CRYSTAL CITY, VA-The Department of Defense has opted to renew a 558,187-square foot lease here. The decision is, no doubt, happy news for the landlord, Beacon Capital Partners. It also comes as little surprise to observers, given the federal government's embrace of austerity. Cassidy Turley's Darian LeBlanc and Laurie McMahon represented Beacon Capital Partners. Contracting officers Seyi Gbadegesin and Tawanda Beverly represented GSA along with Jones Lang LaSalle brokers, William Craig, Jr., Jae Lee and Nick Nimerala.
The building, located at 2530 Crystal City Dr., is known as the Zachary Taylor Building. The lease was renewed for a five-year term.
Expect to see more moves especially with the April 2013 Senate resolutions authorizing the government to enter into renewals or new leases.
Earlier this year a source active in government leases predicted to GlobeSt.com that agencies would come to the conclusion they don't want to spend the upfront capital to move when budgets are so tight. Hence, if the landlord puts a good deal on the table—as they invariably do—the default decision is almost always to renew.
"Right now agencies want to avoid moving to a new building if they can," this source said. "As a practical matter, the cost of relocation and rebuilding their space comes out of the budget as a lump sum."
"So if they can strike a good deal to remain in place they will."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
