ROSSLYN, VA-Skanska USA, which turned heads last year when it announced it was beginning work on a spec office in the East End, is moving forward with another spec project. By February 2011, the company expects to have full construction underway on a site in the Rossylyn submarket, Rob Ward, executive vice president and regional manager of Skanska USA Commercial Development in Washington, DC, tells GlobeSt.com. 

The company acquired the site at 1716 Wilson Blvd. earlier this year and then changed the address to 1776 Wilson Blvd. It did that to create a two-way street in front of the building to help the flow of traffic. This building will have 25,000 square feet of retail, Ward explains, and sport such retail-friendly features as 20-foot ceilings.

It is also being designed to LEED Gold standards, but the company hopes to attain Platinum. Demolition and site work has already begun, Ward reports. The development costs for the 142,000-square-foot building are roughly $60 million. Skanska plans for office asking rents in the mid- to high-$40s per square foot, he says. Once construction is underway the company expects to see strong interest in pre-releases. Rosslyn is one of the few submarkets where rents have not seriously declined and vacancies are still low.

Also, the supply pipeline is, like the rest of the city, close to empty. The only other major construction start is Monday Properties’ 1812 N. Moore St., a $300-million, 35-story tower that has been designed to Platinum LEED standards. The company broke ground on it in mid-October 2010, with delivery expected in fall 2013. 

Until there is discernable progress on the building, Ward doesn’t expect to see much pre-lease activity in Rosslyn, despite the pent-up demand. “The way the environment is right now, tenants are not about to commit to a building unless they are sure it is actually going up and that enough financing is in place,” he says. That includes money for the necessary TI allowances.

Because Skanska’s current DC-area projects--the one in the East End, which is located at 733 10th St., and Rosslyn--are fully self-funded this is not a problem, Ward says. The company doesn’t plan to put any debt on the either building after it delivers, he adds. 

Skanska just inked its first pre-lease in the East End building. The National Association of Manufacturers will occupy 41,732 square feet on the fifth and sixth floors beginning in April of 2012. The eight-story, 165,000-square-foot office is scheduled for completion in fourth quarter of 2011. Asking rates in this building are $49 per square foot to $54 per square foot, triple net.