HOW “FAR OUT” CAN DC GO?
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Real estate maven John Lesinski was with Grubb & Ellis for 16 years, becoming their regional head in 2002. But last April, things changed. Of his former employer, he says, “There was a re-organization, and suddenly we were going in different directions.” On his own at age 48, Lesinski’s first instinct was to get back in the same saddle for another company. Instead, he did some soul-searching. “I had gotten very one-dimensional. Leaving Grubb forced me to step back and ask myself, ‘What is it I want to do?” He formed his new company, Leland Group Commercial Real Estate, LLC in June, with partner Joshua Gurland, former assistant sales manager at G & E.
Today Lesinski defines himself as a “generalist,” enjoying the freedom and independence of entrepreneurship. First and foremost a real estate broker, he splits his time between working on industrial sites, leasing office space and parcels of land, and “introducing people to opportunities.” But his favorite part of his job is “kidnapping people” and taking them on a very long drive out to what he sees as Washington’s future, the I-81 Corridor. “I’m very bullish on this market, and I like educating potential owners and investors about the possibilities out there. It’s really going to emerge prominently in the next three to five years.”
Exactly where is “out there”? The I-81 market stretches over 100 miles, from Hagerstown, MD, to Harrisonburg, VA, encompassing James Madison University and parts of the West Virginia Panhandle. Its central location is a big factor. “It is said you can reach 2/3 of the US within a day's drive time from I-81,” says Lesinski.
If you got kidnapped by Lesinski, your route would follow The Big Triangle: out Rte. 66 to Front Royal VA, 60 miles or so from DC, then north on Rte. 522. (Stopping at the intersection of Rtes. 66 and 522, you’d see construction underway of three new retail superstores: Target, Lowe’sand Wal-Mart.) Continue 20 miles north on 522 to Winchester, which Lesinski calls “the Tyson’s Corner of the 81 market, only rents are cheaper and purchase prices are lower.”
He is most excited about leasing a 350,000-square-foot warehouse in Harrisonburg, VA owned by BPG Properties, currently being offered at $4.65 per square foot, versus about $8.00 in DC. “It’s a vision thing,” says Lesinksi, pointing out that a year ago, one acre in the 1-81 market could be gotten for $60,000, and today it would cost over $100,000. Warehouse rents (triple net) have gone from $3.75 per square foot to $5, and in the office market, what was $15-$18 per square foot is now going for $20-$22.
Price is only one part of the equation; demographics is the other. People “drive to qualify” for a home they can afford, and the big builders – Beazer,NVHomes, Ryan, Pulte and Centex – have figured this out already and built houses out there. This of course contributes to the dreaded sprawl and those grueling two-hour commutes. “It’s just a matter of time before the smart employers figure it out and open satellite offices,” says Lesinski. “All the major retailers have stores just about every 20 miles up and down I-81.”
Another sure growth indicator is the presence of the federal government. Within 30-60 days, FEMA will break ground on a 135,000-square-foot building in Winchester. The FBI already leases 105,000-square-feet there, the first step towards a planned one million square foot campus they will use for document storage and databases. Offices will follow; they have issued an RFP to developers and will choose one of three sites under consideration in November. The Department of Homeland Security has a satellite in Harrisonburg.
Getting “out there” will be easier in time, as a combination of solutions, such as rail through Tysons and more roads, are put in place. “Construction is underway to improve merge lanes onto 81, and the idea of toll lanes has been floated,” says Lesinski. “We’re on the crest of a wave in the region."
A Marine colonel who retires from the reserves on December 1, Lesinski is on the brink of a mini-career in leadership and management training as a sideline to his real estate ventures. For relaxation, he and his family enjoy time in Rappahannock County, where they own a small farm on 25 acres. For now they live in Great Falls, but they may move “out there” someday, riding that wave.