Not-For-Profits Still Bolstering Occupancy Rates

WASHINGTON, DC-The Bipartisan Policy Center is renewing 30,613 square feet early at 1225 Eye St., NW, an East End building owned by Piedmont Office Realty Trust. It is also expanding its space by 7,479 feet in the nine-year lease. The two transactions have coterminous lease expirations of 2022.

Sometimes it seems that the DC area commercial real estate industry is all about the federal government, all the time. It is easy to forget that non-profits, such as the BPC are another, lower profile tenant that supports the community. A look at recent transactions shows just how pervasive non profits are in the area--they are not, in other words, hunkered down only in Capitol Hill and Downtown.

Invesco Real Estate and Penzance are building a 280,000-square foot mixed-use project one block from the Clarendon Metro Station at 3001-3003 Washington Blvd. in Arlington, VA.  They kicked off the project after securing a 1750,000-square foot prelease from CNA, a not-for-profit research and analysis organization.

Adventist HealthCare, a not-for-profit health system, took 69,379 square feet at 820 W. Diamond Ave. in Gaithersburg, MD. It is scheduled to move to its new offices in May of 2013, a concession granted to it by owner CommonWealth REIT.

In a previous interview, CBRE broker Andy Cole told GlobeSt.com that the Adventist lease attracted the interest of other tenants and there is enough buzz about the building that he anticipates it becoming fully leased in short order. Before the lease, the building was 23% occupied.

Not-for-profits are also active in the investment sales market here, in some cases making savvy moves that are the envy of their profit-oriented counterparts. In another CBRE deal, the National Restaurant Association sold 1200 17th St., NW, last October to a joint venture between Akridge/First Potomac Realty Trust for $39.7 million. NRA is leasing back the space for six months while it finalizes its relocation to another property in the District. Before it sold the property, the group pushed to have it rezoned, increasing the value to $233 per foot, according to Manny Fitzgerald, the SVP at CBRE who heads the firm’s Nonprofit Practice Group.

The zoning change allows twice as much density on the site. The existing building is 85,000 square feet, and the rezoning provides the right to demo the building and double the square footage to 170,000 square feet.