FAA Cancels Move, Re-Ups for 204,000 SF

Brian Bacon with Cassidy Turley, who represented the property owner in the transaction, tells GlobeSt.com that the GSA had planned on moving the aviation group out to anchor a new 650,000-square-foot building in the East Village area here. However, he says the new building still hasn't made it through GSA approvals, so the decision was made to keep the FAA in its current building.

The agency had leased the building since the facility was designed specifically for it 10 years ago, Bacon says. "It would have much more costly for the FAA to get a new building that has all the amenities we have for it at the current location, to add those would boost the lease cost to about $30 to $40 per square foot," he says. He refused to comment on the new lease rate, but says the average lease rate in the central business district is about $17.42 per square foot, full service. "There were a few concessions made to keep them in the building," he says, including renovations and security additions.

The new GSA plan, Bacon says, is a request for a 450,000 square foot building without the FAA. While the new building could house current GSA employees who are spread out throughout the city, it's not currently clear if the new facility would still go in the East Village area.

While the CBD's 7.9 million square feet of office is about 22.7% vacant, the city's entire 40-million-square-foot market isn't much changed from last year, with direct vacancy at the end of 2009 at 17.4%, only about 1% higher than direct vacancy at the end of 2008. Of course, Midwest markets don't see quite the same highs and lows as the coasts, Bacon says. "We've fallen a little, but things are still relatively good," he says. "For the bigger picture, I think we've definitely hit bottom. There's now more people on the street looking at space, willing to start making long-term decisions instead of six-months and one-year renewals."