The developer, B.F. Saul Co., has owned the land for years, McVay, who is handling the leasing activity along with Moe Hamilton and Craig Bernstein, tells GlobeSt.com, "It decided that now was a good time to develop." Availability of class A space is tight, he says. "And rents have been dramatically increasing for the last 12 months." Rents now average $43 per sf. McVay declined to say what the development costs for B.F Saul would be.
It is unusual for a market of Tysons Corner size – some 25 million sf – to have such little spec development, McVay says. One factor is that available land is controlled by a handful of developers, many of which are waiting for the Tysons Corner Metro to expand.
Park Place II, the spec building, is not located very close to the expansion. However, as McVay notes, the prospect of a new rail line is increasing interest in commercial space in the submarket. The building will offer shuttle service for tenants to nearby train stops. The building is located equal distance from two of the four proposed stations and is expected to deliver in the second quarter 2008.
Another building expected to begin development shortly in Tysons Corner on a spec basis is an 18-story 472,000-sf office tower at 1775 Tysons Blvd. in the Corporate Office Centre at Tysons II. Lerner Enterprises, a Bethesda, MD-based firm, announced earlier this year that construction would begin in the Summer of 2007 and the building will deliver two years later.
When announcing its plans for the building Mark Lerner, a principal of Lerner Enterprises also noted that demand for class A space in the submarket is expected to grow. "While we will proceed with this building on a speculative basis as we did on the last four buildings at Tysons II, we have always had significant pre-leasing in these buildings prior to their completion," he said in a statement.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
