Boston Properties Lands Major TSA Lease In Springfield

The General Services Administration has just made one of the biggest real estate decisions on its plate, selecting a new HQ site for the Transportation Security Administration. 

Boston Properties won the bid with its Springfield site and secured a 15-year lease valued at $316M.

The developer will build a 625K SF facility on a 10-acre site next to the Franconia-Springfield Metro station. Boston Properties plans to break ground next month and aims to complete the project in mid-2020, Boston Properties Senior Vice President Kenneth Simmons told Bisnow. It is working with Gensler as the architect and Lendlease as the general contractor.

"It was very competitive, and the primary reason was based on the price, quite frankly," Simmons said. "Also the quality of the project. Like all of our Boston Properties buildings, it will be a Class-A complex that will meet their needs for many years."

The deal, first reported by the Washington Business Journal, will move the TSA from its current home in Pentagon City to the Springfield site. The property sits next to the GSA warehouse site the agency had considered for a new $2B FBI HQ campus before canceling that search last month. 

With the TSA moving in, Fairfax County plans to extend Frontier Drive to better connect the site with the Springfield Town Center. Boston Properties owns another adjacent, seven-acre site that is entitled for office, and Simmons said it is looking into development plans for that site in light of the TSA lease.

“It is going to open up this entire area adjacent to the Metro for new development,” Simmons said. “We’re very hopeful that over time,  the GSA warehouse site will be developed to a better and higher use, either a mixed-use development or a government facility.”  

Fairfax County Economic Development Authority CEO Jerry Gordon applauded the GSA's decision as a big win for the county.

"The site in central Springfield is a great location because it is accessible to highways and rail transportation, and bringing TSA into the community means the area continues to develop into one of the region's major employment centers and provide more amenities for those who work and live there," Gordon said in a release.

Cushman & Wakefield's Darian LeBlanc represented Boston Properties and JLL's Jae Lee and William Ruppe worked on behalf of the GSA.

LeBlanc said price, accessibility and nearby amenities were all factors, but he pointed to security as one of the GSA's top priorities in its search.

“Boston Properties had an amazing solution as it related to a very efficient building that was eminently securable,” LeBlanc said. “It gives TSA the ability to have something they haven’t had to date, and that is a fully secured HQ facility.”  

The GSA had originally awarded the lease to Prudential Real Estate Investors' Victory Center in Alexandria in August 2015. Then, after Boston Properties protested the award, a federal judge voided the lease in November 2015, saying the GSA unlawfully favored Victory Center.

The government had hoped to move the TSA out of Pentagon City by 2018, but was forced to push that target date back to 2020 after the Alexandria lease fell through. Last summer the GSA reopened the bidding process and took just over a year before ultimately deciding to go with Boston Properties' site. 

Some brokers have speculated the GSA was delaying major decisions like this one until the appointment of a permanent administrator. It still has an acting head in place, but a new Public Building Service commissioner was sworn in on Aug. 3, former congressional staffer Dan Mathews. 

LeBlanc said this deal already had enough momentum to get done before the PBS commissioner appointment, but he thinks Mathews will improve the GSA going forward. He said having a PBS commissioner is far more critical to the commercial real estate sector than the administrator, and he praised Mathews' background working for the congressional subcommittee that deals with the GSA.

"I’ve got to say it’s refreshing to have someone with first-hand experience with the GSA, knowing them outside and in, taking on the role of PBS commissioner,” LeBlanc said. “I think he will add a lot to the agency.”