Covington & Burling Commits to 420,000 SF at CityCenterDC

(Mark Your Calendars. The 11th Annual RealShare Washington, DC convenes at the Ritz Carlton, June 1. Click here for more information.)

WASHINGTON, DC-Law firm Covington & Burling LLP has signed a letter of intent to take 420,000 square feet at CityCenter DC, the mixed use development currently underway in Downtown DC. The project’s developers, Hines, Archstone and the TFI US Real Estate Fund, announced the letter of intent, noting that once the lease is executed, the project’s office space will be more than 80% preleased. The firm will move into its new space in 2014.

The timing for the District could hardly be better, Jones Lang LaSalle research director Scott Homa tells GlobeSt.com. “Assuming this letter of intent materializes into a fully-executed lease, the deal will have an enormous impact on the Washington, DC market,” he says. He points to the dissolutions of Howrey and Dewey LeBoeuf, the pending move-out by McDermott Will from 600 13th St., as well as other law-firm relocations and downsizings, all of which have introduced approximately 2.2 million square feet of vacancy to the East End. “The prospect of CityCenter delivering next year without a prelease in place could have exacerbated the oversupply and softened conditions further.”

Meanwhile, Homa continues, “The space that Covington will potentially leave behind on Pennsylvania Avenue will compete for a different segment of tenant demand than the higher-quality trophy space to the north, so the letter of intent will be the first step toward stabilizing a segment of the market that had appeared exceptionally vulnerable given the level of current and future vacancies.”

CityCenterDC’s phase I began construction in March 2011. The two office buildings, two apartment assets and two condominium buildings are expected to top out this fall and start accepting initial occupants in Q3 of 2013.

CityCenterDC is a 10-acre mixed-use development on a 4.5-block parcel bounded by New York Avenue, 9th, H and 11th streets, NW. Phases I and II will deliver more than seven buildings containing 295,000 square feet of retail, 520,000 feet of office, 458 apartment units, 216 condos, a 350-room luxury hotel and nearly an acre of open spaces.

Foster + Partners of London and Washington, D.C.'s Shalom Baranes Architects created the master plan. A joint venture between Clark Construction Group and Smoot Construction is the general contractor.