WESTFIELDS, VA-Washington Property Co. has just closed on a 9.41-acre plot of site-plan approved land here, with the intent of developing it into an office building in the medium term. This submarket has been, to put it kindly, overdeveloped and still has a good deal of supply to burn off.
In an indication that developers believe that day is coming sooner rather than later, Washington Property has opted to expand into this market. “This is a submarket that we feel will eventually rebound,” Washington Property head Charles Nulsen tells GlobeSt.com. The timeline for development is admittedly hazy, he adds. “We would need a pre-leased component to begin development but we are moving forward with plans in anticipation of this.”
The site’s location--across the street from the National Reconnaissance Office--was key. “Mostly, that submarket caters to NRO,” Nulsen says. Washington Property acquired the plot in an REO sale from the bank, which has taken it back from the original owner, Opus East. It traded for $2.6 million, or $18 per FAR (floor area ratio) square foot, Jim Kornick, senior vice president of Investment Services with Northmarq, who helped broker the deal, tells GlobeSt.com. Opus East paid approximately $35 per FAR square foot, he says.
WPC was not the only company interested in the site, Kornick adds. “They had competition for this site--another well known local developer was aggressively bidding for it with the same intention in mind.” Such competition, he adds, “would have been unthinkable this time last year.”
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