GSA Inks 2 Leases for 117,630 SF

ROCKVILLE, MD-The General Services Administration has signed two separate renewals on behalf of the Department of Health and Human Services. One is for 61,902-square-feet of space at 11919 Rockville Pike in Rockville, MD. The other is for 55,728-square-feet, for the Food and Drug Administration, at 5630 Fishers Lane in Rockville, MD. They both are ten-year terms and both were brokered by Jones Lang LaSalle.

In the first transaction, GSA was represented by Jim Phelan and Rich Miller and Jones Lang LaSalle's Whitney Aaronson, Rob Carey and Joe Judge. David Alperstein of FD Stonewater represented the building owner. In the second deal, Keith Lavey of Colliers International represented the building owner, The JBG Cos.

11919 Rockville Pike is part of Montrose Metro I & II, an 182,503-square-foot Class A office complex.

There are a couple of points of note to these deals. One, regarding the Fisher Lane transaction, which is a full building lease: the FDA nearly doubled its utilization space with the renewal, Roth tells GlobeSt.com. "The FDA will be able to get a lot more personnel into the space than they did before. There will be about 152 more people joining the 168 that are already there," he says.

Increasing space efficiency, of course, is a theme across commercial real estate use in both the public and private sector. It is telling, though, to see the government do it for an existing lease and not part of a new move. "We are seeing the GSA try out pilot projects along these lines," Aaronson tells GlobeSt.com. "It is definitely a key trend in the government."

The other noteworthy point of these two deals is that they closed in the midst of another cycle of upheaval and uncertainty on Capitol Hill. Briefly, Congress and the Obama Administration appear to be heading for another clash that could result in a government shut down. After that, a potential debt ceiling default is waiting in the wings. While Wall Street and the business community is more frightened of the latter, the former will have more of an impact on the DC real estate community.

Yet the government plows ahead with its deals. "I haven't seen much impact on leasing activity," Roth says. "It is not so much the threat of a shutdown but rather the continuous risk of making long-term decisions in this uncertainty," he says.

In fact, he adds, there are a lot of expirations coming up that the GSA is moving on right now. "Activity is up, I would even say." One difference between this Congressional crisis and past ones is that the government has a better strategy on how to deal with the uncertainty. Maximizing utilization rates, for example, has been one tactic, he says.