The 12 Largest Office Leases Signed In The D.C. Area This Year
It was by no means a banner year for the D.C. region's office market, but it was decidedly better than 2020, as local and federal agencies renewed large office leases, technology firms increased their presence and one government office deal kick-started one of the largest office developments in recent years.
Below are the 12 largest office leases of the year, according to CBRE research provided to Bisnow.
1. The Securities and Exchange Commission
Address: 60 New York Ave. NE
Size: 1,229,345 SF
Type: Pre-lease
Landlord: Douglas Development Corp.
Closed: Q3
This year’s biggest deal came when the Securities and Exchange Commission decided to move from its office space adjacent to Union Station and sign a pre-lease deal with Douglas Development in NoMa.
The new space across from the infamous (and soon-to-be revamped) Dave Thomas Circle is one of the largest office deals in D.C. history. The 1.2M SF purpose-built headquarters will bring an additional 4,500 workers to the neighborhood.
The General Services Administration launched a search for the SEC's new headquarters in 2017, and it received congressional approval in April 2018. The agency's current landlord, Property Group Partners, filed a protest over the search in October 2018 that was rejected by a judge in June 2019.
Douglas Managing Principal Norman Jemal said his company had been hoping to redevelop the 60 New York Ave. site, which currently contains parking lots, for 30 years, and the SEC’s lease would be a “catalyst” for continued growth along New York Avenue.
Douglas Development has significant remaining development capacity at the site, which could be used for office, residential or a mix of the two.
2. D.C. Department of Consumer and Regulatory Affairs and D.C. Office of Tax & Revenue
Address: 1100 and 1101 Fourth St. SW
Size: 543,798 SF
Type: Renewal
Landlord: USAA Real Estate
Closed: Q4
D.C.'s Department of Consumer and Regulatory Affairs is facing a renewed push for a major restructure, but that didn’t stop the city government from signing an extension of its lease at 1100 and 1101 Fourth St. SW owned by USAA Real Estate. The city takes up a large portion of the two Waterfront Station buildings, which delivered in 2010.
That extension likely won’t last for long: Earlier this year, the Office of the Deputy Mayor for Planning and Economic Development released a request for proposals to build new office space on the St. Elizabeth’s East campus, with plans for DCRA to occupy 200K SF of the proposed development.
That’s just one of several city agencies that have pledged to move in new spaces in Wards 7 and 8 as part of the mayor’s plans to spur investment in the historically underserved areas.
3. Raytheon
Address: 22110-22260 Pacific Blvd., Sterling
Size: 521,366 SF
Type: Extension
Landlord: Beacon Capital Partners
Closed: Q2
Raytheon renewed a major Northern Virginia lease this year, agreeing to stay on in three buildings in Sterling it has occupied for the past decade.
The renewal, brokered by JLL, was a signal that the defense and intelligence contractor would maintain a major office presence in the region despite the fact that many of its employees were working from home, Washington Business Journal reported.
Raytheon, among the region’s largest employers, has taken up three buildings in the complex, which is owned by Beacon Capital Partners, since 2010, when it filled the vacancy left by America Online.
4. FEMA
Address: 500 C St. SW
Size: 301,384 SF
Type: Extension
Landlord: Donohoe Cos.
Closed: Q2
Plans to relocate the Federal Emergency Management Agency to the St. Elizabeth’s West campus in Ward 8 were scuttled in 2019 after the Department of Homeland Security determined it was cheaper to keep the federal agency in place. That led to a major lease renewal for Donohoe Cos. this year when FEMA agreed to sign an extension in the two-block office complex.
Federal Center Plaza, as it is known, was purpose-built for the agency in 1981, and FEMA has remained there ever since. The complex contains two eight-story office towers, with space for other tenants as well.
Though DHS was ultimately unsuccessful in bringing FEMA to its new consolidated headquarters, it’s still active in Ward 8. In June, the General Services Administration released plans to build a 618K SF office building on the St. Elizabeth’s campus in Ward 8 for a different agency, the Cybersecurity and Infrastructure Security Agency.
5. Department of Veterans Affairs
Address: 425 Eye St. NW
Size: 241,398 SF
Type: Extension
Landlord: Saban Capital Group
Closed: Q3
6. Department of Veterans Affairs
Address: 1800 G St. NW
Size: 217,000 SF
Type: Renewal
Landlord: Blake Real Estate
Closed: Q2
The Department of Veterans Affairs extended and renewed two major office contracts in D.C. this year, each over 200K SF.
The federal agency extended its lease at 425 Eye St. NW with Saban Capital Group. The GSA first signed a lease at the building in 2010 when it needed swing office space. The VA is the largest tenant in the building.
The VA also renewed its lease for 217K SF at 1800 G St. NW, which is owned by Blake Real Estate. The firm bills the building as one of D.C.’s largest office spaces, with over 600K SF across 12 stories.
The building is adjacent to the offices of several other government agencies and international heavyweights, like the World Bank and the International Monetary Fund. The GSA previously renewed the VA's lease at 1800 G in 2012.
7. Kaiser Permanente
Address: 700 Second St. NE
Size: 206,875 SF
Type: Renewal
Landlord: Property Group Partners
Closed: Q4
Kaiser Permanente renewed its lease at 700 Second St. NE this year, ensuring it will remain in the space adjacent to Union Station at a time when the SEC’s move away from the three-building complex will bring change to the market. PGP owns the complex, which was completed in 2009 and is LEED Silver.
Kaiser Permanente has not shied away from committing to physical space during the pandemic, even as it sent as much as 90% of its services to telehealth during the pandemic’s early days. The healthcare conglomerate has at least two projects scheduled to open in the region next year, including a 48K SF space in Hyattsville and a 240K SF hub in Woodbridge.
8. D.C. Department of Health
Address: 899 North Capitol St. NE
Size: 205,860 SF
Type: Renewal
Landlord: Network Realty Partners
Closed: Q1
The D.C. Department of Health re-upped its lease at its NoMa offices just a couple of years after Network Realty Partners and equity partner USAA Real Estate acquired the three-building Union Square complex.
The Department of Health will continue to neighbor a U.S. Citizenship and Immigration Services field office, which signed a 15-year lease extension at the same property this year.
NRP also has big plans for the site: In November, the three-year-old firm announced it would soon break ground on a 106-unit hotel in the space between the office buildings on-site. The hotel plans include a full-service restaurant on the ground floor, which the developer hopes will activate the site beyond the typical workday.
9. Office of the Assistant Secretary for Preparedness and Response
Address: 400 Seventh St. SW
Size: 186,198 SF
Type: New
Landlord: MetLife/New York State Common Retirement Fund
Closed: Q2
The U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response signed a rare major lease in Downtown D.C. this year when it agreed to take up more than 180K SF at Constitution Center. The government agency was repped by CBRE.
The building, located near the L’Enfant Plaza Metro station, houses several federal agencies, including the Office of the Comptroller of the Currency, the Federal Housing Finance Agency and the General Services Administration, according to the building owner’s website.
The building was originally completed in 1969 and underwent a major renovation from 2006 to 2009 led by Smith Group, which installed advanced security systems to meet the needs of federal agencies. The building was sold to MetLife in 2012, and it is one of the most valuable properties in the city.
10. Microsoft
Address: 1300 Wilson Blvd., Arlington
Size: 181,174 SF
Type: New
Landlord: Tishman Speyer
Closed: Q1
Last year, Microsoft topped the list of office leasing deals in the region by inking a 400K SF deal at Reston Town Center.
Then in January, the tech giant made another splash by signing a lease for new office space in Rosslyn. The 180K SF lease brought the Tishman Speyer-owned building to 93% leased. Microsoft plans to bring employees into the building sometime next year.
Microsoft was one of many tech firms this year to lease new office space in Northern Virginia, but it was by far the largest. Coming hot on its heels are Amazon — which has snapped up warehouse space in the region while moving forward with HQ2 — and Peraton, which announced in December it would shift its base of operations from Herndon to Reston Town Center.
11. Lockheed Martin
Address: 2121 Crystal Drive, Arlington
Size: 180,000 SF
Type: Renewal
Landlord: JBG Smith
Closed: Q3
Lockheed Martin shrunk its office footprint in Northern Virginia this year, but the renewal for its remaining space was still large enough to crack the year's dozen largest office leases.
The government contractor downsized from 220K SF in JBG Smith’s office tower at 2121 Crystal Drive in Crystal City, giving up a floor it previously leased. Bethesda-based Lockheed Martin is the region’s third-largest company and one of its top employers, according to the Washington Business Journal.
The shift to work-from-home impacted office space across the aerospace and defense industry this year, which contracted by 355K SF in Northern Virginia, the WBJ reported.
12. Gibson Dunn
Address: 1700 M St. NW
Size: 163,750 SF
Type: Pre-lease
Landlord: Skanska
Closed: Q3
Gibson Dunn enabled construction on a major new office building in D.C.’s central business district when it agreed to lease more than half of the new building at 1700 M St. NW, known as 17xM.
Under the terms of the 16-year lease, the law firm will control floors seven through 11 of the building, as well as a portion of the penthouse, the Washington Business Journal reported. Skanska signed a ground lease with JBG Smith on the site in 2019 and expects to complete construction on the $216M trophy office tower in 2024.
