Former TSA Headquarters Slated For Conversion: The D.C. Deal Sheet
A former federal agency headquarters in Arlington that has been vacant since the pandemic is set to be transformed into 637 apartments.
Lincoln Equities Group and JM Zell Partners have struck a deal to acquire and convert the former Transportation Security Administration buildings at 601 and 701 12th St. S. in Pentagon City while adding 116K SF of new residential area.
“The building's dimensions make it one of the best conversion candidates I have ever seen,” Lincoln Equities Group CEO Lance Bergstein said in a statement.
“That along with Pentagon City’s unparalleled access, dynamic retail scene and growing residential demand make this an ideal opportunity to create a mixed-use community that will serve as a hub for the area,” he added.
The buildings are owned by Brookfield, and the development partners are under contract to acquire them, the Washington Business Journal reported.
JM Zell and Lincoln Equities filed plans with Arlington County for the conversion this month. The project will also include 31K SF of retail and a half-acre plaza connecting it to the Pentagon City Metro station. The nearly 900-unit underground parking garage at the office buildings will be preserved.
LEASES
MCB Real Estate has inked a lease with Costco to serve as the anchor for its planned Viva White Oak development in Silver Spring, the developer announced. The wholesale club committed to opening a 162K SF store at the $2.8B development, which is planned to include 5,000 residential units and 3M SF of retail and office space, with a focus on life sciences industries.
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Coworking provider Convene Hospitality Group is expanding at CommonWealth Partners' 600 14th St. NW, re-leasing a piece of its footprint that it had vacated in 2021. CHG leased an additional 27K SF on the sixth floor of Hamilton Square, bringing its footprint to 80K SF, its broker, Transwestern, announced. CHG had opened on three floors in 2020, but in 2021 it gave back the sixth-floor space. Transwestern’s Larry Serota, John Schlegel and Collin Brown represented CHG.
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Prologis inked a 73K SF lease at its Dulles Commerce Center in Sterling, Gerardo Castellanos, a leasing director for the industrial REIT, announced on LinkedIn. Castellanos declined to identify the tenant in a phone call but said it was a defense contractor. The lease at 23750 Pebble Run Place began on March 1, he said. CBRE’s Niel Beggy represented the tenant, and KLNB’s Marc Tasker represented Prologis.
SALES
George Washington University sold a 120-acre campus in Ashburn, Virginia, to Amazon for the tech giant to build a data center. Amazon paid $427M for the university’s Virginia Science and Technology Campus, The GW Hatchet, the university’s student newspaper, first reported. The sale equates to about $3.5M an acre. GW signed a five-year lease to give it time to find a new home for its programming.
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BXP sold three of seven buildings at a Rockville office park to Toll Brothers for $24.7M, Bisnow reported. BXP in 2021 had planned to turn the 31-acre office park into a 1.3M SF life sciences-focused development, but in mid-2023, it slated half the site for townhome development. Toll Brothers had been under contract to buy the portion of the site since July 2024. Another residential developer, DRB Group Mid-Atlantic LLC, has a separate portion of the office park under contract.
FINANCING
West Palm Beach, Florida-based HighBrook Investors has closed its first data center fund at $226M. The private equity firm is planning to funnel the money into three data center development sites in Fairfax County, which have access to 300 megawatts. Highbrook didn’t disclose exact locations but said that they have by right zoning for data centers. It also said it is in discussions with hyperscale tenants for build-to-suit development and that substation equipment is on order.
