Better Luck Next Year: 5 D.C. Office Buildings That Lost Anchor Tenants In 2018
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The largest D.C. office leases of 2018 turned some developers into big winners, but other landlords were not so lucky as their anchor office tenant announced plans to leave the building. While they represented losses this year, the departures present new opportunities for those landlords to reposition and re-lease second-generation buildings, many of which are centrally located in D.C.'s top office submarkets. Bisnow found five D.C. office buildings with anchor tenants that reached deals to move out this year.
55 M St. SE
- Landlord: Hines
- Departing Tenant: District Department of Transportation
- Building Size: 269K SF
- Year Constructed: 2009
DDOT will soon transport itself to a new office building in the Capitol Riverfront neighborhood. The agency reached a deal this year to anchor WC Smith's new project at 250 M St. SE, and it plans to move down the street from its current home at 55 M St. SE in 2021.
The move will leave a 150K SF vacancy at 55 M, a mixed-use building on top of the Navy Yard-Ballpark Metro station. Monument Realty and MacFarlane Partners in 2009 developed the building, which consists of 254K SF of office space and 15K SF of retail. Global real estate firm Hines bought the building for $141M in 2013, two years after DDOT moved in.
Sitting one block from Nationals Park, the building could attract companies looking to be close to the action. The fast-developing Capitol Riverfront neighborhood has emerged as a competitive office market, with several tenants deciding to relocate to the area from D.C.'s Central Business District.
1700 K St. NW
- Landlord: Joint venture of private real estate families
- Departing Tenant: Winston & Strawn
- Building Size: 390K SF
- Year Constructed: 2005
The law firm will vacate 1700 K St. NW, an office building across the street from Farragut Square. Cushman & Wakefield is marketing a 171K SF space in the building as coming available April 1, 2020. The contiguous block of space makes up the upper section of the building from the eighth to 12th floors.
The Class-A office building was constructed in 2005 and sits within one block of the Farragut North and Farragut West Metro stations, making it a likely contender for lobbying shops and law firms that want a prime K Street address.
1299 Pennsylvania Ave. NW
- Landlord: JBG Smith (under contract to sell)
- Departing Tenant: Baker Botts
- Building Size: 600K SF
- Year Constructed: 1993
The firm will relocate in 2020 from the Warner Building at 1299 Pennsylvania Ave. NW. The move will drop the 600K SF office building from nearly full occupancy to about 71% leased, according to Real Estate Alert. Facebook also departed a 20K SF space in the building with its deal last year to move to Terrell Place in Penn Quarter.
Following Baker Botts' announcement, JBG Smith last month reached an agreement to sell the building to CBRE Global Investors. The new owners will aim to fill the vacancy by courting tenants that want a Pennsylvania Avenue office just three blocks from the White House. The building is home to the historic Warner Theatre, which opened in 1924. Its office component was constructed in 1993 and renovated in 2012.
725 12th St. NW
- Landlord: Hines
- Departing Tenant: Williams & Connolly
- Building Size: 302K SF
- Year Constructed: 1992
The law firm will depart its longtime home at 725 12th St. NW, a building it has been looking to leave for at least two years. The building's owner, Hines, calls the building 700 Eleventh Street, naming Williams & Connolly as the lead tenant, while the law firm and D.C. property records list it as 725 12th St. NW.
The building, constructed in 1992, sits next to the Metro Center station, a transit hub where four Metro lines intersect. It is also four blocks east of the White House and four blocks west of Capital One Arena.
400 C St. SW
- Landlord: The Donohoe Cos.
- Departing Tenant: U.S. Agency for International Development
- Building Size: At least 389K SF
- Year Constructed: 1980
The General Services Administration in April signed a 348K SF lease for USAID to move into the vacant National Square building at 500 D St. SW. The agency will vacate space in multiple buildings, most notably Federal Center Plaza at 400 C St. SW.
The agency occupied 389K SF in the Federal Center Plaza building, with its lease set to expire in January. The Donohoe Cos. owns the building, which was constructed in 1980. It closed on a $130M refinancing deal for the property in 2013. The office building sits one block south of the National Mall, two blocks from the Federal Center Metro station and two blocks from L'Enfant Plaza, another major transit hub.