This Week's D.C. Deal Sheet: Microsoft Pays $466M For Data Center Site
Microsoft Corp. purchased a massive data center parcel in Prince William County at a historically high price for a data center deal in the region, the Washington Business Journal reported Friday.
The tech giant paid $465.5M for 124 acres from regional data center developer Chuck Kuhn. The seller, 41992 John Marshall Highway LLC, an entity tied to Kuhn, purchased the property in 2020 for $46.9M.
The two parcels at 13490 University Blvd. and 5941 Wellington Road, are just south of the controversial Digital Gateway data center campus, the WBJ reported. Microsoft has been accelerating its data center development pipeline over the last year to build out capacity for artificial intelligence tools like ChatGPT.
LEASES
AT&T is leasing a full 111K SF building in Chantilly to consolidate its regional locations. The company is planning to move to Menlo Equities’ Stonecroft IV at 4807 Stonecroft Blvd., its broker, Stream Realty Partners, announced Wednesday. The building was occupied by defense contractor Northrop Grumman beginning in 2008, but the company left the property vacant a few years ago.
Cushman & Wakefield's Anne Rosenau and Marc Rosenberg represented AT&T, and Stream Realty co-Managing Director Jeff Roman and Executive Vice President Malcolm Schweiker represented Menlo Equities. AT&T expects to move in 2025.
SALES
Finmarc Management sold an 88K SF flex/warehouse building in Springfield, Virginia, to its sole tenant. Graphic company C2 Imaging purchased the entire property where it resides for $15.9M, Bethesda-based Finmarc announced. The building is part of an 11-property portfolio totaling 740K SF of flex/office, industrial and data center space in the area. Finmarc paid Boston Properties $127.5M for the properties in mid-2022. This sale is the second disposition in that portfolio. Finmarc sold a 27K SF property at 7375 Boston Blvd. to Costco Wholesale in June for $6.6M.
Savills Executive Managing Director Wendy Feldman Block represented the buyer, and Finmarc was represented in-house. Kelley Drye & Warren’s Aaron Rosenfeld provided legal services to Finmarc.
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A congregation that had been searching for a home purchased a historic Black church in Shaw. The Church of the Advent purchased the 22K SF property at 1552 Fifth St. NW, Sacred Spaces Conservancy, which assisted the church with the sale, announced this week. Built in 1893, the property is the oldest Black church in D.C. still standing. The sale closed in January for $3.9M, according to documents filed with the D.C. Recorder of Deeds. The previous owner, the Third Baptist Church congregation, is moving to Prince George’s County, according to a news release.
The church was designed by the first Black architect to practice in the District, Calvin Brent. It was listed on the National Register of Historic Places in 2008.
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The Foundry, a 50-year-old office building in Georgetown, is scheduled for a foreclosure sale next month, the Washington Business Journal reported, citing a notice in public records. JBG Smith and CBRE's independent investment arm purchased the 232K SF property at 1055 Thomas Jefferson St. NW in 2014 through a joint venture fund. Ownership owes $58M on the note, which is held by lender JPMorgan Chase, according to the notice. In its fourth-quarter investor package last month, JBG said it wouldn't put any more funds into the property and didn't expect any near-term cash flow, Bisnow reported at the time.
MILESTONES
A 2-acre mixed-use redevelopment of the Quinn family-owned auction house in Falls Church has received city council approval. The development, planned for retail, office, residential and a semipublic park, got the go-ahead from the Falls Church City Council on Monday. The project will raze two buildings at 350 and 360 S. Washington St. and build 233 units of senior housing, 33K SF of offices, 15K SF of retail and 4,800 SF of restaurant space.
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A Goodwill store in Arlington is officially set to become a mixed-use development with 128 affordable units. The Arlington County Board greenlighted the redevelopment at 10 S. Glebe Road on Saturday. The site is home to a Goodwill of Greater Washington flagship store. The redevelopment will be the nonprofit’s first colocated affordable housing and store. Arlington-based nonprofit developer Affordable Homes & Communities is partnering with Goodwill of Greater Washington to deliver the project, set to break ground in the summer of 2025.
The development is set to include a new 31K SF Goodwill retail store and processing center on the ground floor and space for a childcare facility. The retail portion is set to open at the end of 2026 and the apartment units in 2027. MTFA Architecture will design the project.
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KTGY completed its move from Tysons to downtown D.C. on Tuesday, the regional architecture firm announced. KTGY took 15K SF at Rockrose’s Alexander Court at 2001 K St. NW in the south tower. The footprint is a slight expansion from its Tysons footprint at 8609 Westwood Center Drive, where it has been since 2010. The new office in D.C. is fully occupied by 55 employees, according to a spokesperson.
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American Real Estate Partners has begun construction on a 200-unit office-to-residential conversion in Alexandria. The McLean-based developer announced the news in a press release this week, projecting a delivery date in the fall of 2025. CityHouse, at 1101 King St., is half a mile from the King Street Metro station. AREP acquired the 200K SF office property in September 2022. Pre-leasing is set to begin in the summer of 2025. Silverpeak Real Estate Partners is AREP’s strategic investment partner.
PERSONNEL
JLL has a new head of mid-Atlantic retail leasing, the brokerage announced. Jeff Bach has been promoted from managing director, overseeing Baltimore retail leasing. In his new position, he will oversee teams from Baltimore, D.C., Northern Virginia, Richmond and Hampton Roads. Before JLL, Bach was a 28-year veteran of CBRE, where he was on the brokerage’s Baltimore retail team. He joined JLL in 2017.
