commercial real estate

Morning Notes

By ARLnow.com

Unusual trash day items (Photo courtesy Peter Golkin)

ACFD Battles Fire in Fairlington — Firefighters from Arlington, Alexandria and Fairfax together helped to battle a kitchen fire in a Fairlington condominium this morning, preventing it from spreading further. S. Abingdon Street near Abingdon Elementary was blocked for part of the morning as a result of the emergency response. [Twitter, Twitter]

ACPD Cracks Down on Fake IDs — An Arlington County Police Department campaign to crack down on fake IDs, in partnership with Clarendon bars, has netted more than 450 fakes since May. At one point this summer, according to a manager, Don Tito collected about 20 fake IDs per week. [WJLA]

Metro Pulls 4000 Series Cars — Metro has removed all 4000-series railcars from service to due safety concerns. Rep. Don Beyer (D-Va.) said he asked the agency to prioritize 8-car train service on the Blue Line while the railcars are out of service. Metro’s general manager “assured me there’d be very little impact to BL riders,” Beyer tweeted. [WMATA, Twitter]

Sietsema Lauds Ambar — Ambar’s new Clarendon outpost not only lured the Washington Post’s Tom Sietsema west of the Potomac River, but it received 2.5 out of 3 stars from the restaurant critic. Sietsema’s main gripe: too much noise. “Surely the same folks who dispense so much good will and satisfying food can solve a problem like disquiet,” Sietsema wrote. [Washington Post]

Post Profiles Old Dominion Neighborhood — The Washington Post’s continued anthropological study of Arlington’s neighborhoods in the real estate section has this week brought it to the Old Dominion community. A pair of recent homebuyers said they liked that Old Dominion “had a neighborhood feel and was also walkable.” [Washington Post]

Big Wins for Arlington at NAIOP Awards — Arlington County fared well at the 2016 NAIOP Northern Virginia commercial real estate awards on Wednesday. Among the local projects being recognized were the Bartlett in Pentagon City, WeWork/WeLive in Crystal City, Arlington’s Dept. of Human Services building along Washington Blvd and Opower in Courthouse. [NAIOP]

Photo courtesy Peter Golkin

BREAKING: Vornado to Spin Off Local Business, Merge with JBG

By ARLnow.com

Vornado Realty TrustVornado, Arlington County’s biggest private landowner — with major collections of properties in Crystal City and Rosslyn — announced today that it is spinning off and merging its D.C. area operations with Chevy Chase, Md.-based JBG Companies.

The combined company would have both office and residential properties throughout Crystal City, Pentagon City and the Rosslyn-Ballston corridor. Among JBG’s properties in Arlington are the under-construction Central Place project in Rosslyn and the iconic “Bob Peck” office building at 800 N. Glebe Road in Ballston.

In 2014, Vornado’s properties in Arlington were assessed at $3.8 billion, or 5.7 percent of the total assessed value of all property in the county, according to the Washington Business Journal. JBG’s properties in Arlington were assessed at $1.31 billion.

From a press release, issued late this afternoon:

VORNADO REALTY TRUST (NYSE:VNO) (“Vornado”) announced today that its Board of Trustees has approved a tax-free spin-off of its Washington, DC business, currently known as Vornado/Charles E. Smith, and that it has entered into a definitive agreement to merge SpinCo with the operating company and certain select assets of The JBG Companies (“JBG”), a leading Washington, DC real estate company.

The combined company will be named JBG SMITH Properties. It will be the largest, market-leading, best-in-class, pure-play Washington, DC real estate company. This transaction represents a key milestone in Vornado’s value creation strategy which will have produced three world-class, highly focused REITs – Vornado itself (RemainCo), Urban Edge Properties, and now, JBG SMITH. Each of these companies has a highly focused
management team, unique assets, and a clearly defined mission.

About JBG SMITH

  • Vornado shareholders are expected to own approximately 74% of the combined company, JBG limited partners are expected to own approximately 20%, and JBG management is expected to own approximately 6% (all percentages subject to closing adjustments).
  • JBG SMITH will be led by JBG’s senior management team which has a proven track record of superior execution in the Washington, DC market over the long term and through numerous cycles.
  • The combined company’s portfolio will consist of 50 office properties totaling approximately 11.8 million square feet, 18 multifamily properties with 4,451 residential units, and 11 other properties totaling approximately 0.7 million square feet. These assets are located in premier submarkets within the Washington, DC metropolitan area, concentrated in Downtown District of Columbia, Crystal City and Pentagon City, the Rosslyn-Ballston Corridor, Reston, and Bethesda.
  • Importantly, JBG SMITH will have a pipeline of projects under construction and land for future development that could add over 20 million square feet to the portfolio, positioning the company for strong growth and attractive shareholder returns.
  • JBG SMITH will be the largest landlord to the U.S. Government in the nation’s capital.
  • The Company will be well capitalized, have substantial liquidity and a strong balance sheet.
  • The combination is expected to result in approximately $35 million of synergies producing an overhead structure in line with best-in-class peers.
  • The new company will continue to manage the JBG funds’ assets that are not being contributed for customary fees. The company will not raise new investment funds. JBG SMITH Board and Management
  • JBG SMITH’s Board of Trustees will consist of twelve members, a majority of whom will be independent. Vornado and JBG will each designate six trustees.
  • Steven Roth, Vornado’s Chairman and Chief Executive Officer, will be Chairman of the Board.
  • W. Matt Kelly, a Managing Partner of JBG, will be Chief Executive Officer of JBG SMITH and a member of the Board.
  • Rob Stewart, a Managing Partner of JBG, will be Executive Vice Chairman of the Board.
  • The Board will also include seven independent trustees including Alan Forman of the Yale University Investments Office, JBG’s largest investor.
  • Michael Glosserman, a Managing Partner of JBG, will also join the Board, as will Mitchell Schear, current President of Vornado/Charles E. Smith.
  • From JBG, David Paul will be President and Chief Operating Officer, James Iker will be Chief Investment Officer, and Brian Coulter and Kai Reynolds will be Co-Chief Development Officers.
  • From Vornado/Charles E. Smith, Mitchell Schear will be a member of the Executive Committee, Patrick Tyrrell will be Chief Administrative Officer, Jim Creedon will be Executive Vice President responsible for Office Leasing, and Laurie Kramer will be Executive Vice President focused on integration of the teams.
  • The new company will look outside for a Chief Financial Officer and intends to have that individual in place before the close of the transaction.
  • The new company will integrate the best talent from each of Vornado/Charles E. Smith and JBG.
  • Vornado will provide transition services to JBG SMITH, in areas such as IT, tax and SEC reporting for an interim period.

Morning Notes

By ARLnow.com

2016 election-themed Halloween display on Key Blvd (photo by Katie Pyzyk)

Earthquake Drill Today — Virginia and a handful of other states will be participating in the Great SouthEast ShakeOut earthquake drill today at 10:20 a.m. [ShakeOut.org]

Sobering News on Office Vacancies — County officials are warning that Arlington’s office vacancy rate will remain relatively high for the foreseeable future. Optimistically, economic development officials believe that by “slowly and steadily” winning lease renewals and new tenants, the vacancy rate could decline to just past 15 percent, from the current 20 percent, within a few years. [InsideNova]

Arlington No. 8 on Marathon Training Rankings — Arlington County has ranked No. 8 on a list of the best places to train for a marathon. The county earned high marks for its parks, its walkability and its climate. [Competitor]

Most Popular College Applications — The three top schools in terms of the number of applications from the high school class of 2016 in Arlington were: 1. Virginia Commonwealth University, 2. University of Virginia and 3. Virginia Tech. [Arlington Magazine]

Arlington’s Commuter Efforts Lauded — “Arlington County Commuter Services (ACCS) is being recognized for weaving mobility into broader efforts to improve local quality of life and economic competitiveness. ACCS was named by the Association for Commuter Transportation as having the best transportation demand management (TDM) program among all large municipalities in the United States.” [Arlington County]

Photo courtesy Katie Pyzyk

Clarendon Grill Renews Lease

By ARLnow.com

Clarendon Grill signWith plenty of turbulence in the Clarendon restaurant scene this summer — opening, closings, rumors — it’s worth noting that some long-time establishments are doing just fine, thank you very much.

Clarendon Grill, which has been in business since 1996, is still among the local winners. The cover band, trivia night and happy hour destination, at 1101 N. Highland Street, just extended its lease.

Owner Peter Pflug says Clarendon Grill is continuing to do well enough that he decided to extend its lease by five years, through March 2022.

Pflug, who has been dubbed the “one of the godfathers of Clarendon nightlife,” chalks the recent turmoil up to an “oversupply of restaurants” in the area.

He said normal supply-and-demand dynamics aren’t working in Clarendon because once there’s an oversupply of restaurants it’s hard to get back to an equilibrium.

“Once a retail space becomes restaurant space, it usually stays that way,” he said. “It’s expensive to put in ADA bathrooms, kitchens, etc.”

Additionally, with the bricks-and-mortar retail industry on the decline thanks to competition from online retail, non-restaurant retailers are not rushing to fill empty space. Who is filling empty space? In some cases it’s savvy restaurant operators who execute well and are effective at carving out their local niche; in other cases it’s owners who are new to the Clarendon market and “may not be the best at doing their homework.”

Yes, rents are high, but that’s not the most important factor at play.

“I don’t think rental rates are nearly as important as oversupply,” Pflug said.

Clarendon Grill, which was renovated in 2010, continues to have a full slate of live entertainment on tap, including the aforementioned cover bands, “hilarious” Wednesday trivia nights, karaoke nights and salsa dancing nights.

TV Station WJLA to Remain in Rosslyn

By ARLnow.com

The WJLA building in RosslynTelevision station WJLA (ABC 7) will remain in Rosslyn after its owner, Sinclair Broadcasting, signed a new 15 year lease.

Monday Properties, which owns the 1000/1100 Wilson Blvd “twin towers” in which WJLA is based, first announced the 100,000 square foot lease renewal on Tuesday.

The renewal helps to maintain Rosslyn as something of a media hub, home to WJLA, Politico, Washington Business Journal, Graham Holdings, Salem Radio Network News, Washington Free Beacon and New Media Strategies.

More from a press release:

Sinclair Television Group, Inc is renewing its over 100,000 square foot lease at 1000 Wilson Boulevard and 1100 Wilson Boulevard until 2031. The Towers is one of 10 buildings owned and operated by Monday Properties throughout Rosslyn and the greater metropolitan area.

“Over the past several years, we have been running an extensive search in the Metro D.C. area with the goal of selecting a long-term real estate solution that meets our future business objectives.  As we looked at our options, which included building a new, standalone facility, we kept coming back to the Towers,” said Del Parks, Senior VP and Chief Technology Officer of Sinclair Television Group, Inc.  “With its expansive building infrastructure and operational flexibility, we are able to execute our growing platform in Rosslyn most efficiently.”

“It’s clear that Rosslyn’s ongoing transformation offers a robust and diverse array of businesses, retailers and housing options which are critical for our employees’ overall workplace and social requirements,” Dan Mellon, General Manager of Sinclair’s WJLA and News Channel 8, which will occupy part of the space. “The Towers proximity to Northern Virginia, Maryland and Washington, D.C., also provides our employees the ability to cover stories quickly, from a location that is free from transportation inefficiencies.”

Sinclair’s decision to re-commit to Rosslyn builds on its extensive occupancy history at the Towers, where its landmark media companies, WJLA and News Channel 8 (acquired by Sinclair in July 2014) have been long-term tenants. Sinclair’s 15 year lease will be accompanied by an extensive infrastructure investment to suit their unique business needs, which includes vital connectivity to the Washington D.C. area.

With the renewal of their lease, Sinclair has joined a growing ‘media hub’ trend in Rosslyn, which has an impressive roster that includes Politico, Washington Business Journal, Graham Holdings, Salem Communications, Washington Free Beacon and New Media Strategies.

“When we did our initial short-term renewal with Sinclair earlier this year, we did so hoping that we would provide Sinclair the time necessary to fully vet their real estate search which included the Towers.  Over the past couple of months, we have worked collaboratively with the Sinclair team to formalize a comprehensive lease renewal structure that enables them to firmly achieve their firm’s new programming endeavors.  As companies increasingly look to pursue first-rate amenities, easy accessibility and a business-friendly environment, the Rosslyn submarket continues its upward trend of being a location that firms look to in attracting and retaining high quality employee talent.” said Tim Helmig, President and Chief Operating Officer of Monday Properties. “We’re pleased that Sinclair will remain a tenant of Monday Properties, enjoying the unparalleled amenities and lifestyle opportunities Rosslyn has to offer.”

Including the Sinclair transaction, Monday Properties has executed over 345,000 square feet of new and renewal leases in 2016 in its portfolio as Rosslyn continues its impressive, upward absorption trend this year, joining other recent high profile transactions with global consulting group, Grant Thornton, PriceWaterhouseCooopers, Eastern Foundry, CalAtlantic Group (Ryland Homes) and Silicon Valley Bank, to name a few.

More American Tap Room Rumors Surface

By ARLnow.com

American Tap Room in ClarendonMight changes be in the works at American Tap Room in Clarendon?

Multiple sources tell ARLnow.com that the bar and restaurant at 3101 Wilson Blvd is either set to close or, at least, give up part of its space for a new Verizon Wireless store. No timeline was given for when either might happen.

A local manager at American Tap Room told us that it’s not planning to close. The restaurant’s Reston-based parent company, Thompson Hospitality, did not return a call last week seeking comment.

In late 2014 we reported, citing commercial real estate sources, that American Tap Room was seeking a buyer to take over its large, pricy lease for space just across from the Clarendon Metro station. It has remained open since that report.

Morning Notes

By ARLnow.com

Arlington Cemetery Metro station in the rain (Flickr pool photo by Brian Irwin)

Beyer Participates in House Sit-In — Rep. Don Beyer (D-Va.) was among the Democratic members of the House of Representatives participating in a sit-in for gun control. Beyer gave a speech on the House floor at 4:15 this morning. [C-SPAN, Twitter]

Arlington’s 11-Year-Old Police Chief — Carlin Springs Elementary student Nathnael Abraham, 11, served as Arlington’s Police Chief-for-the-Day on Tuesday. As chief Nathnael was especially concerned about bank robberies. “I think the most important crime problem would be robberies — bank robberies, because they’re taking money that belongs to other people, and that’s not OK,” he told NBC4’s Pat Collins. [NBC Washington]

Garvey: Vacancy Rate Still Too High — Even though it’s come down by 1 percent in the past year, Arlington County Board Chair Libby Garvey says Arlington’s 20.2 percent office vacancy rate is way too high. The county has been actively working to attract businesses and bring the rate down. Each 1 percent of vacancy costs the county about $3.4 million in tax revenue. [Arlington County]

Whistleblower Hotline to Be Expanded — Arlington County will be expanding its recently-implemented waste, fraud and abuse hotline this fall. The hotline, currently only available for county employees, will be opened to the general public. In its first year, the hotline received 13 complaints, one of which resulted in a policy change and two of which are still under review. No widespread waste or fraud was uncovered, the county says. [InsideNova]

New Agreement With JBMHH — On June 15 Arlington County and Joint Base Myer-Henderson Hall signed a new memorandum of agreement for a partnership that will provide services and cost savings to the base. [Pentagram]

Flickr pool photo by Brian Irwin

Morning Notes

By ARLnow.com

Sugar Shack Donuts on Columbia Pike

Post Investigates Chinese Rice Customs — In a follow-up to the saga of the diners who received insults on their bill at Peter Chang’s restaurant in the Lee-Harrison shopping center, the Washington Post has taken a closer look at the rice-serving customs of restaurants in China. Could it be, the Post asks, that the servers were driven to frustration due to erroneous “mansplaining” about rice? [Washington Post]

County Considering Fraud Hotline for the Public — Arlington County staff is considering a proposal to expand the county’s new waste, fraud and abuse hotline, making it open to the public. The hotline is currently set up for county employees. [InsideNova]

Market Common Clarendon Sells for $406 Million — The Market Common Clarendon shopping center and apartment complex has sold for $406 million. The buyers are Florida shopping center developer Regency Centers and Arlington-based real estate investment trust AvalonBay. [Washington Business Journal, WTOP]

County Board Race Donations By ZIP Code — New maps show the percentage breakdown of campaign contributions to Democratic County Board contenders Libby Garvey and Erik Gutsthall, by ZIP code. According to the maps, Garvey is strongest in the north Arlington 22207 ZIP, while Gutshall’s strongest zone is the Crystal City and Pentagon City 22202 ZIP. [Data for Humans]

Review of New Synetic Theater Production — “The action-packed shows of Synetic Theater always have cinematic flair, but the second act of the company’s new ‘The Man in the Iron Mask’ takes on surprising storytelling depth. The always-superb fights are accompanied by unexpectedly gripping scenes of high melodrama and even flickers of camp.” [Washington Post]

MakeOffices to Open Flagship Coworking Space in Clarendon on June 1

By ARLnow.com
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MakeOffices, the Arlington-born coworking company that recently expanded to Chicago and Philadelphia, will be opening its new flagship location in Clarendon next month.

The 40,000 square foot space, on the second floor of the 3100 Clarendon Blvd office building, is set to open June 1.

“Clarendon is called home by many young entrepreneurs and high-achieving professionals, and MakeOffices gives them the place to meet across the table to share ideas and grow their businesses,” said MakeOffices CEO Raymond Rahbar.

The new office — the company’s second in Arlington, in addition to its original Rosslyn location — will be MakeOffices’ largest in the D.C. area. It will have 135 private offices, 454 desks, 10 call rooms, eight conference rooms, two wellness rooms, a relaxation room and five audiovisual booths.

“Its centerpiece is a large communal area comprising of a kitchen and event space that can host 70 seated and up to 150 at a reception-style event,” notes a press release. That kitchen will offer complimentary coffee, tea, fruit and, yes, a selection of three beers on draft. Also free: office-wide WiFi, conference room rentals and printer access.

The 3100 Clarendon Blvd location affords views of the Clarendon Metro station, easy walks to restaurants and bars and even a direct underground connection to the Clarendon Metro station. (That connection was sealed off while the high-security Defense Intelligence Agency was the building’s office tenant.)

MakeOffices is competing with the likes of WeWork in the booming coworking sector.

Like WeWork and other, smaller competitors, MakeOffices offers its members flexible month-to-month leases that allow small companies to grow and large companies to host teams without the need to build out an office or sign a long-term lease. Thanks to copious amenities, collaboration among members and other factors, coworking spaces have developed a reputation for producing happier employees than traditional offices, with their typical rows of cubicles and lack of beer.

Despite its large size, MakeOffices expects its new Clarendon location — which is still under construction and just beginning to host hardhat tours — to fill up quickly. (ARLnow.com is among the companies that will have an office there.)

Pricing for a single desk in the space starts at $300 per month, while private offices start at $700 per month. (Offices with a view cost a bit more.) Potential tenants can schedule a tour online.

Morning Notes

By ARLnow.com

Herselle Milliken Park in Ashton Heights

Big Tree Down on Washington Blvd — A large tree fell across power lines on Washington Blvd just south of Virginia Hospital Center during Saturday night and Sunday morning’s windstorm. Washington Blvd was closed between George Mason Drive and N. Harrison Street for much of the day Sunday while Dominion crews repaired the lines. [Twitter, Twitter]

Photos: DCA Airport Strike — DCist has photos from last week’s 24 hour strike of contract service workers at Reagan National Airport. [DCist]

Arlington Signs on to Amicus Brief — Arlington was among more than 50 counties and cities that signed on to an amicus brief in support of the Environmental Protection Agency’s Clean Power Plan for reducing carbon emissions from power plants. [Columbia Law School, Twitter]

Capital Improvement Plan Survey — Through April 22, Arlington County is conducting an online survey of residents that will help guide decision-making during the upcoming Capital Improvement Plan process. The CIP helps to plan “major investments in parks, libraries, transportation, community centers, facilities, technology, water, sewer and stormwater infrastructure — along with other areas that support the community.” [Arlington County]

‘The Burbs Are Back’ in Office Leasing — Arlington and other suburban D.C. jurisdictions are showing a bit of strength in the office leasing market. “The suburbs accounted for 69.5 percent of Washington region’s leasing activity in the first quarter, up substantially from a 52.9 percent share in 2015, according to JLL’s quarterly market reports.” [Virginia Business]

TSA Move Delayed Until 2020 — The Transportation Security Administration will be staying put at its Pentagon City headquarters until at least 2020. The TSA had planned to move to Alexandria by 2018, but legal wrangling has delayed the move and forced the TSA to redo its leasing process. [Washington Business Journal]

PSA: Don’t Do This — Spotted in Clarendon: a young woman urinating while sitting on a bench along a busy street, at 5:30 p.m. on a Saturday. [Twitter]

Morning Notes

By ARLnow.com

Cloudy sunset (Flickr pool photo by John Sonderman)

Buyers Found for Market Common — A pair of buyers has reportedly been found for the Market Common mixed-use development in Clarendon. Regency Centers and AvalonBay are said to be partnering to buy the shopping center and apartment complex for $410 million. [GlobeSt.com]

Lyon Park Gun Store Opens — After a month of controversy, Nova Armory opened its doors on Saturday, with dozens of gun enthusiasts showing up to support the store. In a rally nearby, local lawmakers urged residents to continue the fight against the store, but said that due to Virginia law there was nothing else they could legally do to prevent the shop from opening. [Washington Post]

Teen Employment Expo Scheduled — Teens seeking summer jobs and employers seeking seasonal help will be meeting next month at Arlington’s 2016 Teen Summer Expo. The expo, on April 23 at Wakefield High School, is expected to attract some 1,200 teens looking for summer jobs, internships and volunteer opportunities. [Arlington County]

Arlington Tech Event Tomorrow — There’s one day left before ARLnow.com’s Arlington Tech discussion and networking event. The event is taking place starting at 5:30 p.m. Tuesday at Highline RxR (2010 Crystal Drive) in Crystal City. Food and a drink will be provided. [Eventbrite]

Flickr pool photo by John Sonderman

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