen the private sector through anti-corruption endeavors, entrepreneurship training and local business assistance, among others.

CIPE will relocate its headquarters to the Franklin Tower from 1211 Connecticut Ave. NW, a 129,298-square-foot office building located more than a mile away. The RMR Group owns the latter, according to CommercialEdge data.

The relocation allows CIPE to boost its organizational effectiveness by occupying one floor and reducing its annual office space expenditures by more than 30 percent, Rich said in prepared statements.

D.C. office vacancy rises as tenants downsize

For the first time in five consecutive quarters, new Washington, D.C., office leasing outpaced renewal activity at the end of September, according to a report by Cushman & Wakefield. During the third quarter, new office deals amounted to 1.2 million square feet, significantly above renewals which clocked in at 550,000 square feet.

D.C.’s overall office vacancy rate rose 20 basis points quarter-over-quarter as of September, climbing to 21.9 percent, Cushman & Wakefield reveals. However, a discrepancy between asset types is apparent with the prime office space in Class A buildings bearing 18.6 percent in vacancy, while Class B properties posted a 26.8 percent rate.

One notable occurrence is the influx of tenant downsizing—eight of the top 10 office leasing deals closed during the third quarter were contractions with the average tenant reducing its footprint by 81,672 square feet—the report mentions.

Fannie Mae’s new 340,000-square-foot lease at Carr Properties and IGIS Asset Management’s 867,000-square-foot Midtown Center is one such example. The government-sponsored enterprise currently occupies 713,500 square feet at the building and exercised an early-out clause to vacate the space by May 2029.

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A joint venture of Mixson Properties, Frampton Strategy Group and Singerman Real Estate has secured $34 million in construction financing for the development of Whitepine Logistics Center, a 498,000-square-foot industrial campus in Richmond, Va.

JLL worked on behalf of the joint venture to secure the note through Texas Capital and will also handle leasing efforts. Other project partners include architecture firm McMillian Pazdan Smith. Construction is set to begin this November, with completion scheduled for early 2026.

The three-building development will feature front-park, rear-load configurations with 32-foot clear heights, designed to accommodate multiple tenants. The 210,600-square-foot Building 1 will have 40 dock-high loading doors with levelers, two drive-in doors, 60 trailer stalls and 185-foot truck courts.

READ ALSO: Top 5 Markets for Industrial Deliveries

Building 2 will measure about 90,720 square feet and feature 18 dock loading doors and 135-foot truck courts, while Building 3 will span 196,560 square feet and feature 37 dock doors and 142 car parking spaces.

Located at 8800 Whitepine Road, the campus will be close to Chesterfield County Airport. Downtown Richmond is some 17 miles away, while the Richmond International Airport is within 18 miles.

JLL Debt Advisory Managing Director Taylor Allison, Senior Director Reina Abboud and Analyst Jovi Rodriguez led the team brokering the deal. JLL’s local Richmond team comprising Managing Directors Muscoe Garnett and Jake Servinsky, along with Senior Vice President Adam Lawson, will spearhead the leasing efforts for the project.

Richmond’s steady industrial sector

The Richmond market saw a 30-basis-point decrease in its industrial vacancy rate from the second to the third quarter of this year, according to a Cushman & Wakefield report. The metro was slow in construction starts, with speculative projects accounting for 30.1 percent of the active pipeline. A total of 1.7 million square feet were absorbed year-to-date as of September.

Earlier this year, LEGO Group broke ground on Meadowville Technology Park, a 1.7 million-square-foot industrial building, according to the same source. The facility is rising on about 340 acres in Chester, Va.

The post Singerman JV Lands $34M for Richmond Industrial Campus appeared first on Commercial Property Executive.

Chase Properties has purchased two retail assets totaling 350,810 square feet. The acquisitions include a 180,000-square-foot shopping center in Ithaca, N.Y., and a 170,810-square-foot retail hub in Waynesboro, Va.

The purchases align with the company’s approach of owning retail assets in secondary and tertiary markets, said in prepared remarks Andrew Kline, the co-CEO of Chase Properties.

Dubbed Creekside Plaza, the New York retail center came online in 2001 and was 95 percent leased at the time of sale. Anchor tenants at the property include Barnes & Noble, Dick’s Sporting Goods and O’Reilly Auto Parts.

Located at 614-722 S. Meadow St., the property is 1 mile from downtown Ithaca while Syracuse, N.Y., is roughly 57 miles northeast. There are more than 50,000 residents across upward of 19,200 households within a 3-mile radius.

READ ALSO: Retail Owners Gain Leverage

Completed in 2007, Waynesboro Town Center was 98 percent leased at the time of closing. PetSmart, Ross Dress for Less, Burlington and Michaels are part of the tenant roster. Target and Kohl’s shadow anchor the property.

Carrying the address 821 Town Center Drive, the retail hub is some 4 miles from downtown Waynesboro and about 98 miles northwest of Richmond, Va. North of 20,000 residents across more than 8,200 households may be found within 3 miles.

Open-air retail keeps investors engaged

The flight-to-quality in retail will persist as people turn to urban live, work & play centers, according to a Cushman & Wakefield report. However, suburban open-air shopping centers have garnered—and will continue to do so—the attention of investors.

Rent growth remained moderate in the third quarter, as the national figure registered a 3.4 percent increase over a 12-month period, according to the report. The vacancy rate stood a 5.4 percent, a historic low for the retail sector.

Last month, Sterling Organization purchased a 994,000-square-foot shopping center portfolio for $180.5 million. SITE Centers disposed of the three open-air assets located throughout Atlanta, Washington, D.C., and metro San Antonio.

The post Chase Properties Expands Retail Portfolio appeared first on Commercial Property Executive.

MilliporeSigma, a Merck KGaA, Darmstadt, Germany unit, has opened its new $317.2 million biosafety testing facility in Rockville, Md. Developed by Alexandria Real Estate, the 260,000-square-foot project represents the life science company’s largest investment in contract testing in history.

The property will house biosafety testing, analytical development and cell banking manufacturing services, consolidating labs in four separate buildings into one facility. The move is expected to increase collaboration between scientists and enable higher automation and digitalization.

READ ALSO: Life Science Sector Faces Challenges, Yet Recovery Is in Sight

Biosafety testing and analytical development are crucial in drug development and commercialization for traditional and novel modalities. Global demand for these services is growing at a double-digit rate, according to MilliporeSigma, which represents the U.S. and Canada life science business of Merck KGaA, Darmstadt, Germany.

A major biopharma hub

Rockville is in Montgomery County, Md., which anchors the third-largest biopharma hub in the U.S. More than 350 life science companies, including Amgen, AstraZeneca and Novavax, specialize in gene and cell therapies, vaccines, pharmaceuticals and manufacturing there.

Montgomery County was the first in the nation to have a local biotechnology investment incentive program.

Alexandria Real Estate, which has the Alexandria Life Science and Translational Research Center in Rockville, has recently been active in the life science sector. In late June, it leased 127,300 square feet at 10075 Barnes Canyon Road (Building C), a 253,000-square-foot life science building currently underway in San Diego.

Upon completion in 2025, a top 20 pharmaceutical company will use the space as an R&D facility, upping its San Diego footprint by more than 50 percent. The project is part of SD Tech by Alexandria Mega Campus, situated in the city’s Sorrento Mesa submarket.

Lab space oversupply?

Demand for lab space has surged following the pandemic, driven by breakthroughs in mRNA and CRISPR technologies. Developers have responded, bringing millions of square feet of life science space to the market.

According to the latest CommercialEdge report however, some areas are experiencing an oversupply of lab space. In 2022, life science properties traded for a combined $6.2 billion. In 2023, sales dropped to $1.8 billion. Despite the slowdown in demand for this type of assets, the life science real estate market is expected to remain strong, as most lab work requires physical spaces, unaffected by remote work trends.

The post MilliporeSigma Opens $317M Life Science Facility in DC Area appeared first on Commercial Property Executive.

The transaction, arranged by Avison Young, was a long-term renewal lease of 189,000 square feet and a new lease for an additional 57,000 square feet for a total of 246,000 square feet.

With the expansion, Alarm.com, a technology company specializing in property security, will be the sole tenant of the building at 8281 Greensboro Drive. The firm’s latest expansion marks a 300 percent increase in office space since its initial 82,000-square-foot lease signed in 2014.

Founded in 2000, Alarm.com has grown into a global leader in property security space while pioneering cloud, IoT and AI technologies at its Northern Virginia location. The company now employs more than 2,000 people in North America and around the globe.

READ ALSO: Here’s a Surprising Shift in Remote Work’s Appeal

In February 2022, Alarm.com expanded its research and development division at the Tysons office with the addition of 180 jobs. That expansion was made possible through the Virginia Jobs Investment program, a state-funded service providing consultative services and funding to companies creating new jobs supporting employee recruitment and training. At that time, Alarm.com had about 700 employees at 8281 Greensboro Drive. The new lease will also enable Alarm.com to expand its research and development program there.

Alarm.com was represented by Bill Evans, principal at Avison Young’s Tysons office. Terry Reiley, a CBRE executive vice president, represented The Meridian Group.

‘Intricate deal’

Evans, who has worked with Alarm.com since its inception, said the transaction “wasn’t your typical real estate deal.”

“This was an intricate deal because there were several moving parts that we had to navigate during an unstable interest rate environment,” Evans told Commercial Property Executive. “Alarm.com was transitioning from being one of TMG’s five tenants in the building to being a single-tenant full-building user, which necessitated a large Tenant Improvement Package.”

Evans said that required terminations and accommodations to be made for existing tenants elsewhere in the five-building complex.

“In the end, all parties were able to collaborate and negotiate an old school deal that was a win-win for Alarm.com, TMG and the Tysons Boro submarket,” Evans concluded.

In addition to Alarm.com and TMG, the team included Starwood Capital and took two years to craft a solution.

Defying market trends

Evans noted Alarm.com’s expansion comes at a time when many companies in Northern Virginia are scaling back their office space. Avison Young data shows 62 percent of Northern Virginia tenants have downsized their office space by an average of 39 percent since 2020.

According to a company statement, Alarm.com has tested various collaboration models over the past few years and concluded they are at their best when their teams are working together in person most of the time.

Steve Trundle, Alarm.com CEO, noted in prepared remarks that the company was pleased by the support from Gov. Glenn Youngkin’s office and the Commonwealth of Virginia on a number of its initiatives including apprenticeship programs. Trundle said that also played a role in the firm’s decision to work with its real estate partners to renew its commitment to the Tysons location as the company continues to grow.

The post The Meridian Group Lands HQ Deal at NoVa Campus appeared first on Commercial Property Executive.

Anchor Health Properties and Bayhealth Medical Center have completed Bayhealth at Blue Hen, an 80,000-square-foot redevelopment in Dover, Del.

Bayhealth announced the project back in 2021 and planned to begin redevelopment in 2022. The health-care provider had acquired a portion of Blue Hen Corporate Center in order to expand its medical services already provided at the property.

Prior to its redevelopment, the property served as an enclosed shopping mall, which was converted into office space in the 1990s.

Experts are predicting more conversion projects in the medical office sector, according to a Marcus & Millichap report. Office and retail properties are being redeveloped into outpatient properties, given inflation for material and labor costs.

Redevelopment process details

Anchor Health Properties provided services such as identification and acquisition of the site, planning, programming, and oversight of the design and construction of the facility. Becker Morgan Group provided architecture and civil engineering services, The Whiting-Turner Contracting Company served as general contractor and Furlow Associates provided MEP engineering services.

The first phase opened in June and featured primary and specialty practices. The second and final phase opened last month and is dedicated to outpatient rehabilitation. The clinic offers medical services such as endocrinology, primary care, pulmonology, neurology, gastroenterology and speech therapy, among others. The building also includes a 20,000-square-foot conference center.

Bayhealth at Blue Hen is at 665 S. Bay Road, between U.S. routes 1 and 13 and less than 2 miles from downtown Dover. Medical providers in the surrounding area include Family Medical Center, Renal Care Center and Eden Hill Medical Center.

The post Anchor, Bayhealth Open Delaware MOB appeared first on Commercial Property Executive.

ArentFox Schiff has signed an office lease for roughly 120,000 square feet at Carr Properties’ Midtown Center, an 867,000-square-foot trophy office property in Washington, D.C. Savills led the negotiations on behalf of the tenant while the landlord had in-house representation.

The law firm will relocate its headquarters starting in early 2028 and will occupy three full floors. Architectural firm Gensler will handle the design of the new space.

In August, Fannie Mae signed a long-term lease for 340,000 square feet at Midtown Center, less than half of the initial agreement of the 713,500 square feet inked in 2018. ArentFox Schiff will occupy the space previously used by the mortgage association, Washington Business Journal reported.

ArentFox Schiff is the result of the merger between Arent Fox and Schiff Hardin in 2022. The legal company’s current head office is at Chesapeake Management’s 1717 K St. NW, a 379,000-square-foot building also located in D.C. In 2013, Arent Fox—prior to the merger—agreed to occupy two-thirds of the property.

Inside the DC office asset

Midtown Center came online in 2017, as Carr Properties took out a construction loan of $525 million issued by Wells Fargo Bank a year prior, CommercialEdge data shows. In 2019, the asset became subject to a $525 million, 3.08 percent fixed-rate, CMBS loan with Wilmington Trust as lender and Wells Fargo Bank as master servicer, according to the same source. The note is set to mature in 2033.

SHoP Architects and WDG Architecture designed the 14-story, two-tower property, which has LEED Gold certification. The building duo is interconnected by three pedestrian bridges extending 100 feet across the 45,000-square-foot retail plaza below. The high-rise features 75,500-square-foot floorplates and 16 passenger elevators.

Midtown Center includes a gym, yoga room, bike room and rooftop terrace. Additionally, Carr Properties plans to expand the amenity package with a new conference center and a penthouse on the 14th floor of the West Tower.

Carrying the address 1100 15th St. NW, the office property rose on the site of The Washington Post’s former headquarters.

Savills Vice Chairmen Arthur Greenberg and Thomas Fulcher, alongside Managing Director Adam Brecher, led the leasing negotiations on behalf of ArentFox Schiff. Carr Properties Senior Vice President Kaitlyn Rausse provided self-representation for the landlord.

Trophy office buildings outclassing peers in DC

Flight-to-quality intensifies in Washington, D.C., as vacancy in the prime office space of trophy assets clocked in at 12.1 percent in September, according to a third-quarter report by Avison Young. Meanwhile, regular Class A, as well as B and C peers, continue to underperform, with availability rates converging toward the 20 percent mark.

Back in August, another deal closed in D.C. at one of Carr Properties’ assets. KIPP DC, a public school system, inked a lease for 16,000 square feet at Signal House, a 10-story, Class A office property.

The post Carr Properties Lands 120 KSF Tenant at DC Trophy Asset appeared first on Commercial Property Executive.

Lovett Industrial has broken ground on Highway 1 Commerce Center, a 176,105-square-foot speculative development in Philadelphia focused on the need for Class A last-mile space near major highways.

A Cushman & Wakefield Debt and Equity team led by Vice Chairman John Alascio helped secure construction financing for this project, a $22.6 million loan from First Citizens Bank.

Having BSI Construction as general contractor, the warehouse is slated for delivery by the third quarter of 2025.

READ ALSO: Top 5 Markets for Industrial Deliveries

Lovett acquired the land for Highway 1 Commerce Center in November 2023. The 14.5-acre site at 11301 E. Roosevelt Blvd. has direct access to downtown Philadelphia and the broader market via Highway 1 and Pennsylvania Turnpike, as well as quick access to Interstate 95.

Upon completion, the warehouse will feature a 280-foot building depth, 36-foot clear height, 28 dock doors, two drive-ins, 131 car parks and 25 trailer parks. The industrial facility will be aimed at a wide range of tenants seeking space from 75,000 to 176,105 square feet. Cushman & Wakefield Executive Managing Director Jonas Skovdal and Director Chris Butera spearhead the marketing and leasing efforts at the property.

“There is significant demand for well-located industrial space with both quick access to major arterials for regional users as well as easy access to the Philadelphia metro for local-serving users. There has been a lack of new construction in these infill locations due to the scarcity of available land, which has led to this outsized demand for small infill product. We are excited to be able to add some much-needed Class A supply to this market,” Ben Swift, Lovett’s Northeast U.S. market leader told Commercial Property Executive.

“One of the great things about the Philadelphia market is the wide variety of tenants who serve the local metro area and are in need of space. These include various types of light manufacturing and assembly, local and regional distributors, and many others,” Swift said.

Strong tenant demand for Philly industrial spaces

Cushman & Wakefield’s second quarter 2024 industrial report for the market stated tenant demand has been strong since the beginning of the year. Some 4.1 million square feet were leased up through the first half of the year, up 39.4 percent on a year-to-date basis.

The report noted the surge came from a 168.7 percent increase in Southern New Jersey’s leasing volume, making up 85.2 percent of the Philadelphia’s total market, similar to trends seen during the pandemic.

Seven new transactions greater than or equal to 100,000 square feet closed during Q2. The average overall vacancy rate for the market rose by 90 basis points to 9.2 percent quarter-over-quarter, primarily driven by upticks in Delaware and Salem counties.

Asking rents in the Philadelphia region are expected to see moderated growth or potential stabilization, according to the report. Vacancy rate increases are to taper off as new deliveries slow and construction starts remain tempered. Cushman & Wakefield anticipates users in the market will continue to seek out premium space and greater Philadelphia will remain a top-tier market for industrial investment.

Lovett U.S. activity

Founded in 2020, Lovett Industrial is active in more than 15 markets across the nation. The firm’s industrial portfolio comprises approximately 16 million square feet of completed, acquired and under-construction warehouses and more than 10 million square feet of facilities planned for future development.

In July, Lovett secured entitlements to develop Schaefer Logistics Center, a 298,000-square-foot industrial project in Chino, Calif., within the Inland Empire West submarket. The company had acquired the development site for $40 million last year, according to public records. Completion is expected by the end of next year.

Also this summer, Lovett completed construction of Broadway Logistics Center, a 201,329-square-foot Class A rear-load industrial building in Denver. The firm had broken ground on the speculative project in 2022.

The post Lovett Breaks Ground on Philly Last-Mile Project appeared first on Commercial Property Executive.

The acquisition brought the West Palm Beach-based private equity firm’s portfolio to more than 13 million square feet across 75 properties.

The deal is the second of 2024 for this buyer and seller. In a $42 million deal that closed in January, Sterling acquired SITE’s Marketplace at Highland Village, a 205,926-square-foot retail center located in the Dallas suburb of Highland Village, Texas.

Sterling’s current purchase drew on funds from Sterling Value Add Partners IV LP, an investment vehicle that includes $600 million of equity. SVAP IV, which closed in June, was oversubscribed by $100 million. Investors range from family offices and endowments to pension plans.  

Sterling’s scoop-ups

The largest property in Sterling’s newly acquired portfolio is Village at Stone Oak, a 476,371-square-foot power center in San Antonio. The property is anchored by a mix of clothing and pet accessory retailers, including HomeGoods, Ross, Petco, DSW and ULTA Beauty. An adjacent Super Target is a shadow anchor. Fronting U.S. Route 281, the property is 16 miles north of downtown San Antonio and within a 5-mile radius of 170,000 residents.

READ ALSO: FTI Experts’ Hub: To Buy or to Lease? That Is the Question

The second-largest property is Presidential Commons, a 264,271-square-foot grocery-anchored center in Snellville, Ga., an eastern suburb of Atlanta. According to CommercialEdge information, SITE purchased it in 2007. Anchored by Kroger and located at 1630 Scenic Highway North, the property also has Burlington, Five Below and Aaron’s on its roster. A population of approximately 193,000 is within 5 miles of its location.

Fairfax Towne Center is the smallest of the bunch, a 253,392-square-foot property located roughly 18 miles outside of Washington D.C., in Fairfax, Va. CommercialEdge data shows that SITE bought the asset for $60.2 million in 2021. Safeway is the grocery anchor, and the retail center also features a T.J. Maxx and a Regal Cinemas.

SITE’s sales binge

The $180.5 million portfolio deal with Sterling is the latest in SITE’s dispositions of open-air retail properties. Since the beginning of the third quarter, the REIT has sold 13 properties for a combined $714.3 million, according to Yahoo Finance.

Just this week, SITE sold Cypress Trace, a 280,000-square-foot grocery-anchored asset in Fort Myers, Fla., for more than $40 million. And in August, the REIT made another seven-figure-square-foot disposition, when it sold a three-property portfolio to CTO Realty Growth for $137.5 million.

The post Sterling Organization Buys 1 MSF Retail Portfolio appeared first on Commercial Property Executive.

A joint venture between Hanover Co. and multiple institutional investors advised by Northwestern Mutual Real Estate has broken ground on Frederick Airport Park, a 118-acre, 1.7 million-square-foot campus in Frederick, Md.

Development partners include architecture firm MGMA and civil engineer Harris Smariga, as well as general contractor Conewago.

Cushman & Wakefield will market the project to potential tenants, while CBRE assisted Hanover in finding capital partners. Northwestern provided a $46.1 million, 5-year loan, according to public records.

READ ALSO: Top 5 Markets for Industrial Deliveries

As a first phase, the team will develop two buildings on a speculative basis, expected to total about 508,000 square feet. The first facility is projected to come online in the third quarter of next year. Additionally, each of the two light industrial developments within the first phase will measure more than 250,000 square feet in a front-park, rear-load configuration.

These facilities are taking shape at 1620 and 1640 Bowmans Farm Road, providing easy access to Interstate 70. Downtown Frederick is about 2 miles away, while downtown Baltimore is some 48 miles southeast. The Ronald Reagan Washington National Airport is within 52 miles.

Cushman & Wakefield Executive Managing Directors Peter Rosan and McLane Fisher are in charge of leasing the project. CBRE Executive Vice Presidents Bo Cashman and Jonathan Beard worked on behalf of Hanover to find capital partners.

A need for light industrial space

Built on a speculative basis, the project will benefit from an increased demand for light industrial space. According to a recent study by BKM Capital Partners, the subsector is resilient even in a slower economy.

Besides Hanover Co.’s new project, Baltimore’s Frederick submarket had two additional industrial assets underway. They are both being developed by St. John Properties, CommercialEdge data shows. Each of the two adjacent projects, taking shape at 4734 and 4744 Arcadia Drive, measures 60,240 square feet.

Baltimore’s industrial supply pipeline included 2.8 million square feet under construction, representing a 1.3 percent expansion of existing stock, 60 basis points below the national rate, the most recent CommercialEdge report shows.

The post Hanover, Northwestern Mutual Kick Off 1.7 MSF Maryland Campus appeared first on Commercial Property Executive.

PCCP has acquired Hamburg Logistics Center, a 518,140-square-foot warehouse and distribution facility in Hamburg, Pa., a Philadelphia submarket.

The company paid $57.5 million for the asset and took out a $46.4 million loan from Heitman Capital Management, with a maturity date set for 2027, according to public records.

A joint venture between Transwestern Development Co. and QuadReal Property Group sold the facility. JLL Capital Markets brokered the deal on behalf of the seller and arranged the acquisition financing.

The cross-dock facility came online in 2021 and was vacant at the time of sale. The building has 40-foot clear heights, 100 dock-high loading doors, four drive-in doors, 294 car parking spaces, 126 trailer stalls and 185-foot truck courts. The Class A warehouse also has 60-foot speed bays and about 2,740 square feet of office space.

READ ALSO: Top Mid-Atlantic Markets for Industrial Transactions

Located at 3501 Mountain Road, the 64-acre property provides direct access to Interstate 78 and is 89 miles from downtown Philadelphia. Newark International Airport and the Port of New Jersey and New York are 116 miles away.

JLL Investment Sales and Advisory team comprised Senior Managing Director John Plower, Director Ryan Cottone and Associate Zach Maguire, alongside Vice Chairs Jeff Lockard and Paul Torosian. Senior Managing Directors Chad Orcutt, Jon Mikula and Jim Cadranell arranged the acquisition financing.

Philadelphia’s recent industrial transactions

Philadelphia registered $277 million in industrial transaction volume year-to-date as of July, according to the latest CommercialEdge report. Assets in the metro changed hands for $107 per square foot on average, below the $135 national figure. Additionally, the metro’s vacancy rate clocked in at 5.2 percent.

In August, Link Logistics sold 240 Mantua Grove Road, a 652,411-square-foot industrial facility in West Deptford, N.J. The property traded for $90.8 million—or $139.18 per square foot—CommercialEdge information shows. KKR acquired the asset with help from a $46 million loan originated by Global Atlantic Financial Group.

The post PCCP Acquires 518 KSF Facility for $58M appeared first on Commercial Property Executive.

Law firm Potter Anderson & Corroon LLP has renewed its headquarters commitment at 1313 N. Market St., a 530,000-square-foot office building in Wilmington, Del. The company will continue to occupy the 82,757-square-foot space for another 13 years.

JLL Executive Vice President Jamie Vari and Potter Anderson Partner Joy Barrist arranged the deal on behalf of the tenant.

The Siegfried Group is the owner of the 1984-completed property, according to CommercialEdge information. The company acquired the asset in 2017 from The McConnell Cos., after the previous owner defaulted on a $79 million acquisition loan.

READ ALSO: CRE Veterans Offer Advice to Would-Be Brokers

The law firm moved to the Class A property in 1997 and is currently the building’s largest tenant, occupying the entire sixth and seventh floors. As part of the new agreement, the company also plans to redesign and modernize its office space, with completion scheduled for 2026. The renovation program will feature a revamped suite for visiting trial teams and enhanced amenities, among other improvements.

A fully renovated office building

Also known as Hercules Plaza, the 12-story building went through a complete renovation in 2013. The mid-rise features column-free floorplates measuring more than 47,000 square feet, a tenant conference center and a food court, as well as the 1313 Innovation Center, a tech incubator providing 3D printing and coworking space.

Additionally, the ownership intends to upgrade the building amenities over the coming years. Plans call for additional coworking space, an upscale fitness center and a boutique lifestyle hotel.

Located within the city’s business district, the property is some 8 miles from the Wilmington Airport. Downtown Philadelphia is 32 miles northeast.

Law firm office leasing remains strong nationwide

Law firm office leasing activity continued to rise this year, with lease terms trending longer, according to a Savills report. In the first quarter of this year, the legal sector’s leasing activity clocked in at 1.7 million square feet, slightly ahead of the 1.5 million-square-foot quarterly average since 2020.

This week, law firm Smith, Gambrell & Russell decided to relocate its Chicago office to 57,000 square feet at 155 N.  Wacker Drive, an approximately 1.2 million-square-foot office tower in Chicago. Move-in is scheduled for early 2026.

Other notable deals included Williams Mullen’s lease extension at 200 S. 10th St. in downtown Richmond, Va. The law firm upped the remaining term at the 148,911-square-foot space for another seven years.

The post Law Firm Renews 83 KSF Office Lease Near Philly appeared first on Commercial Property Executive.

The property—Maryland’s second-largest mall—adds to Centennial’s nationwide footprint within the asset class.

The mall is in an affluent, growing trade area with limited competition and the possibility of adding a residential community in the center of Annapolis.

Waterfall Asset Management and Lincoln Property Co. are joining Centennial and Atlas Hill in the deal.

Lincoln Property Co. has recently made a strategic investment in Centennial’s operating business. The partnership will provide Centennial with the capital and resources it needs to accelerate its national expansion while positioning Lincoln for new mixed-use development opportunities.

Atlas Hill RE’s head, Sandeep Mathrani, is a prominent player in repositioning prominent super-regional centers to the table. Together, each entity will have a financial stake in the acquisition, and the team will work collaboratively to execute the center’s business plan.

Macy’s and JCPenney anchor Annapolis Mall, which also houses Apple, The Container Store, Crate & Barrel, Arhaus, Lululemon, Maggiano’s Little Italy, The North Face and Retro Fitness.

Centennial also announced it had executed leases at the mall for experiential retail concept Dick’s House of Sport and Dave & Busters. Both tenants are expected to open at Annapolis Mall in the winter of 2025.

Malls have become destinations

As many regional malls have failed or are struggling, creating a mix of uses that combine retail, experiential retail, entertainment, and food and beverage concepts has become essential, Todd Monahan, executive vice president & managing director of Wolf Commercial Real Estate/CORFAC International, Philadelphia, told Commercial Property Executive.

“It’s critical to create a center that is a destination and offers an experience no other center offers,” he said. “This is place-making at its finest. Consumers want a place to shop, dine and be entertained, whether it’s bowling, golf, pickleball, fitness or other uses that complement each other and extend the consumer’s stay. With online shopping becoming the norm, regional centers must differentiate themselves and offer more than retail shopping.”

Alan Hammer, partner at Brach Eichler, told CPE that he sees shopping centers or malls in America changing dramatically in the coming years.

“Super-regional malls are unique and may continue to survive or prosper in their current forms, provided they are aggressively managed,” Hammer said. “More typical malls will see the most dramatic changes. I believe it is only natural that portions of the malls will be demolished, and, in their place, multifamily housing will be constructed.”

READ ALSO: Retail Owners Gain Leverage

According to Hammer, the residents will have the convenience of shopping and entertainment in their communities, and the retailers, restaurateurs and entertainment providers will have a natural built-in customer base.

He also expects health-care facilities to be incorporated, having the same advantage as the retail tenants with potential customers onsite, while providing important convenience to the residents.

Trent Rustan, vice president, Retail Sales & Leasing, Commercial Properties Inc./CORFAC International, told CPE the Annapolis Mall sale is an example of high-quality brick-and-mortar retail continuing to be a viable investment.

“Destination locations combined with strong supporting retail and entertainment nodes can provide the synergy needed to continue to lure tourists and shoppers,” Rustan said.

He explained that where solid marketing and continued adaptation and improvement are part of a property owner’s operational strategy, more nationally branded companies and strong regional credit operators will continue to seek out the comfort of these economic nodes for their new concepts.

Lisa Christianson, president of Christianson & Co./CORFAC International, told CPE that well-located malls nationwide are reinventing themselves and upping their game.

In Edina, Minn., Southdale Center, the first enclosed mall in the country, looks different than it did five years ago. Restoration Hardware, an apartment building, Shake Shack, and a hotel all sit on out parcels of the mall. Lifetime has opened a massive, 204,000-square-foot high-end fitness and co-working space, complete with a resort-style rooftop beach club that opened at the end of 2019 as a new anchor to Southdale.

Kowalski’s, an upscale local grocery store, opened this year in the former Herberger’s box.

“Several other retailers and entertainment concepts are already open, and a slew of retailers, including Gucci, Moncler, Man Mara and Breitling, are slated to open next year, bringing a new high-end shopping experience to the mall,” she said.

Super-regional malls are not obsolete

Jim Tancredi, principal of LMT Commercial Realty, LLC/CORFAC International, told CPE that the super-regional mall business model has changed significantly recently but has not become obsolete.

“Many once-thriving malls have suffered a slow death due to the negative influence of online retailers like Amazon and Temu,” Tancredi said.

He added that the online retail sector is pirating traditional mall business because consumers can shop from the convenience of their homes at significantly lower prices. “As a result, foot traffic is down in the malls, and there is less of a need for retailers to maintain their sticks & bricks presences in these dying retail centers.”

LISTEN TO: Retail Always Comes Back—and With New Twists

According to Tancredi, further complicating the business model is the inability of mall owners to refinance current loans at today’s interest rates. He explained that in some cases, owners are strapped with debt well over 100 percent LTV.

“They are handing the keys back to the banks instead of restructuring the debt and offering up additional reserves to establish a more acceptable LTV,” Tancredi told CPE. He added that while some malls are closing, others are being converted to lifestyle centers or mixed-use projects that include uses like retail shopping, large-scale medical offices/health-care services, multifamily dwellings, as well as hospitality and entertainment venues.

Transitioning from a super-regional mall to a lifestyle center or mixed-use project is an expensive redevelopment proposition. Still, once complete, it will generally return the property to profitability, he said.

The post Centennial, Atlas Hill RE Close Major Retail Deal appeared first on Commercial Property Executive.

EdgeCore Digital Infrastructure has completed its third round of financing of the year.

The firm secured another $1.9 billion in equity, bringing the total investment obtained this year to more than $4.2 billion. Partners Group—which acquired EdgeCore in 2022—led the oversubscribed capital raise and provided a substantial amount as anchor.

The Denver-based wholesale developer and operator will use the funds to grow its presence in the hyperscale data center market.

EdgeCore’s most recent project is in Culpeper, Va., where it’s working on a 1.4 million-square-foot campus rising on 120 acres. The firm will initially build three facilities, each capable of supporting 72 megawatts.

At full build-out, the campus will be capable of supporting up to 432 megawatts. Rappahannock Electric Cooperative will deliver the power starting in 2028.

READ ALSO: Data Center Labor Shortages Take Center Stage

This new development is taking shape within the recently established Culpeper Technology Zone, a 690-acre site that local authorities have designated mainly for data center projects. Apart from EdgeCore, five other developers are in various stages of commitment to the site, including Cielo Digital Infrastructure, CloudHQ, Copper Ridge, DataBank and Peterson Cos., Data Center Frontier reported.

The site has access to sufficient infrastructure and is close to the Network Access Point of the Capital Region. “Markets such as Culpeper are at the core of our vision, given that they offer the right combination of robust utility power and proximity to Tier 1 infrastructure,” Julie Brewer, executive vice president of finance at EdgeCore, told Commercial Property Executive.

Growing a significant hyperscale portfolio

EdgeCore is doubling down on its commitment to develop hyperscale data centers, which are used for AI and other HPC applications. With its new Culpeper campus, the company is now present in five markets—the other four being Ashburn, Va., Santa Clara, Calif., Mesa, Ariz., and Reno, Nev.

In January, EdgeCore secured $1.9 billion in green financing for its 3.1 million-square-foot campus in Mesa. In March, it closed on another $440 million in debt to fund the expansion of its Santa Clara property.

Last August, the firm broke ground on its first data center project in Reno, set to provide 216 megawatts of IT load by late 2025. The 1.5 million-square-foot campus is within the Tahoe Reno Industrial Center.

Data center development outpaces power delivery

According to a recent CBRE report, data center under-construction activity across primary markets hit a record high in 2024’s first half, up 69 percent since last year to 3.8 gigawatts. As data center developers usually buy electricity in advance through a power purchase agreement, this surge in construction led to longer lead times for such infrastructure. This, in turn, led to delays in completions.

The same source shows that power availability is the top consideration when it comes to site selection. However, this did little to curb investors’ appetite for digital infrastructure—which mostly targeted new developments—as several massive deals closed this year.

For example, funds managed by Blue Owl Capital Inc., Chirisa Technology Parks and PowerHouse Data Centers recently formed a $5 billion joint venture, focused on developing hyperscale AI and HPC data centers for CoreWeave Inc.

Earlier similar investments included the $9.2 billion in equity raised by Vantage Data Centers, as well as STACK Infrastructure’s $1.3 billion financing, both announced in June.

The post EdgeCore Secures $1.9B in Equity appeared first on Commercial Property Executive.

A joint venture of Rockefeller Group, Matan Cos, Mitsubishi Estate New York, Chuo Nittochi and Taisei USA LLC has started construction on the first phase of Port 460 Logistics Center in Suffolk, Va. Upon completion, the property will comprise about 5 million square feet.

JLL Managing Director Gregg Christoffersen and Senior Vice President Kristopher Kennedy are handling the leasing efforts.

The first phase of the 540-acre campus will consist of 2.4 million square feet across five separate structures. The second phase is expected to comprise four buildings totaling 2.6 million square feet.

The first two buildings measuring 500,000 square feet, together with the development’s infrastructure, are slated for completion next year. The first stage’s costs will rise to about $330 million, according to WTKR.

READ ALSO: Top 5 Markets for Industrial Deliveries

The nine facilities will range from 250,000 to more than 1 million square feet and will include truck terminals. The buildings will be able to accommodate manufacturing, life science and logistics, port operations and warehousing uses.

In June, Governor Glenn Youngkin directed the Commonwealth Transportation Board to allocate $30.1 million from the state’s Transportation Partnership Opportunity Fund for the Route 460 Improvement Program, which will also benefit the underway campus.

Additionally, the Virginia Business Ready Sites Program awarded $126 million to several sites across the Commonwealth, including Port 460 Logistics Center. Upon completion, the project is expected to generate more than 9,000 jobs.

The campus at 2925 Pruden Blvd. will provide direct access to the Port of Virginia, located some 22 miles away. Downtown Richmond, Va., is roughly 79 miles from the site.

Port 460’s first phase, up close

The cross-dock Building 1 within Port 460 will measure 344,100 square feet and feature 100 dock-high loading doors, 198 trailer stalls, a 140-foot truck court and about 170 vehicle parking spots. The 242,000-square-foot, rear-load Building 2 will have 56 dock doors and 156 trailer spaces, 240 car spots and a 135-foot truck court.

Additionally, both facilities will have 36-foot clear heights. The other three structures will provide cross-docking services and range between 344,100 and more than 1 million square feet. These are expected to come online by the first half of 2026.

The Port of Virginia, poised for growth

The Port of Virginia is currently undergoing several infrastructure expansions set to attract new investors and further enhance the state’s economy. The Virginia Port Authority secured $1.4 billion through the Gateway Investment Program to support canal dredging, widening and upgrades to equipment and technology.

Despite a cooling demand across port industrial markets, the Port of Virginia is still a hotspot. In July, a joint venture between Turnbridge Equities and Manekin LLC started work on the 506,559-square-foot Hampton Logistics Center Campus in Hampton, Va. Expected for completion in the first half of next year, the project is 11 miles from the port.

LS GreenLink USA is also active in the area with the construction of a $681 million submarine power cable manufacturing facility in Chesapeake, Va. The development marks the largest investment for the city and rises just 5 miles from the port.

The post Rockefeller Group JV Breaks Ground on 5 MSF Virginia Campus appeared first on Commercial Property Executive.

S.L. Nusbaum Realty has secured a 10,253-square-foot lease at Wells Fargo Center, a 255,000-square-foot office property in downtown Norfolk, Va.

The tenant is PBMares LLP, an accounting and consulting firm that will occupy space at the building’s 19th floor. The landlord was represented in-house while JLL and Harvey Lindsay Commercial Real Estate negotiated on behalf of the tenant.

Notable tenants include Wells Fargo, UBS Financial Services Inc., Norton Capital Management, KPMG, Forvis, Blue Sky Psychiatry and S.L. Nusbaum Realty itself, according to CommercialEdge. The Wells Fargo Center is the first LEED Gold-certified high-rise in the city and the most recent office tower to be added in downtown Norfolk.

READ ALSO: Here’s a Surprising Shift in Remote Work’s Appeal

Earlier this June, regional law firm Williams Mullen extended its lease by seven years at 200 S. 10th St., a 207,000-square-foot office building in downtown Richmond, Va. The tenant has been anchoring the asset, also known as the Williams Mullen Center, since its completion in 2010 and will continue to occupy 148,911 square feet.

A downtown Norfolk office asset

Wells Fargo Center is a Class A office asset rising 23 stories at 440 Monticello Ave., in the city’s central business district. The high-rise came online in 2011 and has 24,500-square-foot floorplates, six passenger elevators and 1,859 vehicle parking spots situated on a multilevel structure spanning floors three to 10. Additionally, the property includes 121 luxury residential units, a conference room with up to 50 seating spaces and first-floor retail totaling 50,000 square feet.

Located in downtown Norfolk, Wells Fargo Center provides access to Interstate 264 and to multiple bus and light rail stops. The property is 10 miles from Norfolk International Airport and 18 miles from Hampton Roads Executive Airport.

Senior Vice President Deborah Stearns of JLL and Senior Vice President Clark Baldwin of Harvey Lindsay Commercial Real Estate negotiated on behalf of the tenant, while the landlord was represented in-house by Senior Vice President & Partner Stephanie Sanker.

The post SL Nusbaum Inks New Lease at Hampton Roads Office Tower appeared first on Commercial Property Executive.

Focused on developing large-scale AI/HPC data centers for CoreWeave Inc., the agreement is intended as the first stage of a partnership with the capacity to deploy up to $5 billion of capital for turnkey data center developments also supporting other hyperscale and enterprise data center customers.

The partners described the venture as “an innovative and flexible capital solution allowing for the rapid development and deployment of new AI/HPC capacity across the U.S.” on a build-to-suit basis.

READ ALSO: Data Center Labor Shortages Take Center Stage

An initial 120 MW of capacity will be delivered for CoreWeave in 2025 and 2026 at Chirisa’s 350-acre campus near Richmond, Va. Further deployments in the pipeline reportedly include both brownfield and greenfield campuses in New Jersey, Pennsylvania, Texas, Kentucky and Nevada.

Newmark served as advisor to the joint venture.

CoreWeave is a provider of cloud-based GPU infrastructure to AI developers. In May, TIME named CoreWeave one of the 100 most influential companies.

Chirisa Technology Parks has data centers in Richmond, Va.; Chicago; Piscataway, N.J.; and Seattle. The company currently offers more than 500,000 square feet of purpose-built data center capacity, with a pipeline exceeding 400 MW under development in the U.S.

PowerHouse Data Centers is the data center division of American Real Estate Partners. It has 30 buildings currently in planning or underway, totaling more than 2.3 GW of power in six major U.S. markets.

AI leads the charge

The surge in data center demand, deals and development is mostly a result of the artificial intelligence boom, as Commercial Property Executive recently reported, based on a CommercialEdge report.

An even more recent report from CBRE found that almost all CRE investors surveyed intended to increase their capital deployments to data centers, both in terms of dollar amounts and as a percentage of total CRE investments.

And a mid-year report on the data center sector from JLL states that even though the U.S. colocation data center market has doubled in size in the past four years, vacancy has hit a record low of 3 percent.

JLL further remarked that AI has driven an estimated 20 percent of new data center demand over the last year, though the company also cautions, “AI holds great potential, but it will take years for the technology to evolve and mature.”

The post $5B JV Demonstrates Energy of Data Center Sector  appeared first on Commercial Property Executive.

Lingerfelt has inked a 233,359-square-foot industrial lease at its 868,801-square-foot Ruffin Mill Distribution Center in Colonial Heights, Va. Information management provider Vital Records Control will occupy space in buildings A and C.

Range Commercial Partners represented Lingerfelt in the transaction. The three-building campus is now fully occupied by 12 tenants, including Snyder’s-Lance, Metagenics and Lindenmeyr Munroe, CommercialEdge information shows.

Lingerfelt acquired the industrial park from Kimco Realty in a $105.6 million portfolio transaction in March last year, using funds from several notes originated by Global Atlantic Financial Group, according to the same source. Immediately after, the company implemented a capital improvement program that consisted of LED retrofits, full roof replacements and several other enhancements.

The 295,936-square-foot Building A came online in 1999 and features 10 drive-in doors and 56 dock-high loading doors. The 16.5-acre property is at 1980 Ruffin Mill Road, close to Interstate 95 and within 19 miles of downtown Richmond.

The other two facilities have 14 drive-in doors and 135 dock-high doors together. Totaling about 37 acres, these properties are at 1934 and 1936 Ruffin Mill Road.

Range Commercial Partners Executive Vice President Matt Anderson and Vice President Harrison McVey brokered the deal on behalf of Lingerfelt.

Richmond’s industrial sector experiences slowdown

Richmond’s industrial market had a 452,000-square-foot decrease in net absorption in the second quarter of this year, according to a Cushman & Wakefield report. The metro’s vacancy rate during the same period clocked in at 4.2 percent, 210 basis points higher year-over-year.

US Cabinet Depot signed a 194,400-square-foot lease at North Richmond Industrial Park, which was one of the largest such deals of the second quarter, the same source shows. MacKenzie Commercial Real Estate owns the 315,900-square-foot facility, CommercialEdge shows.

The post Lingerfelt Inks 233 KSF Lease Near Richmond appeared first on Commercial Property Executive.

Carr Properties has signed a long-term lease for nearly 16,000 square feet of space at Signal House, a 10-story, Class A office building in Washington, D.C.’s Union Market District. The tenant is KIPP DC, a public school system which will move from its current headquarters to the 228,000-square-foot property.

Transwestern represented the tenant, while an Avison Young team negotiated on behalf of the landlord. The deal brings Signal House to 80 percent occupancy. KIPP DC will occupy a portion of the property’s ninth floor, with move-in scheduled for fall next year. Notable tenants at Signal House include TikTok, Industrious, NeighborWorks America, Starr Restaurant Group’s El Presidente.

READ ALSO: Top Destinations for Corporate Relocations

Completed in 2021 and designed by Gensler, Signal House is a prime office building at 1255 Union St. NE. The property features five passenger elevators, floorplates between 18,112 square feet and 24,038 square feet, on-site bike lockers, a conference room that can host up to 100 people, a lounge area, a rooftop terrace and 150 vehicle parking spots, according to CommercialEdge. Additional amenities include a DJ booth, recording studio and rooftop terrace.

Signal House is close to the NOMA-Gallaudet Metro station and Washington Union Station, while being 3 miles from downtown Washington, D.C., 6 miles from Ronald Reagan Washington National Airport and within 29 miles of Dulles International Airport.

Transwestern’s team of Senior Vice President Kamis O’Farrell Lawrence and Executive Vice President Michael Goldman negotiated on behalf of the tenant. Avison Young’s Principals Jonathan Wellborn and Eli Barnes represented the landlord. The same team, together with Senior Vice President Lauryn Harris and Carr Properties’ Senior Vice President of Leasing Kaitlyn Rausse, are the exclusive leasing brokers for the remaining space at Signal House.

Leasing deals at trophy office assets

A recent CommercialEdge report shows that Washington, D.C.’s office vacancy rate reached 16.2 percent as of July, below the national rate of 18.1 percent. The metro’s average asking rent stood at $40.45 per square foot, outperforming similar markets such as Atlanta ($32.02 square foot) and Seattle ($36.89 per square foot).

This month, Carr Properties signed a 340,000-square-foot leasing agreement at Midtown Center, a 867,000-square-foot Class A+ office mid-rise in downtown Washington, D.C. The tenant, Fannie Mae, is downsizing from a 713,500-square-foot footprint at the same property, where it started its commitment nearly a decade ago.

In the same period, law firm Brown Rudnick signed a full-floor lease at 1900 North St., another trophy office in the metro. The 256,000-square-foot Class A office asset is owned by Germany-based Commerz Real AG, part of Commerzbank Group.

The post Carr Properties Inks HQ Relocation at DC Trophy Building appeared first on Commercial Property Executive.

Skanska has completed 3901 Fairfax, its 201,000-square-foot office building in the Rosslyn-Ballston corridor of Arlington, Va.

The developer broke ground on the $128 million project in 2021. The design architect and architect of record was Arcadis Inc., the MEP engineer was GHT Ltd., the structural engineer was IMEG and Skanska USA Building served as general contractor.

Mark Carroll, executive vice president of Skanska USA Commercial Development’s Washington, D.C., operations, told Commercial Property Executive 3901 Fairfax is the only new office property to deliver in the Rosslyn-Ballston Corridor since 2021.

A new office building in Arlington

Skanska’s office building rises nine stories at 3901 N. Fairfax Drive. The property’s amenities include a 1,600-square-foot penthouse conference space that leads out to a 3,500-square-foot rooftop terrace, private tenant terraces, a 3,600-square-foot fitness facility, 10,000 square feet of ground-floor retail space and an 8,000-square-foot public plaza at street level, along with three levels of underground parking.

READ ALSO: Are Construction Costs Stabilizing?

Its sustainability features include the use of lower-carbon concrete and a Dedicated Outside Air System (DOAS) that provides 47 percent more fresh air than required by code. In addition, 3901 Fairfax is precertified WELL CORE—reportedly the first such office building in Northern Virginia—and targeting Energy Star, LEED Gold and WiredScore Gold certifications.

The building is also transit-oriented, being within three blocks of both the Virginia-GMU Metro Station and the Ballston-MU Metro Station. The location is also less than 3 miles from the 31-story tower that changed hands in one of the top 5 office transactions in the U.S. as of April.

Avison Young is handling office leasing, while H&R Retail is marketing the retail spaces. There appears to have been no preleasing, although the building has generated interest from companies in the tech, energy and legal sectors, and several tenants are in leasing negotiations. 

Upward climb

As of mid-year, Avison Young reported recently, “the Northern Virginia office market is still facing an uphill climb to reach the levels of sales and leasing velocities from pre-pandemic times.”

Nonetheless, legal services and aerospace/defense companies are seeing job growth, the report revealed, and after a spike in late 2021, lease concessions are stabilizing around 12.1 percent as a proportion of overall lease value.

In June, Novel Office, of Dallas, sold Fair Oaks Plaza, a 183,810-square-foot Class A office building in Fairfax, Va., to a private buyer for an undisclosed price. The deal was arranged by Institutional Property Advisors, a division of Marcus & Millichap.

The post Skanska Wraps Up DC-Area Development appeared first on Commercial Property Executive.

Finmarc Management has acquired Trinity Centre, a four-building office portfolio totaling almost 500,000 square feet in Centreville, Va., a Washington, D.C., submarket. Spear Street Capital LLC and Partners Group sold the assets for $39.4 million.

Cushman & Wakefield brokered the deal on behalf of the seller, while Finmarc was represented in-house. Kelley Drye & Warren LLP Partner Aaron Rosenfeld provided legal services to the new owner. The portfolio was 71 percent leased at the time of sale.

The four buildings previously traded in 2012 in two separate transactions, when the joint venture acquired them from Clark Enterprises, CommercialEdge data shows. The total sale price was $108.5 million, almost three times higher than the current price.

READ ALSO: Strong Start for DC Office Sales, But Other Fundamentals Lag

The properties came online between 1999 and 2006 and underwent cosmetic renovations in 2013, according to the same source. Two of the buildings rise six stories and consist of almost 152,000 square feet, each. The other two rise three stories, each one comprising 93,000 square feet.

The campus’ tenant roster includes Parsons Corp., CARFAX, Microautomation and Specialized Carriers & Rigging Association. Trinity Centre is also part of a 70-acre master-planned community that includes three restaurants, a 100,000-square-foot fitness center, a 136-key hotel and a lake.

Located at 5860, 5870, 5875 and 5885 Trinity Parkway, the buildings are less than 13 miles from Dulles International Airport, while downtown Washington, D.C., is 26 miles northeast.

DC sales volume ranks second nationwide

In the first six months of 2024, Washington, D.C.’s office investment volume amounted to more than $1.3 billion, with properties trading for an average of $250 per square foot, the latest CommercialEdge office report shows. The metro’s deal volume ranked second nationally, being surpassed only by Manhattan’s ($1.4 billion).

In March, a joint venture led by Quadrangle Development Corp. paid $95 million for a 177,155-square-foot office building in Washington, D.C. Credit Suisse sold the property at 1099 New York Ave. NW.

Other recent notable deals in the area include DSC Partners and Harbert Management Corp.’s acquisition of a 785,000-square-foot portfolio in Lanham, Md., for $86 million. The assets include industrial, flex and office space.

The post Finmarc Acquires DC-Area Portfolio appeared first on Commercial Property Executive.

CRC purchased the shopping center back in 2019, as an investment through Fund V. Since acquiring the asset, the Baltimore-based company has sold nine out of 10 free-standing pad sites for $16.1 million, with an average cap rate of 5.4 percent. The total exit value, including the sale of the shopping center, has reached approximately $52.4 million—more than double the initial purchase price of $23.5 million.

JLL brokered the transaction on behalf of CRC. At the time of the sale, the shopping center was 97 percent leased. CRC brought the center’s occupancy from 79 percent to 97 percent during its ownership by signing new long-term leases with Burlington, Crunch Fitness, Guitar Center, HomeGoods and Party City.

LISTEN TO: Retail Always Comes Back—and With New Twists: An Attorney’s Insights

Anchored by Burlington, Crunch Fitness, Home Goods, Marshalls, PetSmart, Regency Furniture, 2nd & Charles and Party City and shadow-anchored by The Home Depot and a Walmart Supercenter, Centre at Hagerstown has a diverse mix of nearly 20 national and regional retailers.

Located at 17850 Garland Groh Blvd., Centre at Hagerstown is within the Washington County. The shopping center is near the intersection of Interstate 81 and Route 40, in an area where the daily traffic count reaches approximately 76,000 vehicles. Centre at Hagerstown serves more than 92,000 residents within a 5-mile radius, with the average household income surpassing $80,000, according to CRC.

A rapid expansion

Active in 11 states, with over $4 billion in assets under management, CRC has grown its shopping center portfolio by more than 3 million square feet since 2020. The company currently owns and manages nearly 9 million square feet of retail space, in addition to a multifamily portfolio exceeding 9,000 apartments.

Earlier this year—in its first Virginia purchase—CRC has acquired a 160,830-square-foot neighborhood shopping center in Richmond, through its Continental Realty Opportunistic Retail Fund I LP. ShopCore sold the asset for $22 million.

Last year, the company also entered the Southern California market with the acquisition of a 292,000-square-foot luxury retail center in Costa Mesa, Calif., using funds from the Continental Realty Opportunistic Retail Fund I LP.

The post Continental Realty Seals Regional Shopping Center Sale appeared first on Commercial Property Executive.

DLC and Meadow Partners have acquired Penn Mar Shopping Center, a 378,205-square-foot, grocery-anchored shopping center located inside Washington, D.C.’s Capital Beltway. The previous owner was MEPT, according to CommercialEdge information.

The Forestville, Md., asset changed hands in a $68.5 million, off-market transaction. Apollo and Athene provided acquisition financing.

DLC now owns more than $250 million of open-air retail in the southern portion of Prince George’s County.

Anchored by a grocery store

Completed in 1960, Penn Mar was 91.5 percent leased at the time of sale. It is anchored by the highest-trafficked Shoppers Food Warehouse, which recently completed a 10-year renewal and a full store renovation. Other national anchor tenants include Burlington, Ross Dress for Less, Dollar Tree, Petco and Foot Locker.

The property also features eight single-tenant pad sites, home to Starbucks, Truist Bank, Taco Bell, Raising Cane’s, IHOP, Wendy’s and Long John Silver’s.

READ ALSO: As Grocers Grow Faster, Investor Interest Heats Up

Penn Mar is in Prince George’s County, less than 10 miles from downtown Washington, D.C. The shopping center has an average household income of $95,430 and a population of more than 95,000 within a 3-mile radius.

DLC has been an owner/operator in Prince George’s County for more than 20 years. The acquisition of Penn Mar complements an existing portfolio of three grocery-anchored and value-oriented retail assets totaling more than 658,000 square feet.

The firm benefits from a growth capital commitment provided by Temerity Strategic Partners. In December 2023, TSP and DLC launched a venture aimed at enabling the latter to double its portfolio size by 2025.

Shoppers drawn to ‘all-in-one’ setup

Josh Schrier, executive vice president & CIO at PREIT, told Commercial Property Executive that shoppers are now drawn to dynamic, multi-use properties where they can shop, dine, play and stay all in one place.

“In a densely populated market with a great consumer base and thousands of new housing units developed recently, demand for space has been steadily increasing, suggesting a strong investment opportunity,” Schrier said.

On the other hand, open-air shopping centers experience the highest purchasing demand, combined with the least availability from sellers. Despite financing conditions remaining tight, pricing hasn’t softened, due to strong investor interest.

The post DLC, Meadow Partners Make $69M Retail Investment appeared first on Commercial Property Executive.

JK Land Holdings has purchased a 25.3-acre asset in Ashburn, Va., where it intends to build a 360,000-square-foot data center. Finmarc Management sold the property for $60 million. KLNB and CBRE represented the buyer and the seller, respectively.

Finmarc had purchased the asset in 2019 for $26.1 million, funding its acquisition with a $20.1 million loan issued by City National Bank of West Virginia, CommercialEdge data shows.

The property currently encompasses a three-story, 110,000-square-foot office building and a nearly 80,000-square-foot R&D/warehouse structure. Telos Corp. is the sole tenant, having occupied the entire property since 1988. According to its most recent annual report, the lease will expire in 2029.

READ ALSO: How AI is Boosting the Data Center Market

The land is fully entitled for data center use with approval from Loudoun County. According to the filed plans, the facility will include 20 generators and a dedicated substation. However, JK Land Holdings Chairman Chuck Kuhn claimed that the company will make a final decision once Telos exits the lease, as reported by Washington Business Journal.

Located at 19886 Ashburn Road in Loudoun County, the site is some 35 miles from downtown Washington, D.C. TA Realty’s upcoming 1.9 million-square-foot data center, which the firm fully leased to a global cloud service provider last year, will operate less than 6 miles away.

KLNB Commercial Real Estate Broker and Principal Ryan Goeller represented JK Land Holdings while CBRE Vice Chairman Rob Faktorow and First Vice President Josh Greenberg alongside Vice President Anna Faktorow led the negotiations on behalf of Finmarc.

Northern Virginia continues to dominate U.S. data center sector

Keeping up with increasing data center demand, Northern Virginia’s inventory grew 18 percent year-over-year as of March 2024, according to a CBRE report including statistics for the first four U.S. primary markets: Northern Virginia, Dallas-Fort Worth, Chicago and Silicon Valley. The region’s vacancy rate dropped 90 basis points to 0.9 percent in March, the lowest in the nation.

The report goes on to show Northern Virginia’s average monthly asking rates for a 250- to 500-kW requirement grew by 41.6 percent year-over-year at the end of 2024’s first quarter. The region outperformed the average of those four markets, which grew by 20 percent during the same interval.

New rules for Loudoun County data center development

As power remains undersupplied, an issue amplified by a scarcity of developable land, a new local zoning ordinance dampened Virginia’s supply pipeline further. In December 2023, Loudoun County adopted a zoning ordinance that includes changes to the approval process.

This new ordinance aims to reduce impact upon residential properties that neighbor data centers by implementing standards for soundproofing roof-tops, noise studies, limited generator testing hours, among others.

The post JK Land Holdings Plans Northern Virginia Data Center appeared first on Commercial Property Executive.

The tenant will occupy 27,513 square feet at the 11-story office property, according to CommercialEdge. With this deal, the property reached 92 percent occupancy, with 18,000 square feet now available for lease. Other tenants at 1900 N St. NW include Beveridge & Diamond, Goodwin Procter and CBRE.

The same source shows that the current ownership picked up the asset in 2022, when it paid $31.3 million to seller JBG Smith.

Completed in 2019, the glass-wrapped office property features 27,777-square-foot floorplates and ample column spacing, a 4,000-square-foot fitness center, an on-site bike locker, a conference center and 1,700 square feet of retail space. Additional features include a three-story column-free lobby, a more than 8,000-square-foot private rooftop space with indoor and outdoor amenities, as well as on-site restaurant options.

READ ALSO: Strong Start for DC Office Sales, But Other Fundamentals Lag

The office building rises at the corner of Nineteenth and N streets, within the city’s Central Business District and on the South side of Dupont Circle. The property is 5 miles from Ronald Reagan Washington National Airport, 7 miles from Bethesda, Md., and 29 miles from Dulles International Airport.

The Savills team working on behalf of the tenant included Vice Chairman Gary Stein, President David Goldstein, Senior Managing Director Jon Glass and Assistant Director Owen Jaccard. The ownership was represented by JLL’s team of Senior Vice Presidents Kristen Mathis and Thomas Myers, together with Executive Managing Directors Evan Behr and Doug Mueller, who are the exclusive leasing brokers for 1900 North St.

Notable leasing deals in D.C.

Washington, D.C.’s office vacancy rate was 16.2 percent as of June, a recent CommercialEdge report shows. The figure was lower than the national rate of 18.1 percent, as well as Manhattan’s 16.6 percent and Chicago’s 19.2 percent.

Recent notable office leases in the metro include BGR Group’s expansion and renewal for more than 40,000 square feet at the Homer Building. The historic, 460,000-square-foot landmark is owned by Mitsui Fudosan America Inc., represented in negotiations by JLL.

One of the most significant leases so far this year remains The Washington Post’s 300,000-square-foot renewal at One Franklin Square, signed in early 2024. The media publisher has been a tenant at the 612,189-square-foot building since 2016.

The post Commerz Real Inks Full-Floor Deal at DC Trophy Office appeared first on Commercial Property Executive.

Fannie Mae will downsize its headquarters space in Washington, D.C. It signed a new long-term lease for 340,000 square feet at Carr Properties and IGIS Asset Management’s Midtown Center, where it currently occupies 713,500 square feet. The government-sponsored enterprise exercised its early-out clause to vacate that space by May 2029, Commercial Observer reported.

Fannie Mae signed what was the largest private sector office lease in the metro nearly a decade ago—when the building was still under construction—and moved in the space in 2019. The GSE was supposed to lease the space until 2034, according to the same source.

Cushman & Wakefield and Venable LLP represented Fannie Mae in the new lease transaction. The landlord was represented by an in-house leasing member and Fried Frank.

READ ALSO: Top Destinations for Corporate Relocations

Fannie Mae declared in prepared remarks that the reduced office footprint will enable the company to effectively meet the needs of its employees and business operations while maintaining fiscal responsibility.

A LEED Gold-certified property

Carr Properties completed the LEED Gold-certified property in 2017, using funds from a $525 million construction loan originated by Wells Fargo Bank a year earlier, according to CommercialEdge information. In 2021, the firm sold a 49 percent stake in the building to IGIS Asset Management, a deal which valued the asset at $980 million, Bisnow reported.

Midtown Center has two 14-story buildings connected by three pedestrian bridges and is on the former site of The Washington Post’s flagship office. Designed by SHoP Architects, it features floorplates averaging 75,500 square feet, a 45,000-square-foot retail plaza, a fitness center, EV charging stations, a yoga room, a penthouse conference center and a rooftop terrace.

The property is at 1100 15th St. NW in downtown Washington, D.C., close to several retail and dining destinations. The Ronald Reagan Washington National Airport is within 4 miles.

Cushman & Wakefield Vice Chair Art Santry and Executive Managing Director Ned Goodwin, together with Venable Partner Philip M. Horowitz and Counsel Jean Yin Crews, brokered the deal on behalf of Fannie Mae. Carr Properties Senior Vice President Kaitlyn Rausse and Fried Frank Partner Valerie Kelly represented the owner.

Washington, D.C.’s office vacancy grew year-over-year

Washington, D.C.’s office vacancy rate stood at 16.2 percent as of June, up 160 basis points year-over-year, but below the 18.1 percent national figure, the latest CommercialEdge office report shows. Additionally, the metro’s average full-service equivalent listing rate during the same month was $39.78, a 1.9 percent decrease since last year.

In one of the largest deals in the metro so far in 2024, The Washington Post extended its lease at One Franklin Square. The tenant will continue to occupy 300,000 square feet at Hines’ building, less than 1 mile from its former flagship office.

Earlier this year, BGR Group renewed and expanded its lease at the Homer Building. The company will occupy more than 40,000 square feet at Mitsui Fudosan America Inc.’s 460,000-square-foot property.

The post Fannie Mae Signs 340 KSF Lease in Downtown DC appeared first on Commercial Property Executive.

First Washington Realty has sold Harbour Pointe Village, a 123,772-square-foot grocery-anchored shopping center in Midlothian, Va., in a transaction arranged by JLL. The anchor tenant, Publix Supermarkets, acquired the asset that was 96 percent leased at the time of closing.

Publix paid $35.8 million for the asset, according to Richmond BizSense. The property previously traded in 2012 for $20.8 million, CommercialEdge data shows.

Completed in 1993 on nearly 14 acres, Harbour Pointe Village underwent a cosmetic renovation in 2017. Its tenant roster includes a diverse mix of 16 retailers, such as Publix, Golds Gym, Crumbl Cookie, Little Caesars, Comcast, Dong’s Karate and Rico’s Mexican Restaurant.

READ ALSO: How an Old Nevada Office Park Is Getting a Retail Makeover

Located at 13602-13728 Hull Street Road, the shopping center is in an area where the daily traffic count reaches more than 70,000 vehicles, according to JLL. Harbour Pointe Village serves 104,909 individuals and about 37,955 households within a 5-mile radius, with the average income of $139,581, according to First Washington.

JLL Managing Directors Jordan Lex and Dean Sands, together with Director Daniel Naughton, led the Capital Markets team working on behalf of the seller.

Grocery-anchored shopping centers in thriving submarkets—particularly in the Southeast—are highly sought after by investors, Lex mentioned in prepared remarks. The Publix at Harbour Pointe Village is one of the chain’s best-performing locations, attracting more than 600,000 visits annually, JLL also shows.

The post Publix Buys Richmond Shopping Center for $36M appeared first on Commercial Property Executive.

Nationally, there has been a notable decrease in sales volume during the first five months of 2024, with industrial investment totaling $13.6 billion, according to CommercialEdge data. This represents a 4.3 percent decline from the $14.2 billion recorded during the same period last year and a substantial 54.4 percent drop from the $29.8 billion of two years ago.

The Mid-Atlantic region follows this national trend with a 21 percent drop in sales volume, decreasing to $458.1 million year-to-date in May from $581.5 million last year. This is a stark contrast from the $1.7 billion recorded two years ago, marking a dramatic 73 percent decline. The price per square foot was $398.48, down 3.8 percent from $414.20 last year and 23.5 percent from $520.02 two years ago.

Using CommercialEdge data, we’ve outlined industrial real estate transaction trends across the Mid-Atlantic markets, with specific insights into the Washington, D.C., Baltimore and Richmond-Tidewater, Va., metros.

1. Washington, D.C.

Despite being the largest market by sales volume in the Mid-Atlantic, Washington, D.C., saw both sales volume and price per square foot decline, indicating a cooling market, coupled with slowing demand and industrial space being delivered vacant.

The metro has experienced a significant decline in industrial sales, the volume dropping to $192.6 million year-to-date through May, CommercialEdge data shows. This represented a 40 percent decrease from $318.7 million during the same period last year and a 72.2 percent drop from $692.7 million two years ago.

The price per square foot also decreased in May 2024, falling to $156.66 from $235.66 last year and $289.25 two years ago, reflecting a downward trend in property valuations.

In the market's largest industrial sale in the first five months of the year, Terreno Realty made an $84.3 million purchase of the Fleet Industrial Park, a four-building, 357,000-square-foot logistics campus in Alexandria, Va. The seller was State Teachers Retirement System of Ohio, which owned the complex since 1993.

2. Baltimore

Industrial sales volume in Baltimore reached $142.6 million year-to-date through May, showing minimal fluctuation compared to the $145.8 million recorded during the same timeframe last year but a significant decline from the $717.36 million recorded two years ago.

Meanwhile, the price per square increased to $125.94 by May 2024, up 33.6 percent from $94.23 last year, but slightly down from the $129.10 two years ago, according to CommercialEdge. This increase indicates a recovery in property values, while also suggesting of the sales volume.

Notable transactions included Stoltz Real Estate Partners’ purchase of 10000 Franklin Square Drive, a Class A warehouse in Nottingham, Md., totaling approximately 383,000 square feet. TA Realty sold this property for $41 million.

In April, NorthBridge Partners sold a 121,800-square-foot industrial asset at 2701 Wilmarco Ave. in Baltimore. Goodwill paid $25.1 million, or an impressive $206.28 per square foot.

3. Richmond-Tidewater

As of May 2024, Richmond-Tidewater's sales volume has slightly increased to $122.9 million, marking a modest 5.1 percent rise from the previous year's $116.9 million. That pointed to a minimal rebound in market activity, though the amount still was significantly lower than the $277.6 million recorded two years ago.

The price per square foot has also shown a positive trend in May 2024, increasing 37.4 percent to $115.88 from $84.31 last year. Two years ago, the price per square foot was $101.67, reflecting a consistent upward trajectory in property valuations. Overall, the metro posted a slight recovery in sales volume and a steady increase in PSF, suggesting an improving market.

Notable transactions included Portacool's acquisition of Willis Commerce Center in Richmond, Va., for $54.5 million. The 405,000-square-foot spec warehouse was sold by BentallGreenOak, which had purchased it from Scannell Properties two years prior.

In another significant deal, B&D Holdings acquired an industrial campus in Chesapeake, Va., consisting of 3732 Cook Blvd. and 1400 Cavalier Blvd. Link Logistics paid $53.9 million for this nearly 400,000-square-foot property.

The post Top Mid-Atlantic Markets for Industrial Transactions appeared first on Commercial Property Executive.

DH Property Holdings LLC, of New York, has received a $53.8 million construction loan for its PhilaPort Logistics Center. ACORE Capital provided the funds in a deal arranged by Walker & Dunlop.

The 282,250-square-foot last-mile warehouse and distribution center is currently under development on at 15-acre site at 3060 S. 61st St. in Philadelphia. The project broke ground earlier this month and is scheduled to deliver in the third quarter of 2025.

Designed to achieve a LEED Silver certification, PhilaPort Logistics Center will feature 40-foot clear heights, a 330-foot building depth, 135-foot truck court depth, 50 exterior dock doors, two drive-in doors, 72 trailer parking stalls and 187 car parking stalls. The rear-load building will also include about 5,000 square feet of speculative office space.

READ ALSO: Top 5 Metros for Industrial Deliveries

The property is 2.9 miles from the Philadelphia International Airport, 3.8 miles from Center City and 6 miles from the Packer Avenue Marine Terminal. Chris Pennington of Binswanger and Jonas Skovdal of Cushman & Wakefield will be leading the leasing activity for the facility.

Walker & Dunlop’s New York Capital Markets team, led by Aaron Appel, Jonathan Schwartz, Keith Kurland, Adam Schwartz and Michael Ianno, arranged the financing.

Just a year ago, DH Property Holdings landed a $175 million financing package for 5000 Richmond St., a 750,000-square-foot last-mile distribution project in Philadelphia. In that deal, too, Walker & Dunlop arranged all of the funding: a $135 million construction loan from Massachusetts Mutual Life Insurance Co., plus $40 million in partner equity.

Stable vacancy across Philadelphia’s industrial market

The metro Philadelphia industrial market is characterized currently by a stable vacancy of 6.7 percent, though construction starts have declined because of “higher interest rates, available inventory, and the impending arrival of 13.9 million square feet of new space by mid-2024,” according to a first-quarter report from Cresa.

Cresa also notes that Philadelphia, like some other East Coast ports, is benefitting—sadly—from container traffic being diverted from Baltimore, where the Francis Scott Key Bridge collapsed on March 26. As things now stand, the design-build team for the replacement bridge should be chosen by late summer, and the target for completing the new bridge is October 2028.

The post DH Property Holdings Gets $54M for Philly Industrial Project appeared first on Commercial Property Executive.

Finmarc Management Inc. has purchased Riverview Plaza, a 185,275-square-foot regional shopping center in Frederick, Md., for $30 million. The joint venture of EDENS and JPMorgan Chase & Co. sold the asset. This is the second property and first retail center Finmarc added to its Frederick-area portfolio.

CBRE Executive Vice President Ryan Sciullo and Vice President H. Casey Benson Smith brokered the transaction on behalf of the seller, while Finmarc was self-represented.

Completed in 1998, Riverview Plaza last changed hands back in 1999, when the EDENS joint venture purchased it, according to CommercialEdge data. Last year, EDENS sold a 168,655-square-foot shopping center in Bridgeport, Conn.

The tenant roster includes anchors TJ Maxx, Michaels, PetSmart and Bob’s Discount Furniture, along with a mix of diverse retailers such as Sierra and Old Navy. It is also shadow-anchored by the nearby Home Depot and Target. At the time of the deal, Riverview Plaza was 95 percent leased.

Located at 5425 Urbana Pike, the shopping center is within an Opportunity Zone. Riverview Plaza is near Interstate 270, in an area where the daily traffic count reaches 20,000 vehicles, according to Finmarc. The retail center serves 125,000 individuals within a 5-mile radius, with an average income of $130,000.

Baltimore’s retail sector looks solid

Baltimore started the new year with strong retail leasing activity, despite a slight increase in vacancy, according to a recent market report from MacKenzie Commercial Real Estate Services. Overall vacancy increased 10 basis points quarter-over-quarter, to 6.2 percent as of March.

More than half a million square feet of existing space has been leased this year, and 37 percent of the 286,000 square feet under construction is still available, with most already pre-leased.

The post Finmarc Pays $30M for Baltimore-Area Shopping Center appeared first on Commercial Property Executive.

Philadelphia’s office market remained on a relatively stable trajectory, considering ongoing headwinds, such as debt maturity and rising vacancy rates. According to the latest CommercialEdge data, Philly developers were working on adding 1.1 percent of existing stock to the inventory as of May.

Meanwhile, investment in the first five months of the year declined to less than half of the volume recorded in the same period last year, while vacancy increased 200 basis points, but remained below the national average.

The most significant office lease was an extension, while one of the largest properties to come online was a medical outpatient facility in the CBD. Read on for our in-depth report for the first five months of this year.

Philly development outpaces some peer markets

As of May, Philadelphia had 2.1 million square feet of office space under construction, which represented 1.1 percent of existing stock—just 10 basis points below the national figure. Compared to similarly sized secondary markets, Philadelphia outpaced Houston (0.8 percent of stock underway) and Phoenix (0.3 percent), while Charlotte (2.3 percent) and Nashville (4.6 percent) remained ahead.

The largest office development in Philadelphia is Parkway Corp.’s 2000 Arch St., taking shape in the Logan Square neighborhood. The 550,000-square-foot property will serve as a consolidated headquarters for Chubb. Last year, Parkway obtained $409 million in credit tenant lease financing for the project. Completion is slated for early 2026.

Developers broke ground on four properties totaling 976,260 square feet in the first five months of the year. This was down to less than half of the 2 million square feet of office space that broke ground in the same period last year across six properties.

READ ALSO: NAREE Special Report: Why Conversion Isn’t CRE’s Magic Bullet

Three properties came online in the market year-to-date through May, encompassing 647,303 square feet. The largest of these was the 462,000-square foot Jefferson Honickman Center in the CBD. The 19-story medical outpatient facility cost $762 million to develop and its construction took four years.

Another significant asset that came online during this time was the 105,303-square-foot Walkers Mill, in suburban Wilmington, Del. The building is part of Pettinaro’s 56-acre mixed-use Barley Mill project, which includes 38,700 square feet of retail, 80 luxury apartments and 33 townhomes.

Vacancy grows, but maintains below the nation’s average

Philadelphia’s office market saw its overall vacancy increase by 200 basis points year-over-year, to 15.3 percent as of May. Although growing, the figure remained below the 17.8 percent national rate. It also lagged peer markets Charlotte (14.7 percent) and Nashville (15.0 percent). Meanwhile, Phoenix (18.2 percent) and Houston (22.5 percent) had higher vacancy rates.

A significant lease deal that took shape in the first five months of the year was an extension. Dow, a materials science company signed a long-term agreement for 800,000 square feet in Collegeville, Pa., at Northeast Dow Center. The 1.9 million-square-foot office, life science and mixed-use campus is owned by a joint venture of David Werner Real Estate Investments and GreenBarn Investment Group.

Tech markets have been severely impacted by industry headwinds that started at the end of 2022, and vacancy in these areas mirrored this, according to the latest CommercialEdge national office report. San Francisco suffered a severe 510-basis-point increase year-over-year, to 25.5 percent as of May, while Seattle’s rate grew 350 basis points, to 23.0 percent.

Investment drops below half year-over-year

Investors traded $145 million in office assets across the metro year-to-date through May, 58.9 percent less year-over-year. More than 2 million square feet of office space changed hands, down from the 2.6 million square feet recorded in the same period last year.

These properties traded for an average price per square foot of $90 as of May, down 44.4 percent year-over-year—below the nation’s $165 figure. Philadelphia also lagged peer markets like Charlotte ($121 per square foot), Houston ($125), Phoenix ($191) and Nashville ($227).

Philadelphia’s two largest office deals were both in suburban Wilmington and had the same buyer. Global pharmaceutical company Incyte acquired the office assets at 1100 N. King St. and 1100 N. French St., for $34.2 million and $13.3 million, respectively. Capital Commercial Investments sold both assets, which measure a combined 501,553 square feet.

Three other office deals valued at more than $10 million closed in the metro year-to-date through May. Notably, LCN Capital Partners acquired the asset at 311 Veterans Way in Levittown, Pa., for roughly $121 per square foot. The 90,371-square-foot property was a retail-to-office adaptive reuse, redeveloped in 2002.

Peer markets outpace Philly’s shared space totals

Philadelphia’s shared office space inventory comprised more than 2.5 million square feet as of May, which represented 1.4 percent of total rentable office space. This share was smaller than the national average of 1.8 percent. Similarly sized metros remained ahead of Philadelphia with slightly larger shared office space segments—Houston with 1.7 percent of stock, Atlanta (2.1 percent), Charlotte (1.5 percent) and Nashville (3.0 percent).

Regus was Philadelphia’s largest coworking provider, with roughly 445,000 square feet of space across 24 locations. Other significant players included Industrious (122,775 square feet) and Convene (87,700 square feet).

The post Philadelphia’s Office Market Maintains Stable Course appeared first on Commercial Property Executive.

New Kent Logistics Center will rise on one of the few large sites zoned by-right for industrial and distribution users, Matan Managing Director Jamie Minkler said in prepared remarks. Because they are moving quickly to construct the first building, the firm expects the project to attract a wide variety of potential tenants.

At full build-out, the industrial complex will include four facilities ranging from 200,000 to 1,218,600 square feet. Each building is set to have a minimum 32-foot clear height, 50 to 154 dock doors, drive-in bays and 60-foot speed bays. Plans also call for ample trailer, car and electric vehicle parking across the property.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

The campus is expected to accommodate companies that do business along the I-64 corridor and serve the Mid-Atlantic region and major cities. Distribution along the critical connection from the Port of Virginia to Interstate 95 will continue to grow because of VDOT’s widening of the road from four to six lanes, improving travel times.

Located between the Richmond and Hampton Roads industrial submarkets, the campus will be adjacent to AutoZone’s 800,000-square-foot East Coast distribution center and less than 1 mile from the planned Buc-ee’s, a travel center chain based in Texas known for its huge gas stations and convenience stores. The New Kent Buc-ee’s will be located off Interstate 64 and is slated to open in 2026 or 2027.

JLL’s Gareth Jones, Chris Avellana and Charlie Polk will be handling leasing. Matan will be managing the property.

More Matan projects

Matan’s current portfolio comprises more than 7 million square feet of industrial, life science and office space, with another 15 million square feet in the development pipeline.

One of the firm’s holdings is the 50-acre Redstone Industrial campus in Manassas, Va. Early this year, DHL eCommerce signed a full-building lease of 138,000 square feet at the property.

As for developments, last year Matan entered into $300 million joint venture with Rockefeller Group for the construction of a 5 million-square-foot industrial and logistics campus in Suffolk, Va. Port 460 Logistics Center will take shape on 540 acres in the Hampton Roads submarket.

The post Matan Cos. Eyes 2 MSF Industrial Campus appeared first on Commercial Property Executive.

LS GreenLink USA Inc. will develop a $681 million submarine power cable manufacturing facility in Chesapeake, Va. This marks the largest capital investment for the City of Chesapeake.

South Korean company LS Cable & System’s subsidiary plans to break ground on the 753,400-square-foot project next year, according to the Korea IT Times, while completion is scheduled for 2027.

LS GreenLink will build the facility on a 98-acre brownfield site. Once operational, it will allow the company to meet global demand for submarine power cables, which are mainly used for offshore wind farms and renewable energy projects. This will be the largest such facility in the country.

READ ALSO: Industrial Property Values on the Upswing

The manufacturing plant will rise at 1213 Victory Blvd., within the Hampton Roads Beltway, along the Elizabeth River and will feature a 656-foot power cable production tower. The site provides access to interstates 64, 264 and 464, as well as to the Norfolk Southern railway, and is 5 miles from the Port of Virginia.

Largest capital investment in the city

The project qualified to receive $99 million in Qualifying Advanced Energy Project Credits (48C) this March, which are awarded to certified advanced energy projects to boost the renewable energy sector.

LS GreenLink will also receive $48 million in subsidies and tax incentives from the Commonwealth of Virginia and the City of Chesapeake, facilitated through the Virginia Economic Development Partnership and the Chesapeake Economic Development Authority, Korea IT Times reports.

Additionally, LS GreenLink qualifies for state benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program. Upon completion, the development will create more than 330 full-time positions.

A growing niche sector

The submarine power cable manufacturing sector in the U.S. is experiencing significant growth, driven by increasing demand for renewable energy and the expansion of offshore wind farms. This sector’s expansion supports the nation’s transition to sustainable energy and bolsters energy infrastructure.

Cenergy Holdings is also planning to build a cable manufacturing facility in Baltimore, Md. The company acquired a 38-acre waterfront property and will start with the construction of a land cables plant to address the growing need for grid upgrades. The total investment will be around $200 million.

The post GreenLink to Develop $681M Cable Plant in Virginia appeared first on Commercial Property Executive.

Stifel Financial Corp. has signed a 35,000-square-foot office lease at Armada Hoffler’s Wills Wharf, a 330,000-square-foot building in Baltimore. JLL and Cushman & Wakefield represented the landlord and tenant, respectively.

The trophy property offers 236,000 square feet of Class A office space, as well as 156 hotel keys. Built in 2020, Wills Wharf is LEED Silver Core and Shell certified. The 12-story, $120 million building features 34,653-square-foot floorplates, a daycare center, as well as waterfront views, among others.

Through its relocation from downtown St. Louis, the independent investment bank and financial services company will join ranks with other tenants such as Morgan Stanley, Franklin Templeton and Transamerica.

READ ALSO: Sizing Up the Prime Office Building Landscape

Located at 1201 Wills St., the building rises on the banks of Patapsco River, inside an 89-score walk area. Several upscale dining options, parks, as well as a ferry terminal, are within walking distance, while downtown Baltimore is more than 1 mile away.

JLL Vice President Peter Jackson represented Armada Hoffler in the leasing proceedings. Cushman & Wakefield Senior Managing Director David Downey Jr. and Executive Director Courtenay Jenkins spearheaded the negotiations on behalf of Stifel Financial Corp.

A closer look at Harbor Point

Wills Wharf is part of Harbor Point, a 27-acre mixed-use project including 3 million square feet of office—which is 98 percent leased—retail, residential and hospitality space. Armada Hoffler developed the project alongside Beatty Development Group.

Harbor Point’s first two phases debuted between 2010 and 2020, with Wills Wharf being the latest addition to the project. There are currently three other developments under construction at the Harbor, with another in the planning and permitting stages.

In 2021, Armada Hoffler paid $246 million to purchase a majority stake in the Exelon building, a 440,000-square-foot mixed-use property inside Harbor Point.

Baltimore’s office market marches on

According to a recent Cushman & Wakefield report, Baltimore’s office vacancy rate stood at 17.4 percent at the end of 2024’s first quarter. The city’s office absorption was negative, at 136,000 square feet year-to-date through March, the same report reveals.

The overall office leasing activity in Baltimore throughout 2024’s first quarter clocked in at 1.1 million square feet, distributed nearly evenly between new leases and renewals, according to the report. This year’s figures edge 2023’s (812,640 square feet) and 2022’s (960,865 square feet) during the same period.

In February, Window Nation inked a 50,698-square-foot lease at St. John Properties and Greenbaum Enterprises’ 104,412-square-foot office building inside the 605-acre Maple Lawn mixed-use community.

The post Armada Hoffler Inks 35 KSF Office Lease in Baltimore appeared first on Commercial Property Executive.

A joint venture between Turnbridge Equities and Manekin LLC has begun construction on Hampton Logistics Center, a two-building, 506,559-square-foot industrial campus located in Hampton, Va. Delivery is expected by mid-2025.

The groundbreaking took place roughly two months after the partners purchased the 32-acre site from the City of Hampton Economic Development Authority. They also secured a $43.8 million construction loan from Knighthead Funding LLC, alongside joint venture equity from Heitman.

A JLL Capital Markets team consisting of Senior Managing Directors Bill Prutting and Pete Pittroff, Managing Directors Chris Hew and Rob Carey, Senior Director Dave Andrews and Directors Craig Childs, Josh McArdle and Chis Dale secured the financing on behalf of the developer.

Hampton Logistics Center is not the sole result of the collaboration between Turnbridge and Manekin. The two firms are also partners in the development of National Capital Business Park, a multi-phase park in Bowie, Md., that will span 3.5 million square feet of industrial space across 280 acres.

Port-focused project

At full build-out, Hampton Logistics Center will consist of two warehouses. Building 1 will be a 230,874-square-foot facility located at 1012 N. Campus Parkway, while Building 2 will span 275,685 square feet at 1008 N. Campus Parkway.

Both facilities are set to include 36-foot clear heights, 268-foot truck courts and 52- by 52-foot columns with 60-foot speed bays. The project was designed to achieve a LEED Gold certification.  

READ ALSO: Industrial Property Values on the Upswing

Hampton Logistics Center is 11 miles from The Port of Virginia and 19 miles from Norfolk International Terminal’s North and South Gates. Marine terminals at Newport News, Va., and Portsmouth, Va., are 9 and 25 miles away, respectively.

JLL Managing Director Gregg Christoffersen will handle leasing at the park. Turnbridge anticipates that most of the property’s tenants will come from the public sector, particularly the Department of Defense, due to the campus’ location near Langley Air Force Base, Norfolk Naval Station and NASA’s Langley Research Center.

Triumphs on Hampton Roads

Due in part to its proximity to one of the busiest ports on the East Coast as well as the elevated consumer demand, the Hampton Roads industrial market boasts some of the region’s lowest vacancy rates, while net absorption continues to trend upwards. A Cushman & Wakefield report for the first quarter reveals the region had a 3.2 percent vacancy rate, as well as 795,000 square feet of positive net absorption.

Meanwhile, the market had more than 3.2 million square feet of industrial space under construction. In April, W.M. Jordan Development began construction of 460 Commerce Center, a 352,000-square-foot project in Windsor, Va.

One of the largest planned developments in the region is Port 460 Logistics Center, a 540-acre, 5 million-square-foot project of Rockefeller Group and Matan Cos. Groundbreaking is expected this summer.

The post Turnbridge Equities JV Starts New Industrial Project Near Port of Virginia appeared first on Commercial Property Executive.

A CBRE team led by Bo Cashman and Jonathan Beard, along with members of CBRE National Partners, led the marketing of the 198-acre portfolio and represented the seller in the negotiations.

The Baltimore Crossroads portfolio is situated within an established industrial park along the I-95 Corridor and dissected by Route 43 in the Baltimore East Industrial submarket. The portfolio, which also has excellent accessibility to the Port of Baltimore, is currently 97 percent leased to national and regional tenants.

The properties in the portfolio are 1405, 1409 and 1411 Tangier Drive and 11501, 11503 and 11505 Pocomoke Court. The buildings range in size from 42,275 square feet to 435,490 square feet.

READ ALSO: How Logistics Developers Can Surmount Inventory Hurdles

The submarket has availability of 3.6 percent and high barriers to entry, according to CBRE. Tenants, particularly big-box occupiers, are attracted the submarket because of its central location, nearby ports, robust regional infrastructure, labor pool and high population concentration within 100 miles. CBRE noted Baltimore saw a nearly 30 percent year over year increase in big-box leasing activity leasing activity in 2023 alone.

Despite the Port of Baltimore being closed from March 26, when a large container ship struck and collapsed the Francis Scott Key Bridge, through June 10, the Baltimore industrial market remained resilient. CBRE’s second-quarter industrial report for Baltimore stated the market performed well during the second quarter, recording its best quarter for absorption since the fourth quarter of 2022. Leasing was up 87 percent across the market quarter-over-quarter including a new lease for 129,465 square feet at 6301 New Cold Mill Road in the Baltimore East submarket inked by Windspeed Logistics. 

Recent EQT deals

Radnor, Pa.,-based EQT Exeter has been an active investor in the industrial sector. Last month, the global real estate investment manager acquired four properties totaling 365,000 square feet, part of Gayteway Business Park in Arlington, Wash., for $70.6 million from GS Venture Partners, according to CommercialEdge data. The assets were fully leased at the time of the purchase.

In May, the firm paid Prologis more than $284.6 million for a 5.1 million-square-foot industrial portfolio in metro Minneapolis-St. Paul. A month earlier, EQT made two industrial deals. The firm acquired a 641,906-square-foot Phoenix-area industrial asset from BET Investments for $60.1 million. It also purchased an 819,004-square-foot industrial facility in Fontana, Calif., for $197 million from Manulife Investment Management.

The post Behind EQT Exeter’s $141M Portfolio Buy appeared first on Commercial Property Executive.

The firm didn’t comment specifically about the phase, but in April said the scale of Reston Town Center’s retail offerings, its suburban location near where the tech-heavy tenant base’s employees want to live, and ample tenant parking in lieu of commuter parking can help office space thrive.

The public transportation Metro system is directly across Sunset Hills Road from the Reston Town Center Metro station, but the firm said flagging ridership is not a primary factor in this decision.

Redeveloping 1980s-era buildings

The company this week has proposed redeveloping two 1980s-era buildings and a surface parking on about a dozen acres with five new buildings totaling about 2.1 million square feet, according to application documents filed with Fairfax County.

READ ALSO: Sizing Up the Prime Office Building Landscape

The application calls for 930,000 square feet of new office space, up 45 percent from the 643,000 square feet previously approved. That’s “a unique proposal in Fairfax County during a time when the office market is undergoing significant contractions,” according to one of the filings.

Reston Town Center has shown to be a relative success as an office hub. CBRE reports overall office vacancy in Reston at 26.9 percent while Reston Town Center was 96 percent leased as of March 31, according to The Washington Business Journal’s Dan Brendel.

The company intends to reduce the restaurant, retail, hotel and residential uses in the second phase by about 371,000 square feet, or 23 percent and 310,000 square feet of previously approved hotel have been removed from earlier approved plans.

First expansion since 2018

Dubbed Reston Next, the major expansion of Reston Town Center received its most recent approval in 2018. The first phase is nearly complete and includes two trophy offices, a hotel and a multifamily building.

On the southern part the property near the Metro station, two office-over-retail buildings of 529,000 square feet and 409,000 square feet, respectively, are shown on its site drawings.

The northern part would feature three residential towers, two with ground-floor retail, together comprising nearly 1,100 units across 1.2 million square feet. A park, some small retail buildings and a central open space with options for commercial, retail and/or civic uses would sit in the middle.

The post Boston Properties Pitches More Office in NoVa appeared first on Commercial Property Executive.

The Mid-Atlantic 81 Logistics Park is a 150-acre industrial park on Interstate 81 mid-way between Hagerstown, Md., and Winchester, Va., in the I-81 industrial corridor of the North Shenandoah Valley market. The building that TREX will occupy was built by Equus as a speculative development and completed in late 2023.

READ ALSO: How Logistics Developers Can Surmount Inventory Hurdles

The TREX lease brings the three completed buildings in the Mid-Atlantic 81 Logistics Park to 100 percent occupancy. Previously, Equus completed build-to-suit developments for Procter & Gamble (356,000 square feet) and Clorox (580,000 square feet).

Both of those projects are warehousing facilities that support local manufacturing operations for their respective manufacturing giants. One more pad in the park is undeveloped: a 25-acre parcel which is fully engineered and approved for a 369,000-square-foot industrial building.

Equus has been an active industrial investor and developer recently. In March, a fund sponsored by the company acquired a nine-property, 1.4 million-square-foot industrial portfolio in the Charlotte and Piedmont Triad industrial markets in North Carolina for $124 million.

Late last year, aerospace giant Northrop Grumman Corp. said it will invest more than $200 million to establish a new 315,000-square-foot advanced electronics manufacturing and testing facility in Waynesboro, Va. Equus will develop that facility for Northrop.

North Shenandoah Valley industrial absorption strong, development weak

During the first quarter of 2024, the North Shenandoah Valley industrial market experienced 2.3 million square feet of absorption, according to Colliers, almost all of which was for warehouse space. That was a surge from the same quarter a year earlier, when absorption was 800,000 square feet.

At the end of the quarter, just under 1.7 million square feet of space was underway in the market, which represents not only a drop from the previous quarter’s total of 2.7 million square feet, but a virtual collapse compared with a year earlier, when 10 million square feet of industrial was underway, Colliers reported.

The industrial vacancy rate decreased by 150 basis points in the first quarter of 2024, ending the quarter at 12.1 percent. This is up from 6.2 percent a year ago, due to the delivery of a substantial amount of new product in the interim, noted Colliers.

The post Equus Capital Lands New Tenant in West Virginia appeared first on Commercial Property Executive.

Fundamentals were a mixed bag for the Washington, D.C., office market in the first four months of the new year, except for investment activity, which grew significantly since last year, according to the latest CommercialEdge data.

Nationwide, the upcoming maturities for office debt are a major concern for players in the sector, a recent Commercial Property Executive special report shows. Roughly $615 billion in office loans are expected to mature over the next five years, leading to owners and investors scrambling to reduce their exposure.

This could explain why D.C. office sales started to increase at a significant pace since last year, with companies looking for opportunities to convert, redevelop or reposition these assets. Over the first four months of the year, the metro recorded $937 million in sales, up 66.0 percent year-over-year and clocking in the number one spot among all major metros tracked by CommercialEdge.

Construction slows to a crawl

In April, metro Washington, D.C., had 3.3 million square feet of rentable office space under construction across 19 properties. This accounted for 0.9 percent of existing stock, 60 basis points below the national figure.

Construction activity in the capital remained sluggish and well below most other gateway markets—except Chicago (0.3 percent of stock) and Manhattan (0.6 percent). Development was strongest in Boston (5.6 percent) and San Francisco (3.2 percent).

The largest office asset underway in the metro was the nearly 400,000-square-foot 600 Fifth St., which topped out last month. Developers Rockefeller Group and Stonebridge expect the $375 million project to be complete by 2026.

Year-to-date through April, three properties—encompassing 435,428 rentable square feet—came online in Washington, D.C. This was a decrease to less than half of the amount recorded in the same period last year. Meanwhile, nationwide completions were down by only 1.5 percent.

A few gateway markets stood out with significant office space coming online in this period, including Boston (1.4 million square feet), San Francisco (1.4 million square feet) and Chicago (875,000 square feet). However, the nation’s capital outperformed Manhattan (57,000 square feet), Los Angeles (303,175 square feet) and Miami (10,860 square feet).

The largest office asset that came online in D.C. year-to-date through April was the 237,000-square-foot Building 4 of Reunion Square in the Northeast D.C. submarket. Four Points LLC and Curtis Development are continuing work at the master-planned Reunion Square project, which is slated to total 1.5 million square feet. Of the total, 950,000 square feet will be office space, alongside a 130,000-square-foot retail component and 480 multifamily units.

Developers broke ground on a single, 210,622-square-foot property in the first four months of the year in the metro, on par with the same low activity recorded last year.

D.C. office investment volume outpaced all other major metros

Washington, D.C., office investment led activity nationwide, with $937 million in sales volume recorded through April, up 66.0 percent year-over-year. A total of 21 properties changed hands, 14 of which were conventional sales, encompassing more than 4 million square feet of space. This was a sharp increase from the 2.2 million square feet that traded in the same period last year.

The assets sold at roughly $345 per square foot on average, which was more than double the nation’s $157 figure. These were some of the priciest investments in the U.S., as only a handful of other markets recorded a higher average price per square foot—Manhattan ($351), Los Angeles ($359) and San Francisco ($407).

One significant deal was Quadrangle Development Corp.’s $95 million acquisition of 1099 New York Ave. NW. Credit Suisse sold the downtown asset two months ago for approximately $536 per square foot—among the highest rates recorded in these first four months.

The incoming wave of office debt maturity looms over Washington, D.C., as well—it amounted to nearly $52 billion in October last year. Owners and investors are looking to refinance and reposition assets, with new deals emerging. One recent example was Monday Properties’ $205.5 million refinancing of two office properties. Citi Real Estate provided the two, 5-year CMBS loans, of $173 million and $32.5 million.

A few significant leases help buoy the market

The Washington, D.C. office market’s vacancy rate was at 16.8 percent in April, 200 basis points lower than the national figure. The capital also continued to outperform most other gateway markets, including Manhattan (17.6 percent), Chicago (19.1 percent) and Seattle (23.0 percent).

The most significant lease deal year-to-date through April was an extension. Washington Post renewed its 300,000-square-foot agreement with Hines at One Franklin Square. The media publisher and paper of record has been a tenant there since 2016.

When it comes to new deals, they were a bit scarcer and smaller. For example, Monday Properties signed a new tenant at its 1812 N. Moore St. property in April. Graham Holdings Co. will occupy the entire 21st floor, a total of 24,023 square feet. JLL negotiated the 15-year agreement.

Coworking stays in shape

D.C.’s office market retained a significant portion of shared space inventory—some 3.3 million square feet in April, which accounted for 1.6 percent of the total office stock. This share was on par with the 1.8 percent national figure, as well as Boston’s 1.8 percent and just below Chicago’s 1.9 percent. Other gateway markets with more significant coworking segments included San Francisco and Seattle (2.0 percent each), Los Angeles (2.2 percent), Manhattan (2.5 percent) and Miami (3.7 percent).

WeWork continued to have the largest share of the coworking market, with nearly 800,000 square feet across 10 properties. Rounding out the top three were Industrious (500,000 square feet) and Regus (480,000 square feet).

The post Strong Start for DC Office Sales, But Other Fundamentals Lag appeared first on Commercial Property Executive.

Dallas-based Novel Office has sold Fair Oaks Plaza, a 183,810-square-foot Class A office building in Fairfax, Va., to a private buyer. The deal comes less than two years after the current seller acquired the eight-story asset located about 20 miles outside of Washington, D.C.

Institutional Property Advisors, a division of Marcus & Millichap, arranged the transaction. Financial details were not disclosed. IPA has previously worked with the private investor on other transactions.

Novel Office had acquired the property in September 2022 for $23.5 million and secured a $13.2 million, 10-year loan from First Financial Bank of Abilene, Texas, according to CommercialEdge data.

READ ALSO: DC Office Deliveries Ranked High in 2023

Built in 1985, the asset was renovated in 2010 and in 2022. Novel Office also completed renovations of the lobby within the past year.

Amenities at Fair Oaks Plaza include a conference center, fitness center, café and convenience store, lower-level storage, outdoor seating and 118 spaces in a covered parking structure. Floorplates at the glass and masonry building encompass 21,125 square feet.

Located at 11350 Random Hills Road in the Fairfax Center submarket, the 5.4-acre property is less than 1 mile from the interchange at Route 50 and Interstate 66. The office building is close to several Metro stations including Vienna/Fairfax-GMU as well as stations for the commuter rail service, Virginia Railway Express. The property is less than 14 miles from Washington Dulles International Airport and about 22 miles from Ronald Reagan National Airport.

IPA’s Senior Vice President Investments Robert Filley led the transaction, alongside IPA Senior Associate Chandler Pace and Marcus & Millichap Senior Managing Director Investments Stacey Milam.

Tenant activity

Fair Oaks Plaza was 90 percent leased at the time of the sale and has been successful in attracting tenants from Tysons, Va., and other surrounding submarkets, according to IPA. CommercialEdge reported there are 20 leases at Fair Oaks Plaza. The roster includes several law firms such as Mahdavi, Bacon, Halfhill & Young and McCandlish Lillard.

Other tenants listed at the address are Active Family Wellness, The Redux Group, Real Property Management Pros and Mindful Psychological Health. Regus Group also operates a shared office/flex office space at the property.

Earlier this year, Novel Office was active in its home state of Texas, acquiring 3555 Timmons, a 225,895-square-foot office building in Houston from Unilev Capital. The 15-story building, constructed in 1982, had previously traded in 2012.

The post Northern Virginia Office Building Changes Hands appeared first on Commercial Property Executive.

BGR Group has renewed and expanded its lease at the Homer Building in Washington, D.C. The lobbying and public affairs firm will occupy more than 40,000 square feet at the historic 12-story, 460,000-square-foot property owned by Mitsui Fudosan America Inc. Transwestern represented the tenant, while JLL negotiated on behalf of the landlord.

MFA, the U.S. subsidiary of Japan’s largest real estate company, Mitsui Fudosan Co., acquired an 80 percent stake in the asset in late 2011 from Investa, which had owned the controlling interest since 2005. Commercial Property Executive reported at the time that Kann Sons Co. and 13th and G Street Ltd., an Akridge entity, each owned a 10 percent stake in the property.

READ ALSO: The Case for Vintage Office Properties

Located three blocks from the White House and directly above the Metro Center station in the D.C.’s East End neighborhood, the 110-year-old iconic office building at 601 13th St. NW is slated to undergo a $25 million renovation plan. The previous refurbishment was completed in 1990 by Akridge, a D.C.-based commercial real estate services company and the asset’s property manager.

Renovations and leasing activity

The Homer Building came online in 1914, according to CommercialEdge information. The LEED Gold-certified property features 38,000-square-foot floorplates and some 45,400 square feet of retail. Amenities include a 12 story, sky-lit atrium, landscaped rooftop terrace, fitness center and valet parking, among others.

The renovation process will add several new tenant amenities. Upgrades will include a new two-story boardroom for more than 150 people that will be built in the atrium lobby, as well as an indoor glass enclosure that will be added to the roof terrace, available for meetings and events.

Industrious is one of the building’s tenants, having leased 40,653 square feet on the 12th floor. SMBC and Rio Tinto also inked new lease agreements over the past 12 months for The Guerry, pre-built spec suites on the property’s ninth floor.

Evan Behr, Doug Mueller, Jeanette Ko, Kristen Mathis and Meghan Murray comprised the JLL team that represented MFA in the transaction with BGR. Transwestern’s John Schlegel and John Lugar represented BGR.

MFA’s U.S. growth

Headquartered in New York City, MFA has offices in San Francisco, Los Angeles, Dallas and Honolulu. The firm currently owns almost 10 million square feet of commercial space with more than 4 million square feet in development as well as hospitality and residential assets.

In Manhattan, MFA completed the 58-story 50 Hudson Yards office tower in October 2022. The firm owns the majority interest in both 50 Hudson Yards and 55 Hudson Yards, part of the Related Cos. and Oxford Properties Group’s $25 billion Hudson Yards project on the Far West Side.

In Washington, D.C., MFA also owns 1200 17 St. NW, an 11-story, 170,000-square-foot office building developed with Akridge and completed in September 2014.

More recently, the company has been expanding its presence in the U.S. industrial market. Earlier this month, MFA and Tishman Speyer acquired a 60-acre site in Peabody, Mass., with plans to redevelop it with four warehouses totaling about 700,000 square feet. In January, the partnership acquired a 32-acre development site in Irvine, Calif., where it will develop four industrial buildings.

The post Mitsui Fudosan Inks Office Lease at DC Trophy Asset appeared first on Commercial Property Executive.

Williams Mullen has extended its lease at 200 S. 10th St. in downtown Richmond, Va. The regional law firm has been anchoring the 15-story, 207,000-square-foot office building known as the Williams Mullen Center since its 2010 completion.

MEK Management Services Inc., acting on behalf of the building’s ownership, Kireland South 10th Street LLC, had agreed to extend the remaining term of the law firm’s lease by seven years.

The negotiation was executed well before the initial expiration date, as the previous 148,911-square-foot commitment was to expire in 2028, according to CommercialEdge information.

READ ALSO: Law Firm Office Leasing Continues to Rise

Other terms of the deal were not disclosed. However, the tenant’s leadership stated, in prepared remarks, that the firm had achieved its goal of remaining at the Williams Mullen Center with a much-improved financial arrangement.

Jamie Galanti and Thomas Hatcher of Commonwealth Commercial Partners consulted for Williams Mullen during the lease negotiations. Trib Sutton of Divaris Real Estate Inc. represented the landlord.

A Richmond office tower

Virginia Beach, Va.,-based Armada Hoffler developed the office tower at the corner of 10th and Canal streets in the central business district to serve as the Richmond home of Williams Mullen. When the developer sold it in January 2016 for $78 million, the building was 98 percent leased and Williams Mullen occupied 82 percent of the space.

Williams Mullen Center has approximately 5,500 square feet of ground-floor retail space, 210 surface parking spaces and 900 covered parking spaces. Other tenants of the building include others law firms like Holland & Knight and professional and financial services firms such as Agincourt Capital Management and Rockefeller Capital Management.

The office tower is adjacent to Kanawha Plaza and just a few blocks from the Virginia State Capitol. The property is an easy walk to hotels, shops, residential buildings, restaurants, the James River Park System and Canal Walk. The building has direct access on and off the I-195 expressway.

Office leasing, close to historical averages in Richmond

While the Richmond office market ended the first quarter of 2024 at a 15 percent vacancy rate, the market has shown resilience and leasing activity has been close to historical averages from 2020 to 2023, according to a Newmark report. There was positive leasing activity in the first quarter of 2024 with four of the top five transactions being new leases.

One of the new leases was in the CBD, where Atlantic Union Bankshares inked a direct lease for 18,586 square feet, Newmark data shows. Innsbruck remained Richmond’s most popular submarket.

The post Law Firm Extends Lease at Richmond Office Tower appeared first on Commercial Property Executive.

DSC Partners, in a joint venture with Harbert Management Corp., has acquired Forbes Center, a 785,000-square-foot portfolio in Lanham, Md. The 17-building collection includes industrial, flex and office assets that sold for a total of $86.4 million.

The tenant mix at Forbes Center includes local distribution, government contractors and medical providers, as well as local and national service providers.

Going forward, Transwestern will provide property management services. In addition, the KLNB team of Principals Robert Pugh and Ken Fellows, alongside Transaction Manager Keiry Martinez and Office & Industrial Specialist Aaron Carroll, will handle leasing.

A flex, office and industrial portfolio near Washington, D.C.

The largest property in the Forbes Center portfolio is Beco Park, a campus featuring flex, office and industrial buildings totaling some 650,000 square feet. Its previous owner was BECO Management, according to CommercialEdge information.

The buildings came online between 1983 and 2000 and feature floorplates ranging between 22,642 and 54,692 square feet. The complex has controlled access, a fitness center, a conference center and ample parking. Its tenant roster includes Applied Industrial Technologies, Bota Consulting Engineers, Maryland Community Connection, Lladner Business Solutions and Mental Matters Clinical Services, among others.

READ ALSO: Getting Into the Heads of Tenants

Beco Park at Forbes Center is just north of U.S. Route 50 and has access to Interstate 495. Downtown Washington, D.C., is less than 13 miles away.

Since its inception in 2017, DSC Partners has acquired and developed more than $600 million worth of commercial real estate properties in the Mid-Atlantic area, in markets located in Washington D.C., Maryland and Virginia.

One of DSC’s developments is Deepwater Industrial Park, a three-building campus encompassing nearly 1.5 million square feet in Richmond, Va. The firm broke ground on the 110-acre project in 2021, in partnership with Hourigan, and completed it last year.

The post DSC Partners JV Wraps $86M Suburban DC Buy appeared first on Commercial Property Executive.

With demographic depth and wealth surrounding the property in Prince William County, this oversized 110-acre hub at approximately 665,000-square-foot is considered irreplaceable regionally.

Virginia Gateway is approximately 95 percent occupied and features strong tenant sales and high traffic counts in an affluent and growing market.

Jeff Brown, founder & CEO of T2 Capital Management, tells CPE that a purchase at this scale further helps to provide solid footing within the commercial real estate market at large.

READ ALSO: How Retail Properties Are Getting Greener

“Although distressed situations—primarily in the office market—currently dominate headlines, it is well-located, prudently leveraged assets like Virginia Gateway that are quietly underpinning growth and a healthy transaction volume,” Brown said. “It is reasonable to anticipate other grocery-anchored retail centers like this will continue to thrive.”

Affluent customers, strong sales

Located just west of Loudoun County and about 35 miles from Washington, D.C., Gainesville’s growing population is supported by an influx of higher-paying jobs. The average household income within a 3-mile radius of the property exceeds $184,000, surpassing the company’s in-place portfolio average, according to a release.

Additionally, Virginia Gateway has convenient access to the Dulles Technology Corridor, known for its concentration on defense contracting and tech jobs. It sits at the intersection of Route 29 and I-66.

In 2023, the property ranked No. 3 in the state for annual visits, according to Placer.ai, just behind Tysons Corner.

FRIT said the center’s tenant sales are strong across categories, particularly in food and beverage.

Virginia Gateway features a mix of tenants and experiences organized into five components, including a Giant Food grocery-anchored shopping center; the Promenade featuring national specialty retailers and dining options; a pedestrian-oriented Atlas Walk town center; Plaza I & II featuring major retailers like HomeGoods and Ulta Beauty; and Plaza IV, anchored by Total Wine & More and Hobby Lobby.

The property benefits from shadow-anchors such as Lowe’s, BJ’s Wholesale Club and Super Target.

Virginia Gateway has approximately 300,000 square feet of small shop space, which is expected to drive future growth.

Federal Realty is a leading owner, operator and redevelopment firm of high-quality retail-based properties located in major coastal markets from Washington, D.C., to Boston, San Francisco and Los Angeles.

The post Federal Realty Pays $215M for NoVa Retail Center appeared first on Commercial Property Executive.

A real estate fund managed by Ares Management has purchased Middletown Logistics Center, a 251,200-square-foot industrial building in Middletown, within the East Shore of Harrisburg, Pa.

The facility changed hands for $38 million, according to Dauphin County records. JLL marketed the property for sale on behalf of Endurance Real Estate Group and procured the buyer.

Middletown Logistics Center is a recently completed, fully leased Class A industrial asset located at 2070 N. Union St. The warehouse features 36-foot clear heights, 42 loading doors, one drive-in door, 193 vehicle parking spots and 33 trailer parking spots.

READ ALSO: Property Management Success: Cool Heads for Cold Storage

The 18-acre property is close to Interstate 76 and Harrisburg International Airport, as well as 11 miles from Harrisburg and 13 miles from Capital City Airport. Philadelphia is also a roughly 2-hour drive away. 

JLL Vice Chairman Jeff Lockard, Senior Managing Director John Plower, Director Ryan Cottone and Associate Zach Maguire worked on behalf of the seller. The same team also secured a long-term lease prior to the building’s completion. Canada-based IPEX is fully occupying Middletown Logistics Center, CommercialEdge shows.

A closer look at Harrisburg’s pipeline

There are currently 13 industrial projects under construction in the Harrisburg area, totaling some 3.4 million square feet, according to CommercialEdge information. Nearly all of them are expected to come online in 2024.

A significant industrial project expected to come online this year in the Harrisburg area is PCCP’s 674,000-square-foot industrial park in York, Pa. Developed in partnership with MRP Industrial, the two-building campus is scheduled to come online in the third quarter of 2024, with Cushman & Wakefield marketing the property for lease.

The post Ares Management Pays $38M for Pennsylvania Asset appeared first on Commercial Property Executive.

Though planned since well before the March 2024 agreement to keep the Washington Wizards and Capitals at nearby Capital One Arena, the redevelopment stands to benefit from $515 million in new public outlays in the neighborhood over the next three years, not only to upgrade the arena, but to improve nearby infrastructure, according to Douglas Firstenberg, a principal at Stonebridge.

Putting the steel in place was more than a ceremonial act, since it will form an essential part of the building’s 12th floor, which will provide a tenant-amenity space that includes 15-foot ceilings and outdoor terraces that offer views of the U.S. Capitol. Such amenities are a selling point for the building. Others include open-air terraces on every other floor, a new energy-efficient glass curtain wall and a new public park near the building.

READ ALSO: How Tech Tenants Grapple With Return-to-Office, Costs

In 2020, property owner Washington Metro Area Transit Authority tapped Rockefeller Group and Stonebridge to redevelop the eight-story, 1974-vintage building on a city block into a modernized, 400,000-square-foot structure.

Rockefeller and Stonebridge inked a 99-year ground lease in 2023 with lessor Metro to facilitate the project, which has been able to move forward despite market doldrums. About half of the space at 600 Fifth Street NW is now preleased, with most of that—almost 200,000 square feet—taken by law firm Crowell & Moring as the building’s anchor.

Even if it weren’t the only major office project in D.C., the redevelopment would stand out for its city-block size, which is unusual for an office building in the District. To reach the topping out, work crews have placed over 747 tons of structural repositioning steel, 1,073 tons of overbuild steel on top of the existing structure, and 3,700 cubic yards of concrete, notes Clark Construction, which is building the structure. Some 9,800 tons of debris have been removed.

DC office development essentially on hold

During the years just before the pandemic, roughly 3 million square feet of new office space was developed per year in Washington, D.C., with the total tapering off further each year after 2019, according to JLL data.

As of the first quarter of 2024, only 734,000 square feet were under construction, much of it at 600 Fifth Street NW. The D.C. office market saw net negative absorption of about 423,000 square feet in the first quarter of 2024, and vacancies now stand at 19.5 percent.

On the other hand, first-quarter leasing was relatively strong, according to JLL, with law, media and tech tenants taking about 60 percent of the quarterly lease volume of 1.8 million square feet. Some 39 leases over 10,000 square feet were signed during the first quarter.

The post Rare $375M DC Office Project Tops Out appeared first on Commercial Property Executive.

MCB Real Estate, of Baltimore, will lead the development for VIVA White Oak, a long-delayed mixed-use project in Silver Spring, Md. Groundbreaking is expected in the second half of 2025.

The county has already approved the 280-acre site for more than 12 million square feet of development. The property is adjacent to the U.S. Food and Drug Administration headquarters and near the Adventist HealthCare White Oak Medical Center, with direct access to U.S. Route 29.

READ ALSO: Life Science Prospects Are Looking Up

The developer is currently working with stakeholders and public officials to refine the master plan. As of now, it calls for more than 6 million square feet of retail and office spaces with a focus on the life sciences sector, which implies the presence of R&D facilities and biomedical/biotech labs. In addition, there will be up to 4,500 residences and more than 85 acres of open space, including forested nature trails, parks and other public spaces.

Global LifeSci Development Corp., an affiliate of Percontee Inc., is a minority partner in the project.

A decade in the making

A decade ago, Global LifeSci partnered with Montgomery County for the development of VIVA White Oak. The mixed-use campus was initially slated to comprise some 7 million square feet and cost around $3 billion. The partners held a groundbreaking ceremony in 2018, followed by the demolition of some of the site’s existing structures.

However, the project never moved forward due to insufficient financing, as it wasn’t economically justified. Despite the development being considered ‘ready to go’, land entitlements were not complete for any segment of the project to qualify for a building permit.

Space plus time

During a panel discussion with other life science real estate executives at a RevistaLab event, Wilkingson Germain, CEO of MCB Science+Health, described VIVA White Oak as more of a 20-year endeavor than a five-year project.

Germain envisioned the development’s medical office component near or adjacent to the Advent Health side of the site. The life science campus, expected to total approximately 2 million square feet, would be located on the FDA side.

He explained, “There are a lot of groups that want to be close to the FDA and want to be part of some of the partnerships the FDA can provide, so I think there are also research institutions that want to be connected to a project like this.”

Just two weeks ago, a joint venture of MCB Real Estate and Generation Properties broke ground on a $115 million mixed-use project in Waldorf, Md., in metro Washington, D.C. On completion in spring 2026, The Shops at Fairway Village will comprise 120,000 square feet of grocery, retail and restaurant space, as well as 186 residential units.

The post 12 MSF Mixed-Use Project Moves Forward appeared first on Commercial Property Executive.

Rockefeller Group has started construction on Rockefeller Group Logistics Center at Carneys Point, a two-building, more than 1.1 million-square-foot campus in Carneys Point, N.J. This marks the company’s second industrial project in Southern Jersey, following the development of a 345,600-square-foot warehouse in Mount Holly, N.J.

Sumitomo Mitsui Trust Bank provided a $114.8 million construction financing for the project, CommercialEdge data shows.

Partners on the development include M + H Architects and civil engineer Langan Engineering & Environmental Services, while FCL Builders serves as general contractor. Slated for completion in early 2025, the project features significant infrastructure enhancements that will benefit the region.

READ ALSO: How Much Longer Is ‘Higher for Longer’?

The developer consolidated the 141-acre site from 13 distinct parcels acquired from 11 different sellers, completing the purchase in 2022. Curran Commercial President Ryan Curran represented the buyer in the transactions and land assemblage.

A well-located industrial campus

The 596,443-square-foot Building A will feature 127 dock-high loading doors and four drive-in doors, together with 122 trailer stalls and 363 parking spaces. Building B will measure 530,000 square feet and have 118 dock loading doors, four drive-in doors, 295 car spots and 206 trailers spaces.

Both warehouses are set to feature 40-foot clear heights, 60-foot bay spacing and 10,000 square feet of speculative office space. CBRE Senior Vice President Drew Green, Vice Chair Thomas F. Monahan, along with Executive Vice Presidents Larry Schiffenhaus and Brian Golden, are conducting the leasing efforts.

The campus is rising at 37 Forest Lane, the location providing easy access to Interstate 295 and Highway 40. Downtown Philadelphia is 34 miles away, while Port of Wilmington is within 15 miles. The site is also less than 24 miles from the Philadelphia International Airport.

Rockefeller’s industrial expansion across the U.S.

Rockefeller Group currently has 16 industrial projects under development across the U.S., totaling some 6 million square feet. The company has delivered 38 logistics properties since its inception.

Last month, Rockefeller Group and PCCP LLC obtained $100.2 million in construction financing for the development of Rockefeller Logistics Center on the Boulevard, a two-building, 656,904-square-foot industrial campus in Northeast Philadelphia. The speculative project broke ground in December and is anticipated to come online in 2025.

In November, the company partnered with Matan Cos. to develop a 5 million-square-foot logistics center in Suffolk, Va. The $300 million project will come online in multiple phases, the first one to comprise 2.4 million square feet across five buildings.

The post Rockefeller Group Breaks Ground on 1.1 MSF New Jersey Campus appeared first on Commercial Property Executive.

A joint venture between MCB Real Estate and Generation Properties has broken ground on The Shops at Fairway Village, a $115 million mixed-use project in Waldorf, Md., near Washington, D.C. Upon its expected completion in Spring 2026, the property will comprise 120,000 square feet of grocery, restaurant and retail space, along with 186 residential units.

Weis Markets, Eggspectation, Hair Cuttery, KinderCare Learning Centers, McDonald’s, Heartland Dental and Saleya Nail&Spa have already preleased a total of more than 90,000 square feet, representing 76 percent of the retail square footage. Delivery for The Shops at Fairway Village is expected in the fall of 2025.

READ ALSO: Retail’s New Logistics Logic

Construction on the residential portion of the project will start at the beginning of next year. The mixed-use development is slated to support more than 300 jobs and provide housing for nearly 450 residents.

The development site is at 1130 Billingsley Road, near the intersection with St. Charles Parkway. The retail center is slated to serve roughly 50,000 individuals across 20,000 households with an average income of approximately $132,000, according to MCB.

Shifting markets, shifting plans

MCB and Generation assumed control of the property in 2020 and purchased the site last year. Plans for The Shops at Fairway Village originally called for a 300,000-square-foot commercial development. However, following shifts in the dynamics of retail and residential markets, the project was downsized and restructured to accommodate for mixed commercial and residential purposes.

Charles County’s population grew by 11.4 percent over the last 14 years, increasing demand for housing. The addition of 186 new residences ought to bolster the market’s inventory, aiming to accommodate professionals in education, finance, and technology sectors, MCB Principal Drew Gorman stated in prepared remarks.

The addition of the residential element as infill development also works as a tactic to boost activity in the retail center and extend the time people spend there, as the residences will be within short walking distance, Gorman added.

The post MCB, Generation Properties Break Ground on DC-Area $115M Mixed-Use appeared first on Commercial Property Executive.

Blenheim Group has broken ground on Bayberry Town Center, a 280,000-square-foot mixed-use project in Middletown, Del., a Philadelphia suburb.

Upon completion, the property will comprise nearly 249,000 square feet of retail and 31,000 square feet of office space, together with 145 townhomes, retail pad sites and two green areas.

Bayberry Town Center represents the final phase of development for the 1,500-acre Village of Bayberry master-planned community, which boasts almost 2,700 homes. Blenheim Group obtained the final site plan approval from New Castle County Council in March.

READ ALSO: Designing the Suburbs of the Future

Weis Markets will anchor the property’s retail component with a 64,000-square-foot flagship store and a gas station. Slated for groundbreaking this fall, the store is expected to open next year.

Bayberry Town Center’s tenant roster is set to also include a bank, pet store, spa and nail salon, along with several restaurants. LMT Commercial Realty Principal Jim Tancredi and Sales and Leasing Agent Tyler Foresta are handling the leasing efforts.

The development site occupies more than 69 acres at the intersection of Boyds Corner and Jamison Corner Road. Downtown Wilmington, Del., is less than 30 miles northeast, while downtown Philadelphia is some 55 miles away.

The post Blenheim Group Kicks Off Philly-Area Mixed-Use Project appeared first on Commercial Property Executive.

In its first Virginia purchase, Continental Realty Corp. has acquired Gayton Crossing, a 160,830-square-foot neighborhood shopping center in Richmond, through its Continental Realty Opportunistic Retail Fund I LP. ShopCore sold the asset for $22 million, according to Richmond BizSense, with the assistance of JLL.

The retail property previously traded in 2019 for $29 million, CommercialEdge data shows. Developed by S.L. Nusbaum Realty Co. and Woolfolk Properties in 1981, Gayton Crossing comprises six buildings spread on some 15 acres. The shopping center also includes five free-standing pad sites and a free surface parking lot equating to nearly 700 parking spaces.

READ ALSO: Retail’s New Logistics Logic

Shadow-anchored by Kroger, Gayton Crossing also features a diverse mix of national and regional retailers such as Bank of America, GOLD’S Gym, Goldfish Swim School, Jos. A. Bank, KidStrong, Starbucks Coffee, Virginia ABCstore and The UPS Store.

Located at 9782 Gayton Road in the Far West End submarket, Gayton Crossing serves more than 100,000 individuals and 75,000 households within a 5-mile radius, with the average household income exceeding $135,000, according to CRC.

JLL Managing Directors Jordan Lex and Dean Sands, together with Director Danny Naughton, represented ShopCore.

CRC’s comprehensive portfolio

CRC purchased Gayton Crossing through CRORF, the closed-end fund for which $296 million have been raised. Since its inception, the investment vehicle has funded the acquisition of 12 retail properties totaling approximately 2.7 million square feet of space.

One of these assets was South Coast Collection, a 292,000-square-foot luxury lifestyle center in Costa Mesa, Calif. Its purchase marked CRC’s entrance into the Southern California market.

CRORF also funded the acquisition of a 460,000-square-foot, super-regional retail center in Lakeland, Fla., for $78 million. That property encompasses 20 buildings on an 88-acre site.

CRC is active in 11 states with more than $3.7 billion in assets under management. Since the start of 2021, the firm has amassed nearly $600 million in retail real estate assets.

The post CRC Enters Virginia With Richmond Retail Center Buy appeared first on Commercial Property Executive.

Arlington, Va.,-based Taicoon Property Partners has acquired a 12-story, 152,000-square-foot office building at 1899 L St. NW in Washington, D.C.’s Central Business District for approximately $26.7 million and is planning to renovate the mixed-use asset.

1899 L was sold at a steep discount by longtime owner BlackRock, which acquired the 46-year-old building in 2004 for $43.7 million, Commercial Observer reported. The assessed value of the building was $66.6 million for 2024 and $77.3 million for 2023, according to CommercialEdge data.

Stream Realty Partners represented Taicoon Property Partners in the acquisition with Managing Directors Charlie Smiroldo and Matt Pacinelli leading the buyer representation. Collins Ege and Bradley Allen of Eastdil Secured represented the seller and facilitated the transaction.

In addition to advising on the acquisition, Stream also serves as the leasing agent for the building, which has 63,100 square feet available, according to CommercialEdge. Office suites available for lease range from 2,500 square feet to 13,000 square feet.

There are eight tenants in the building including Heifer International; Checchi Consulting; American Constitution Society; ANSI; Raffia, PC, Care; M&T Bank and one medical office, Advanced Endodontic Associates D.C.

Located along 19^th Street’s “Restaurant Row,” the building has 15,000 square feet of retail.

Renovating and Repositioning

The new owners are planning renovations to reposition the building. Future renovations will include an updated façade, enhanced restrooms and common areas, redesigned retail storefronts and a comprehensive modernization of the building’s amenities and infrastructure. The LEED Silver-certified building has three passenger elevators and 11,700-square-foot floor plates.

READ ALSO: Designing an Office Experience That Feels Like Home

Previous renovations completed in 2022 included the main lobby, elevator cabs, a chilled beam mechanical system, conference center, fitness center and bike room.

The property has a total of 106 subterranean parking spaces. It is located less than a half-mile from two Metro subway stations.

D.C. Office Market

1899 L is not Taicoon Property Partners’ only recent office purchase in the Washington, D.C., metro. The real estate development company acquired 1501 Langston Blvd., in Arlington, Va., in June 2023 from The Air & Space Forces Association for approximately $16.3 million. The AFA headquarters had been located in the 85,422-square-foot building since 1984. AFA is leasing back its 28,715-square-foot office space there until later this year.

Leasing activity in the Washington, D.C., office market rose in the first quarter of 2024, totaling 1.7 million square feet compared to 1.3 million square feet in the previous quarter, according to Savills Q1 2024 office report. Activity was dominated by Technology, Advertising, Media, Information (TAMI), government and legal sectors. The largest lease was executed by The Washington Post, which renewed its 297,176-square-foot lease at 1301 K St. NW.

Despite the uptick in leasing activity to start the year, Savills reports overall volume is below the five-year average and availability is at a historic high. The flight to quality trend seen for several quarters across the nation is in evidence in the D.C. office market too. Savills noted trophy buildings are reporting lower availability rates, while non-trophy properties are lagging in leasing activity.

The post DC Office Building Changes Hands for $27M appeared first on Commercial Property Executive.

Hughes Network System, an EchoStar company, has opened EXM, a 140,000-square-foot manufacturing facility in Germantown, Md. The building will also serve as a private 5G incubation center.

EXM is the first such facility in the U.S. to open on a community college campus. In 2022, Montgomery College awarded exclusive development rights and a long-term ground lease for the almost 6-acre site to Minkoff Development Corp. and South Duvall Commercial Real Estate Investments.

That same year, the developers signed the agreement with Hughes Network System and broke ground on the project, using funds from a $31.2 million construction loan originated by WesBanco, according to Montgomery County records.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

The high-tech facility employs advanced robotics to manufacture satellite broadband and networking products, including the Hughes HT3000W JUPITER System satellite modem and the Hughes HL1120W Low Earth Orbit satellite terminal. Additionally, the company will secure 5G networking applications crucial to the U.S. Department of Defense.

The building is in a RISE & Opportunity zone at 19710 Observation Drive, within the Pinkney Innovation Complex for Science and Technology. The facility is also adjacent to Hughes’ headquarters at 11717 Exploration Lane and 24 miles from downtown Washington, D.C.

Metro D.C.’s industrial sector registered a 331,228-square-foot net absorption in the first quarter of this year, according to a JLL market report. Additionally, the market had almost 2.1 million square feet of space under construction during the same period, 15.9 percent of which was already preleased.

The post Satellite Services Provider Opens DC-Area Facility appeared first on Commercial Property Executive.

Marx Realty has completed the renovation of One Glover, a 110,960-square-foot office building in Washington, D.C., within the Georgetown submarket. The company’s in-house design team worked together with Studios Architecture on the project.

The news comes after the company signed a 10-year lease for 6,650 square feet with Water Street Gym, that relocated to the office building’s ground floor. Marx Realty purchased the six-story office property in 2022 for $27.7 million from seller JBG Cos., according to CommercialEdge.

One Glover is at 2121 Wisconsin Ave. NW and features 20,000-square-foot floor plates, 9,661 square feet of first-floor retail space and 203 vehicle parking spots. The reimagined office building now includes a lobby lounge with a coffee and water station, a garden room and seating spaces. The renovation also included the reimagining of the facade, now painted with an iron ore shade and featuring wood panels surrounding the entrance. Marx Realty also added an outdoor area with multiple seating options, as well as car charging stations and bicycle storage.

One Glover is situated within the Wisconsin Avenue Corridor, an area home to multiple cultural, media and technology companies. The office building is 3 miles from downtown Washington, D.C., 4 miles from Arlington, Va., 7 miles from Ronald Reagan Washington National Airport, 10 miles from Alexandria, Va. and within 23 miles of Dulles International Airport.

Other successful upgrades

Current tenants at the property include anchor tenant Nexstar Media Group, that occupies the entire third floor, George Sexton and Associates, CommuniKids and DispatchHealth. In the most recent leasing agreement at the property, Transwestern’s John Schlegel assisted Water Street Gym, while Cushman & Wakefield’s Executive Managing Directors James Collins and Mark Wooters negotiated on behalf of the landlord. The same team is overseeing leasing efforts at the property’s office space.

The completion of One Glover’s renovation follows the company’s extensive renovation of The Herald, a 114,000-square-foot office building. Marx Realty acquired the 1920s-era 10-story office asset in 2020 for $41 million, with plans to invest another $41 million in repositioning to attract tech, financial and media companies. Last year, the company signed a 12-year, 21,500-lease with public affairs firm Locust Street Group.

The post Marx Realty Completes Renovation of DC Office Building appeared first on Commercial Property Executive.

Vantage secured the funds with an initial collateral pool of eight leased and greenfield sites in new and existing markets, totaling 1.4 gigawatts of IT capacity. The structure of the green loan allows for faster time-to-market than typical construction financing and includes the option to add more assets to the credit facility.

This new round of financing brings Vantage’s total to $10 billion for 2024, already as much as the company secured throughout the entire last year. In January, the data center provider landed $6.4 billion in equity led by DigitalBridge and Silver Lake. In March, it obtained $64 million for the development of its first data center in Taiwan.

Ready for AI deployments

Vantage’s North America platform currently includes 12 campuses across the U.S. and Canada. Commercial Property Executive reached out to the company to find out which of these campuses are involved in this deal, but Vantage declined to comment.

However, it is almost certain that one of properties is VA3 in Ashburn, Va. This is an upcoming, 288-megawatt campus, set to encompass 2.8 million square feet upon full buildout. Vantage applied for its development in last February, according to Data Center Dynamics. The company had acquired the 134-acre plot of land at 19509 Belmont Ridge Road for $180 million in 2022.

READ ALSO: Where Innovation Drives CRE Demand

VA3 will be Vantage’s third campus in Ashburn, planned to include seven multi-story data centers powered by two Dominion Energy substations. According to its data sheet, it will be capable of power densities of up to 300 watts per square foot, which is on the higher end.

This density indicates the campus will be ready for AI deployments. In December, Vantage Senior Vice President Steve Conner told CPE that AI will require rack densities up to five times higher than traditional cloud computing—which, in turn, will have more complex cooling requirements.

Green loans pave the way for sustainable development

Vantage secured this fifth green loan under its Green Finance Framework, which guides development and sustainability strategy along five core areas: greenhouse gas emissions, energy, water, waste and community. Under this framework, data centers will need a power usage effectiveness of 1.5 or below to qualify.

Loudoun County, Va., where Vantage’s new campus is located, is among the top areas in the U.S. for leasing activity, according to a recent CBRE report on North American markets. This area has had issues with power delivery in the past, as it is one of the densest data center regions in the world. However, the same research shows that Dominion Energy—the main provider for Virginia—is working on new transmission lines that are bound to deliver sufficient capacity by 2026.

PowerHouse Data Centers recently closed on a 145-acre site in Spotsylvania, Va., for a massive, 800-megawatt campus. It is developing the project in a joint venture with Harrison Street and plans to deliver an initial 150 megawatts by October 2025.

Speed-to-market in Northern Virginia is primarily driven by power and entitlement timelines. Still, the market remains a top choice for developers, with vacancy rates at roughly 1.4 percent as of December, and more than 1.2 gigawatts of capacity under construction, CBRE data shows.

The post Vantage Lands $3B Green Loan for North American Expansion appeared first on Commercial Property Executive.

Monday Properties has secured a tenant for 24,023 square feet of office space at 1812 North Moore in Arlington, Va., near Washington, D.C. Graham Holdings Co., will fully occupy the building’s 21st floor for the next 15 years. JLL brokered the transaction.

The tenant is relocating its headquarters from the Arlington Tower at 1300 17th St. N., as reported by ARL Now. SmithGroup is designing Graham Holdings’ new space and HITT Contracting will handle the build-out.

Rising 35 stories, the tower at 1812 N. Moore St. is the tallest office building in Arlington. Monday Properties was about to lose this property in a foreclosure auction in December, but managed to recapitalize it just in time. The asset became subject to a $173 million loan from Citi Real Estate Funding in a $205.5 million refinancing deal.

READ ALSO: Top 10 Markets for Office Deliveries in 2023

Built in 2013, the Class A high-rise encompasses 537,000 square feet of office space. The LEED Platinum-certified building features floorplates between 9,291 and 23,392 square feet, as well as some 11,000 square feet of retail space. The property comprises a fitness center, as well as a conference center and lounge on the 22nd floor. Notable tenants include Nestle USA, Oracle and AbleVets.

Located near Interstate 66, the office building is some 3 miles from downtown Washington, D.C., and 2.5 miles from Arlington’s city center. It is also adjacent to the Rosslyn subway station and within walking distance of the Plaza East shopping mall.

JLL Vice Chairman Scott Panzer, Executive Managing Director Jay Farmer and Senior Managing Director Steven Burman negotiated on behalf of Graham Holdings. Monday Properties was represented by its Senior Vice President of Leasing John Wharton, along with JLL Executive Managing Director Robert VeShancey, Senior Managing Director Herb Mansinne, Managing Director Yorke Allen and Vice President Lee Brinkman.

D.C. office market holds steady

As of March, Washington, D.C., office market’s average listing rate clocked in at $40.72, up 70 basis points over the past 12 months, according to a recent CommercialEdge report.

The vacancy rate in the metro was 16.5 percent, marking a 1.8 percent year-over-year increase. However, the figure was below the national average of 18.2 percent.

In one of the largest leasing deals of the first quarter, The Washington Post extended its lease at One Franklin Square in Washington, D.C. The tenant renegotiated its initial commitment of occupying 300,000 square feet with the assistance of JM Zell Partners.

The post Monday Properties Lands DC-Area Headquarters Lease appeared first on Commercial Property Executive.

Precision for Medicine LLC has signed renewal and expansion leases totaling more than 116,000 square feet at Riverside Tech Park in Frederick, Md. St. John Properties Inc. owns the 70-acre business and R&D campus.

The clinical research company has been a tenant at Riverside Tech Park since 2006, where it currently occupies the entire 75,000-square-foot flex/R&D building at 8425 Precision Way for its clinical trials, patient biology and manufacturing services.

In addition, the company leased another 41,040 square feet at 8440 Broadband Drive, a newly developed building that finished construction this January and is expected to be fully functional this fall.

READ ALSO: Attracting Life Science Tenants in Core Markets

Riverside Tech Park comprises 14 buildings totaling 753,560 square feet of flex/R&D space. Suite sizes range from 2,760 to 93,360 square feet, with clear heights between 16 and 18 feet. The property also features 30- by 30-foot column spacing and a parking ratio of 4 spaces per 1,000 square feet.

Currently, the park is 96 percent leased. Tenants include Lifeline Cell Technology, InVitro Care and CTR Laboratory, among others, according to CommercialEdge information.

Carrying the address 8415 Progress Drive within the Interstate 270 Technology Corridor, Riverside Tech Park is 2 miles from Interstate 70 and 3 miles from I-270. Downtown Frederick is 3 miles southwest, while Washington, D.C., is roughly 50 miles southeast.

A corridor breathing life into the area’s office market

More than 130 biotechnology and life science companies are situated inside the I-270 Technology Corridor, according to the Frederick County Office of Economic Development.

Among these is The National Cancer Institute, located less than 1 mile off Riverside Tech Park. Affinius Capital refinanced its headquarters building earlier this year with a three-year syndicated loan provided by Sumitomo Mitsui Banking Corp. and Commercial Bank of China Ltd.

Late last year, AstraZeneca signed a 198,000-square-foot lease at a newly constructed Class A industrial and life science building developed by Matan Cos in Gaithersburg, Md. The R&D campus is roughly 30 miles southeast of Riverside Tech Park.

The post Clinical Research Firm Expands Office Footprint to 116 KSF appeared first on Commercial Property Executive.

Monday Properties has obtained a $205.5 million refinancing package for two office assets in Arlington, Va., a Washington, D.C., submarket. Citi Real Estate Funding provided a $173 million loan for 1812 N. Moore, an almost 540,000-square-foot building, and a $32.5 million note for Shirlington Gateway, a 206,200-square-foot medical office property.

The two CMBS fixed-rate loans carry a five-year term. The owner developed the trophy office asset in 2013 and acquired the medical office building in 2018 for $40.8 million from American Counseling Association, according to CommercialEdge information.

Two office assets close to downtown D.C.

The LEED Platinum-certified tower at 1812 N. Moore St. features floorplates ranging between 9,291 and 23,392 square feet, 14 passenger elevators, some 480 parking spaces, fitness and wellness centers, meeting and event space, a conference center and lounge, along with some 11,000 square feet of retail space.

Previous financing for the Class A facility includes a $250 million loan originated in 2017, with up to $70 million pertaining to a future funding facility. The property is 90 percent leased, tenants including Nestlé USA—which signed a 206,000-square-foot lease in 2017—Oracle and AbleVets.

The 35-story high-rise is in the Rosslyn neighborhood, close to several retail options, including the Plaza East Office Building shopping mall. Downtown Washington, D.C., is within 4 miles.

The Shirlington Gateway medical office building came online in 1986 and underwent cosmetic renovations in 2007, CommercialEdge data shows. Amenities include a new lobby, an updated fitness center, a café and five passenger elevators.

The building is 93 percent leased, the tenant roster featuring Anderson Orthopedic Clinic, INOVA and Virginia Hospital Center.

The 12-story facility is at 2800 Shirlington Road, less than 6 miles from 1812 N. Moore and within 7 miles from downtown Washington, D.C.

D.C.’s office sector is showing resilience

Washington, D.C.’s office sector is regaining strength, leading nationally in terms of sales volume year-to-date as of February, according to a CommercialEdge office report. The market saw $429 million in assets changing hands. Additionally, the market’s vacancy rate clocked in at 16.1 percent during the same period, 180 basis points lower than the U.S. average.

In January, Affinius Capital refinanced The National Cancer Institute Headquarters Building, a 586,524-square-foot office property in Rockville, Md. Sumitomo Mitsui Banking Corp. and Industrial and Commercial Bank of China Ltd. originated the three-year loan.

The post Monday Properties Obtains $206M Refi for 2 Office Assets appeared first on Commercial Property Executive.

In January, Terreno Realty has begun a $64 million redevelopment of 1855 W. 139th St., a 231,000-square-foot industrial property in Gardena, Calif. Image courtesy of CommercialEdge

Terreno Realty Corp. has further expanded its portfolio around the Washington, D.C., area with its $84.3 million purchase of the Fleet Industrial Park, a four-building, 357,000-square-foot logistics campus in Alexandria, Va. According to CommercialEdge information, the seller was the State Teachers Retirement System of Ohio, which purchased the property back in 1993.

In addition to the asset value, the price covered all the property’s assumed debt to market, the buyer’s due diligence and closing costs, near-term capital expenditures and associated leasing costs, as part of a larger effort to stabilize it.

The Fleet changes hands

The acquisition brings the publicly traded investor’s portfolio around the nation’s capital to 27 buildings totaling more than 2.1 million square feet. In addition to the Fleet Industrial Park, the firm also owns two properties around Alexandria totaling 227,043 square feet. The firm is also expanding in the Los Angeles area, having recently begun its redevelopment of a 231,000-square-foot industrial property in Gardena, Calif.

READ ALSO: Q&A: How Will the Manufacturing Investment Boom Impact Industrial CRE?

CommercialEdge shows that the Fleet Industrial Park was built in 1977 over 19.1 acres, located at 6584-6674 Fleet Drive. The campus’ four buildings collectively include 67 dock-high and 38 grade-level loading doors, in addition to 580 shared parking spots. Cushman & Wakefield currently handles leasing at the fully occupied property, which has an estimated stabilized cap rate of 5.3 percent. All 21 leases expire by 2031.

Located roughly one mile to the east of an onramp to the Interstate 395, the park also provides easy access to the intersection of I-95/395 and I-495. Old Town Alexandria is 6 miles to the northeast, while Washington, D.C., is an additional 5 miles in the same direction.

A mixed bag along the Potomac

A JLL industrial report from the first quarter of this year found that metro D.C.’s net absorption, project deliveries and asking rents are all up year-over-year, despite CommercialEdge reporting a more than 26 percent decline in transaction volumes from 2022 through 2023. According to the JLL report, 2023 was a five-year high for new supply, with roughly 2.5 million square feet of space coming online.

Still, the area in and around the nation’s capital has seen no shortage of activity within existing properties. Last month, DHL eCommerce entered a full-building lease at Building B of Redstone Industrial, a 138,000-square-foot facility in Manassas, Va. Back in February, Finmarc Management parted ways with 8000 Grainger Court, an 88,000-square-foot flex facility in Springfield, Va. The firm sold the facility to C2 Imaging for $15.9 million.

The post Terreno Realty Expands With $84M NoVa Acquisition appeared first on Commercial Property Executive.

Richmond-based Hourigan has data center plans for a 622-acre site in Greater Richmond, Va., as reported by the Richmond Times Dispatch. Initially dubbed White Oak Technology Park 2, the industrial campus could encompass up to 13 colocation data centers.

The developer has secured an initial approval from Henrico County’s Planning Commission for the rezoning of the site at the interchange between interstates 64 and 295 in Sandston, Va., from agricultural to light industrial use. The new designation would allow for data centers, advanced manufacturing facilities, office space and other related commercial uses.

READ ALSO: AI Is Changing the Game for Data Centers: JLL

Hourigan’s development would be an extension of White Oak Technology Park, a business campus that houses the Richmond Network Access Point (NAP), the only place in the world where four subsea cables, terrestrial networks and data center management overlap.

Hourigan has committed to paying for the necessary water infrastructure for this project, while Dominion Energy is slated to build a 5-mile, 230-kilovolt transmission line for the tech park, according to the same source, with costs estimated at $44.6 million. The energy company is currently working to obtain the necessary approvals.

Data center boom, encouraged

Henrico County representatives have made directed efforts to attract more data center developments in the area. In 2017, the local authorities cut the equipment tax rate from $3.5 to $0.40 per $100 of assessed value.

However, the project is facing opposition from both environmental groups and local historians, despite the go-ahead from the Planning Commission. While the environmental concerns regard water and fossil fuel usage, historians are worried that the development would rise on an important Civil War battlefield.

To placate criticism, Hourigan stated it aims to build the data centers in compliance with LEED Silver standards and is conducting a historical study at the site.

NoVa keeps attracting large-scale projects

It’s no secret that nearby Northern Virginia remains the world’s largest data center market, and the Richmond area is benefiting due to both a spillover effect and several underwater cables hitting land nearby. What’s less known, however, is the market’s growth speed. Northern Virginia data center stock could more than double by the end of this decade, according to several estimates. Case in point, another massive project is hitting its first regulatory hoops.

The Potomac Development Group is eyeing a 9 million-square-foot data center project in King George County, dubbed Dahlgren West, involving the construction of 10 to 15 buildings across 500 acres, the Fredericksburg Free Lance-Star reported. The development is in its very early stages, as plans for the necessary rezoning were not filed yet, but the company is gathering local feedback and hopes to break ground on the project next year if approvals are obtained fast enough.

The company is new to the data center development market and does not intend to lead the build-out of the campus, but rather prepare the site and turn it over to end users, according to Bisnow. The only other large-scale project in the county is, currently, a $6 billion, 869-acre data center development headed by Amazon, the same source reported.

The post 622-Acre Data Center Project Moves Forward Near Richmond appeared first on Commercial Property Executive.

Scannell Properties has sold Performance Food Group @ Cardinal North, a 328,335-square-foot cold storage facility in Glen Allen, Va., for $85.4 million. The mission-critical distribution building is fully leased to Performance Food Group Co.

JLL worked on behalf of the seller and procured the buyer, an entity leading to Eaton Vance Real Estate Group, public records show. As of 2021, the company is part of Morgan Stanley Investment Management Corp.

The cold storage asset is part of Cardinal Commerce Center, a three-building industrial campus that came online in two phases, also including a 260,000-square-foot distribution center and a 186,900-square-foot speculative building.

READ ALSO: How AI is Boosting the Data Center Market

Completed last year, Performance Food Group @ Cardinal North features 160,000 square feet of freezer/cooler space, 32-foot clear heights, an almost 10,000-square-foot stand-alone vehicle maintenance and fueling facility and 138 trailer storage spaces. Additionally, the building has two drive-in doors and 52 dock-high loading doors.

The property occupies more than 59 acres at 10399 Washington Highway, close to interstates 95 and 295. Richmond International Airport and Richmond Marine Terminal are within a 21-mile radius, while downtown Richmond is within 14 miles. The facility is also less than 4 miles from Northlake Distribution Center, a 293,115-square-foot warehouse that traded last year.

JLL Capital Markets Senior Managing Directors Bill Prutting and Pete Pittroff, Senior Directors Craig Childs and Dave Andrews, along with Directors Josh McArdle and Christopher Dale, arranged the transaction on behalf of Scannell. Pittroff, Andrews and McArdle also represented Rockefeller Group in the sale of a 1 million-square-foot industrial park in Fort Mill, S.C.

Scannell’s recent industrial developments

Since its inception in 1990, Scannell Properties has completed more than 550 development projects totaling 158 million square feet. Last month, the firm announced plans for a 1 million-square-foot industrial park near Savannah, Ga., to be developed in partnership with INDUS Realty Trust Inc. The two-phase project is expected to break ground this quarter.

Scannell also started work on a 479,000-square-foot distribution and manufacturing facility in Salem, Ore., in November. The development is scheduled to come online next year.

Richmond’s industrial sector faces challenges

The Richmond-Tidewater market saw more than 1 million square feet of industrial space change hands year-to-date as of March, according to CommercialEdge information. This represents a steep decline from the almost 2.5 million square feet that traded during the same period of 2023.

In one of this year’s deals, a joint venture between Lovett Industrial and an affiliate of Heitman LLC acquired Diamond Hill Distribution Center, an approximately 720,000-square-foot industrial park in Chesapeake, Va. Link Logistics sold the property.

The post Scannell Properties Sells Cold Storage Facility for $85M appeared first on Commercial Property Executive.

The Rockefeller Group and PCCP LLC have secured $100.2 million in construction financing for their joint development of the Rockefeller Logistics Center on the Boulevard, a two-building 656,904-square-foot speculative industrial campus in Northeast Philadelphia.

The loan, provided by New York Life Real Estate Investors, was arranged by a Cushman & Wakefield team consisting of Vice Chairman John Alascio, Managing Directors Aaron Graves and Alex Lapidus, Senior Directors Chuck Kohaut and TJ Sullivan as well as Associate Jason Blankfein.

Development of Rockefeller Logistics Center on the Boulevard, the developer’s first in the city, was announced in December of last year, following the partners’ purchase of the 50.4-acre development site from the Philadelphia Industrial Development Corp. Previously, the site was home to the unbuilt Byberry North Business Center. CBRE, which advised the developers during the transaction, will also oversee leasing at the finished campus.

Later that month, the developers received permits for the project’s development, as reported by the Philadelphia YIMBY.

The project is among PCCP’s most recent industrial endeavors in the Northeast. Last week, the firm provided a $64 million construction loan for McClellan One, a 120,584-square-foot project in Newark, N.J. 

Rockefeller and Roosevelt

According to Heath Abramsohn, Rockefeller’s vice president & regional director for the northeast region, the project broke ground that same December, and is expected to finish construction in the second quarter of 2025. The joint ventures’ development partners of choice are NORR, which is serving as the project’s architect of record, Pennoni Associates for civil engineering, and IMC Construction, which will handle general contracting.

When its construction finishes, the campus’ two buildings, A and B, will respectively measure out at 318,696 and 338,208 square feet. Both buildings will have interiors with 36-foot clear heights. Building A will have two drive-in doors, 49 dock doors, and 57 trailer parking spaces, while Building B will have the same number of drive-in doors, alongside 46 dock doors and 52 trailer parking spots. Additionally, both buildings will have six electric vehicle charging-enabled parking spaces.

READ ALSO: ULI Economic Forecast: Tailwinds, Hurdles or Both?

Located at 15000 Roosevelt Blvd., the property will have direct frontage to U.S. Route 1, which feeds into interchanges to the Interstates 95 and 276, respectively located 1.5 and 5 miles away. Philadelphia’s Center City District is 14 miles to the southwest, while its International Airport sits roughly 6 miles further in the same direction. Nearly all of the Acela corridor lies within a day’s drive of the campus, in addition to Pittsburgh, Cleveland and Columbus.

Philadelphia’s industrial fortitude

Despite a recent slowdown in development, Philadelphia has among the largest development pipelines in the Northeast, clocking in at nearly 6.2 million square feet, according to CommercialEdge’s most recent national industrial report. Recent high profile additions to the metro’s pipeline include RLS Logistics’ expansion of a cold storage facility in Delanco, N.J., to 180,000 square feet, alongside J.G. Petrucci Co. and Cabot Properties’ joint development of a 320,250-square-foot facility in Feasterville-Trevose, Pa.

The post Rockefeller Group, PCCP Secure $100M for Logistics Center appeared first on Commercial Property Executive.

JOOLA is set to relocate its corporate headquarters to 915 Meeting St. in North Bethesda, Md., by late 2024. The table tennis and pickleball company will occupy a total of 35,407 square feet at the Pike & Rose office building owned by Federal Realty Investment Trust. Transwestern represented the tenant, while JLL negotiated on behalf of the landlord.

JOOLA’s future North Bethesda footprint will comprise its corporate headquarters, currently at 2101 Gaither Road in Rockville, Md., alongside street-level retail space and a pickleball studio space. The firm joins a tenant roster including Choice Hotels International Inc. and Sodexo.

Peeking inside 915 Meeting

Federal Realty broke ground on the 276,000-square-foot trophy office building in 2021 and topped it out in 2023. Clark Construction served as general contractor, while Gensler provided architecture services.

The recently completed property is part of Pike & Rose, a 24-acre mixed-use neighborhood featuring 558,000 square feet of office space, 260,000 square feet of laboratory space and more than 400,000 square feet of retail and entertainment, together with a 177-key hotel and 864 residential units.

READ ALSO: Property Management Success: Attracting and Retaining Gen Z Office Workers

The 16-story building at 915 Meeting St. is pursuing LEED Gold certification. The property features flexible floorplates measuring up to 25,000 square feet and 10,000 square feet of retail, as well as 700 dedicated parking spaces.

Amenities include a rooftop conference center equipped with collaborative common areas, a gym, an outdoor terrace, as well as private terraces on multiple floors, secured bicycle storage, a dedicated outdoor air system and destination-dispatch elevators.

Located across the street from White Flint Metro Station, 915 Meeting St. is less than 3 miles from interstates 270 and 495. Downtown Washington, D.C., is roughly 12 miles south.

Transwestern Executive Vice Presidents Gary Schlager and Chris Coccaro assisted JOOLA. JLL Executive Managing Director Bernie McCarthy alongside Managing Director Danny Sheridan represented Federal Realty Investment Trust.

The post Table Tennis Firm Eyes DC-Area Relocation appeared first on Commercial Property Executive.