Developer Q&A: Boston Properties Senior Vice President Pete Otteni
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One of the main hubs of Fairfax County, Reston Town Center has plenty of development in its nearby pipeline as Phase 2 of the Silver Line prepares for its 2020 opening. Reston Town Center's owner, Boston Properties, has another major mixed-use project planned for the land in between the town center and the future Metro station. We caught up with Boston Properties Senior Vice President Pete Otteni to get the latest on the development.
Bisnow: You're working on a major development next to Reston Town Center and the future Silver Line station called Reston Gateway. What components will this mixed-use project have and where do the plans stand right now?
Otteni: It could be as many as 4M SF. It will have between 150K and 200K SF of retail and a pretty heavy concentration of office and residential, 1M to 1.5M SF of each of those, plus a hotel. It’s a couple of phases and will take some time to develop. We’re in the relatively early stages. We’ve filed for rezoning and are hoping to finish by early to mid-2018 and move forward with design and permitting after that. Hopefully we will be delivering around the time the Silver Line arrives in 2020. We probably will be a little behind that.
Bisnow: What will the first phase look like?
Otteni: It’s a little bit up in the air because its partially market driven. For Phase 1, we’re trying to touch each of the components. It’s going to have a major office building, a large component of for-rent apartments as well as over 100K SF of retail and probably a hotel as well. Some of those are going to be market driven. If we're able to do it, our preference would be to deliver a sense of place in Phase 1. It could be as much as 1.5M SF.
Bisnow: Are you talking to potential users of each component?
Otteni: There is preliminary interest on all fronts. It’s a little early for that kind of time frame, but we’ve had preliminary discussions with users for all of the components. Nothing has progressed past the preliminary stage. Given where we are in zoning, it’s a bit premature, but we’ve had it in the marketplace and we're doing what we can to get it in front of folks.
Bisnow: What type of retail are you designing the space to attract? Are you looking for a large grocery store or other retail anchor?
Otteni: We are definitely designing an opportunity for a larger-format type of retailer. We don’t know yet, we’ve got to figure out whether it's grocery or another type of retail. We think there’s an opportunity for at least one larger-format retailer that could be a mini anchor. In terms of the retail mix, our view is that, unlike Reston Town Center, we don’t think we will have quite as soft-goods-driven of a user base. It will be much more food, entertainment and convenience. It will be a great complement to Reston Town Center.
Bisnow: This project is well-located, between an established urban core and a future transit station. How do you envision the new development fitting in?
Otteni: We think it's important. What we’ve done through the master plan process is to think of this as both a place in and of itself as well as a connection between the Metro and what everybody thinks of as a world-class community in Reston Town Center. When you get off Metro at the Reston Town Center station, if you were going to what people think of as the urban core today, you’re going to pass right through this development. It’s a transient pass-through market and a destination in and of itself. We're working on connecting it from a pedestrian standpoint, thinking about how it feels. The ideal solution would be if you get off Metro heading north, you have a consistent experience. We think that’s something we can achieve and it can be a guiding principle.
Bisnow: The upcoming phase of the Silver Line is obviously sparking a lot of development, how do you think the line will impact Fairfax County once it opens?
Otteni: Certainly the portions of our portfolio in Reston have done well without Metro to date. While that’s true, we think Metro is potentially a game-changer in terms of adding another type of transportation to and from the corridor. There are users, both government and others, that want to be within a certain proximity of Metro, and our new development will be. All of our existing developments are within a half mile of Metro. From our perspective it's an important additional piece. We think it's an interesting thing for our development. The fact that our development is near Reston Town Center, which is already this urban, mixed-use downtown part of Reston and Fairfax, means the property that sits between Metro and that seems prime for continuation of that feel. But when you think about other Metro stations, it’s a little less clear as to how dense, urban and mixed-use they will be. My sense is they will probably be more residential driven than the amount of commercial space at Reston Town Center. It will take more time and be a little more organic at some of the other stations, because there isn’t already that critical mass. We think it’s a great way for folks west and east to get to Reston Town Center and it’s a huge investment the public is making, so it should be a great thing for our property.
Bisnow: What is your outlook on the office market in Reston and Fairfax County going forward? Do you think the demand will be there to fill up the new space you're planning?
Otteni: I think what is great about our portfolio is, while we certainly experience the occasional dip here and there, it has historically been a place where people want to be. I think the trend we’re seeing, people want to be in area they can live, work and play. They want to be in a mixed-use urban or urban-like environment. That’s why we feel bullish about this development because this is that. It's mass-transit accessible. It’s a very urban-suburban market and we think it will continue to do better than average in terms of its leasing success, whether that’s lease-up velocity, rents or retention. We’re bullish. We think it’s a great opportunity and world-class tenants will continue to be attracted.
Bisnow: What is your overall outlook on Fairfax County's future?
Otteni: Fairfax County has so many great things going for it, whether it’s the stock of affordable housing, schools, world-class infrastructure or world-class companies. We obviously remain bullish on Fairfax County as a whole. The cyclicality of the general real estate market notwithstanding, we feel really good and it's among our biggest investments in the region and as a company, so we remain bullish on Fairfax long term.