This Week's D.C. Deal Sheet

Sodexo is moving its North American headquarters to a new North Bethesda office building and is significantly shrinking its footprint in the process.

The French catering giant has signed a lease for 52K SF at 915 Meeting St., a Federal Realty office building currently under construction at the Pike & Rose mixed-use development.

When Sodexo moves in, scheduled for spring 2024, it will join tenant Choice Hotels International Inc., which has already signed on for 105K SF of the 276K SF office building.

The move will see Sodexo more than halve its footprint — it previously occupied 117K SF in its longtime Gaithersburg headquarters, the Washington Business Journal reported.

JLL’s Bernie McCarthy and Danny Sheridan represented the landlord in the deal, and Adam Schindler of Colliers and James Kang of Mohr Partners represented Sodexo. 

LEASES

The owners of the former Zara space on the high-traffic corner of M Street and Wisconsin Avenue NW have closed on four new leases that bring the property's retail component close to full lease-up. EastBanc and Acadia Realty Trust announced Blank Street Coffee, Van Leeuwen Ice Cream, Wolford and Ever/Body are slated to occupy more than 5K SF of ground-floor retail space at 1238 Wisconsin Ave. NW. The partners began redeveloping the property in 2019, and they also plan to add 15K SF of office space and five residential units, according to a press release. EastBanc also said it would move its office to the property once the space was ready.

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Mill Creek Residential is adding a seven-screen Paragon Theaters to its Founders Row shopping center in Falls Church, the developer announced Tuesday. The 31K SF theater will also include a restaurant and an arcade bar. Joe Muffler, senior managing director of development for Mill Creek Residential, said the developer has been trying to bring a theater to the 80K SF shopping center at West Broad and North West streets for years, but had been “thwarted by the pandemic” until now. Paragon joins several other restaurant tenants in the development, which is slated to open its retail component by the end of this year.

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The U.S. Patent Office is giving back a third of its office campus in Alexandria as part of a roughly five-year lease renewal. When its new lease begins in 2024, the federal government tenant is slated to occupy 1.6M SF of the 2.4M SF office park it first moved into in 2005. LCOR, which purpose-built the campus for the USPTO, has shifted its focus to multifamily of late, developing and leasing up properties in and around Washington, D.C.

SALES

FRP Holdings and MRP Realty announced a deal with Steuart Investment Co. this week to jointly develop more than 2,000 housing units across a series of new projects in Buzzard Point. Under the terms of the deal, Steuart is acquiring an ownership stake in Maren and Dock 79 for $65.3M, two multifamily properties previously developed by FRP and MRP. Steuart also has the option to buy into Verge, a third property from the joint venture partners that recently began lease-up. 

MRP principal John Begert told Bisnow the partners are exploring another multifamily development on a Steuart-owned parcel at the intersection of Half Street and S Street SW next, and they are hoping markets will stabilize enough to kick off that project in the second half of 2023.

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BXP has completed the sale of a Reston Town Center multifamily property as part of a 1031 exchange for a Seattle office property. The publicly traded developer and owner sold The Avant, located at 12025 Town Square St. in Reston, for $141M, it announced Wednesday. BXP developed the 15-story, 359-unit property in 2013. Under the terms of the deal with an undisclosed buyer, BXP will retain ownership and management of the 26K SF retail portion of the property. In addition to The Avant, the 601 Massachusetts Ave. NW office building and two Dulles land parcels were sold as part of the 1031 exchange, which allows BXP to defer capital gains taxes.

MILESTONES

The University Of Maryland has signed a memorandum of understanding with Montgomery County to lease and then build a biotech and health sciences institute in North Bethesda. The newly created campus, dubbed The University of Maryland 3 - Institute for Health Computing, is initially slated to lease 20K to 25K SF before occupying a new building on WMATA-owned land next to the North Bethesda Metro station, formerly the White Flint station. Under the terms of the agreement, which must first be approved by the county board, Montgomery County would invest $40M in the institute as part of its commitment to anchor the still-growing I-270 life sciences corridor.

PERSONNEL

Affordable housing developer Standard Communities has hired Feras Qumseya as its first chief development officer. Qumseya joins Standard from Foulger-Pratt, where he was vice president of development. In his new role, Qumseya will oversee the New Construction division of Standard, where he will be focused on 4% low-income housing tax credit financing. Qumseya, who is based in D.C., was also the mayor’s founding director for the Saint Elizabeths East Campus Redevelopment initiative, per a press release.