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Amazon is vacating temporary office space, teeing up at least one redevelopment project

(Updated at 10:20 a.m.) With half of its planned HQ2 now open in Pentagon City, Amazon is planning to leave most of its leased spaces in Crystal City.

Once the leases expire for temporary Amazon offices at 1800 S. Bell Street and 2100 Crystal Drive, in 2023 and 2024, respectively, JBG Smith intends to “take off-line and entitle [them] for alternate uses,” per a new report.

One of the buildings, 1800 S. Bell Street, could get the redevelopment treatment as early as 2026, the report says. JBG Smith included the property at the tail end of its near-term development pipeline for National Landing, the area composed of Crystal City, Pentagon City and Potomac Yard. It appears slated to remain for office use.

JBG Smith’s development pipeline in National Landing (via JBG Smith)

Amazon has always planned to consolidate its office space and move employees to its permanent HQ2, the first phase of which — Metropolitan Park — opened in June. There is still no word from the company on when the stalled second phase, Pen Place, could begin, though the delay may only be a year or so.

The tech company’s departure from two of its three leased offices will pile on more vacancies in JBG Smith’s portfolio, according to the real estate company’s report.

By the end of 2024, the company anticipates 1.2 million square feet of office space in National Landing will be vacated. Amazon currently occupies about half that square footage.

Amazon plans to continue to occupy 1770 Crystal Drive, located near the Alamo Cinema Drafthouse, the taqueria Tacombi and the proposed second entrance to the Crystal City Metro station, at the northwest corner of Crystal Drive and 18th Street S.

Excluding Amazon, JBG Smith says its current retention rate between now and the end of 2024 is about 50%, versus an annual average of about 70%. To bring the rate up, the company will focus on filling more up-to-date buildings going forward.

“Our efforts to re-lease certain spaces will be targeted toward buildings with long-term viability,” wrote Matthew Kelly in the report. “We expect to repurpose older, obsolete, and vacant buildings for redevelopment, conversion to multifamily, or another specialty use, ultimately reducing our competitive inventory in National Landing.”

JBG Smith declined to elaborate on what other specialty uses it envisions as well as properties it plans to either retain for tenants or develop.

Its report, however, outlines when each of its commercial holdings in Crystal City was built and when it was last renovated.

Of the four built in the late 1960s, three have not been updated since the mid-2000s. Another 10 were built in the 1980s and were renovated over the course of 15 years starting in 2006.

The report also provides a timeline for forthcoming redevelopment plans. It says Crystal City is slated to get new apartments in the following places:

A new office building is slated to come to 101 12th Street S. and either offices or apartments could come to 2525 Crystal Drive. JBG Smith has studied both at the site and the report currently lists its estimated residential redevelopment potential.

A map of JBG Smith’s commercial holdings in the area, as well as its pipeline of commercial and residential development opportunities, is below. Click on the window in the top left corner to see a description of the map, the different colors, and individual addresses.

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