Friday, August 25, 2017

TSA Headquarters Moves to Springfield Va

COMMERCIAL REAL ESTATE At long last, GSA picks a new headquarters site for the TSA Aug 24, 2017, 5:24pm EDT Updated Aug 24, 2017, 6:01pm EDT INDUSTRIES & TAGS Commercial Real Estate, Sign Up Daniel J. Sernovitz Staff Reporter Washington Business Journal RELATED CONTENT Victory Center part of a big problem for Alexandria's office market GSA to reopen bidding for TSA headquarters BIZSPACE SPOTLIGHT Property Spotlight: One Reston Town Center SPONSOR LISTING Property Spotlight: One Reston Town Center See All Bizspace Properties The federal government has picked a Springfield site as the new headquarters for the Transportation Security Administration, a major victory for the Fairfax County submarket after a federal judge struck down plans to move the agency to Alexandria instead. The General Services Administration awarded a lease to an affiliate of Boston Properties (NYSE: BXP) to build the TSA a new, 625,000-square-foot headquarters as part of the agency's planned relocation from its current home in Pentagon City. The 15-year-lease is valued at $316 million, according to a notice posted Thursday afternoon. Occupancy is expected in mid-2020, according to a source familiar with the deal. The General Services Administration has awarded a headquarters lease shifting the Transportation Security Administration from Pentagon City to Springfield. Enlarge The General Services Administration has awarded a headquarters lease shifting the… more ANDREW HARRER/BLOOMBERG "We are extremely excited and very humbled by the responsibility to develop a headquarters for an agency with a mission-critical nature like the Transportation Security Administration and we pledge to devote all resources necessary to construct a building worthy of their important status," Boston Properties Senior Executive Vice President Ray Ritchey said. Ritchey declined to comment further on the lease award or details of the new headquarters. The site on Springfield Center Drive is immediately behind the GSA's massive Springfield warehouse that was a contender to host the FBI's consolidated headquarters until that search was called off last month for lack of funding. It is also a short walk to the Franconia-Springfield Metro station via Metro Access Road. The outcome is one few could have expected two years ago, when Boston Properties protested the GSA's award of a lease shifting the TSA to Victory Center in Alexandria. Still, a federal judge agreed with Boston Properties, finding that the federal government exceeded its authority by awarding a lease in excess of the 625,000 square feet the House and Senate authorized for the new headquarters. Judge Charles Lettow ordered the federal government's lease at 5001 Eisenhower Ave. to be voided, prompting the agency to reopen the bidding process. Lettow, in his order, dismissed the federal government's argument that the lease couldn't be overturned once awarded, arguing the GSA was not entitled to keep its "ill-gotten gains." The decision is a blow to Victory Center's owner, an affiliate of PGIM Real Estate, formerly Prudential Real Estate Investors, which has struggled for years to land an anchor tenant for the vacant building. It's also a setback for Alexandria, which had stepped in to offer financial incentives to help bring the agency to 5001 Eisenhower Ave. Alexandria economic development officials are weighing plans to encourage the owners of empty buildings like it to convert into other uses, such as residential. Among the indirect beneficiaries of the new lease is Pennsylvania Real Estate Investment Trust (NYSE: PEI), which owns the Springfield Town Center property on Loisdale Road a couple blocks from what will become the TSA's new headquarters. The TSA has about 3,400 employees, a large base of potential customers for the revamped former Springfield Mall, and its presence will likely lead PREIT to advance the redevelopment of the 78-acre town center's expansive parking lots. The property is entitled for about 3 million square feet of additional mixed-use development, including residential, office and retail, which played heavily into the town center's $465 million price tag. "It’s a confirmation that all the revitalization and improvements that we’ve made in Springfield are paying off," said Supervisor Jeff McKay, D-Lee. "It’s definitely huge for Springfield and for Fairfax County." One of those improvements is the $84 million extension of Frontier Drive, from the Franconia-Springfield Parkway to Springfield Center Drive and looping around to Loisdale Road — creating key access to the TSA site and other potential development nearby. The design is being completed now, and it is a candidate for Northern Virginia Transportation Authority funding this year and next. JLL brokers Jae Lee and William Ruppe represented the government in the deal and Cushman & Wakefield broker Darian Leblanc represented the landlord. Daniel J. Sernovitz covers commercial real estate, multifamily housing, architecture and construction. UPCOMING EVENTS Real Estate Dealmakers: Diversity SEPTEMBER 14, 2017 Virtually Business SEPTEMBER 14, 2017 Networking Tour of DC's Industrial Areas with the Business Journal & WDCEP SEPTEMBER 27, 2017 See More Events

No comments: