Wells Fargo (Access11) LDCRE
January 7, 2015

FBI Frenzy!

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One of the maddest scrambles in the history of Washington commercial real estate may be underway this week. (And you thought the screeching you heard was just wheels spinning in the snow.)

Many of the top developers in town have been planted on the phone this week coaxing and cajoling contractors, architects and engineers, and in some cases other developers, to work on their team (and not with others) on bids for the 2.1M SF new HQ of the FBI to replace the World's Ugliest Building. You remember—the cooler, more secure campus GSA wants in Greenbelt, Landover or Springfield.

CohnReznick (Field) MDCRE

Here's what started the scramble. The RFP from GSA that came out last month (cover page above) specified huge requirements for team members that even some major players who planned to bid can't meet. (GSA wants to be sure this project gets done right.) The developer(s) on your team must show they have $1B in liquid assets and have done three 500k SF projects in the past five years. Architects must show they've done three 500k SF projects in the past 10 years. And builders must show they've done one 1M SF and two 500k projects in the past five years and have $1B in bonding capacity for a single project. So contenders have to team up with others who can help them meet these criteria. And they don't want them to join other competitive teams. (You can be on more than one.)

Wingate Hughes (OnTop) MDCRE

Why do people care? The prize is: 1) the old FBI building, likely to be torn down by the developer but sitting on a long block of Penn Ave land valued at between $200M and $500M; and 2) probably another $500M or more in cash for the development of the new HQ.

Donohoe (NewWebsite) MDC

By this Friday, any questions on the process are due. By Feb. 10 at 3pm, you've got to tell GSA who's on your team. By May, GSA will announce up to five teams that can compete. And by May of next year, GSA will announce its selection for both a team and a site based on the designs proposed. (Teams can propose a design for any or all of the three sites.)

Here's a design developers Renard and Related have floated for the Greenbelt site, owned largely by WMATA. But now they have to be sure they meet the qualifications described above.

Same for Lerner, which has this design for the site in Landover, which it happens to own. And there are many other developers expected to bid, like Boston Properties, JBG, Hines, LCOR, Lincoln and Trammell Crow. Many architects like Gensler, HKS, HOK, SOM and Shalom Baranes Associates. And behemoth contractors like Clark and Hensel Phelps (which is rumored to have been lining up all the subcontractors in town so they're not available to competitors). Maybe you, too, want to join in the fun?

Why does everyone want the old FBI site? Nearby a glamorous Trump Hotel is being re-created from the Old Post Office. Everyone assumes there will be an intensified revitalization along Pennsylvania Avenue, needing another City Center-like mixed-use development of high-end shopping, restaurants, condos and hotel. Developers are teeing up to serve.

Who's overseeing the decision? A very hands-on and well-known GSA Administrator, Dan Tangherlini (here speaking at a Bisnow event). We wish him the best of luck pleasing everybody.

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Miller and Long (Jan28) DCRE
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