Thursday, November 20, 2008

New Tenants for New Developments

Less than a week after Deputy Mayor Neil Albert assured the development community that prominent organizations would "still [be] leasing space here in the District," his words appear to be ringing true. Several developers behind major projects in both Washington and Northern Virginia have announced freshly inked deals this week, despite the tubercular state of real estate market.

Forest City's sprawling Southeast Waterfront development, The Yards, went public on Monday with news of two new tenants for the project's retail component - the Boilermaker Shops at 200 Tingey Street SE. Delaware-based brewery, Dogfish Head, has signed on to open a brewpub in the converted nautical manufacturing facility, as Forest City also nears an agreement with an as-of-yet unnamed jazz club for the site. Once completed in 2010, the Boilermaker Shops will boast 45,000 square feet of retail and up to five in-house restaurants.

Forest City’s slate at the Yards also includes a commercial office building at 401 M Street SE – which, according to the Washington Business Journal, will soon be home to the District’s third Harris Teeter grocery store. Also on the brown bag front, there is talk of a Whole Foods Market for the William C. Smith & Co.’s neighboring Square 737 project.

Over in the District’s second development hotspot, NoMa, another project nearing completion is also rapidly running out of vacancies. J Street Development’s 90,000 square foot condo complex at 111 K Street NE now has confirmed three not-for-profit organizations as soon-to-be tenants: the Sierra Club, the National Association of Student Personnel Administrators and, most recently, YWCA USA – the latter of whom will occupy the building’s entire 11th floor. According to sources at the NoMa BID, the Gensler-designed building is now 60% leased and will deliver on-time in 2010.

Meanwhile, projects across the river in Arlington are working towards deals with even the most cash-strapped of clients – like the Arlington County government. The Monday Properties-controlled site at 1101 Wilson Boulevard (the pre-2002 home of the Newseum) is being pursued by the County Board as the possible site of a new Cultural Center – as part of a sweetheart deal the developer cut with the Arlington officials late year to facilitate the much beleaguered development of their project at 1812 North Moore Street.

County authorities estimate that it would take $4 million to convert the 53,826 square foot facility into a viable cultural venue. However, Monday won’t be seeing one cent from the County until next year’s numbers start to become clearer. “I will only recommend proceeding with the center once the County’s 2010 budget is clear, and only if a viable center can be developed with no new general tax revenues,” said County Manager Ron Carlee in a prepared statement.

If the County passes on the deal, the space will be given back to Monday “in exchange for approximately $10 million for the value of the public benefits.” At present, the terms of the deal would allow the County to occupy the space rent-free for the first 10 years of a 15 year lease. The Rosslyn Business District has already contributed $1 million towards construction costs associated with retrofitting the former museum.


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