BXP's New Downtown Office Project Hits 87% Preleased With 126K SF Law Firm Deal
Law firm Cooley LLP has signed a big deal at a planned downtown D.C. office development as new trophy space continues to dominate the leasing market.
The Palo Alto, California-based firm signed a 20-year lease for 126K SF at 725 12th St. NW, where BXP plans to demolish a 33-year-old building and develop a new 320K SF office, the developer announced Thursday.
The deal, which the Washington Business Journal reported was in the works last month, comes three months after BXP signed law firm McDermott Will & Emery to 150K SF across the top five floors of the project.
The latest lease brings the project to 87% preleased before it has even started construction, a sign of the high demand for increasingly scarce large blocks of trophy office space in D.C.
The project, designed by Duda│Paine Architects, is expected to begin construction this year and deliver in 2028. It sits above the Metro Center station at the corner of 12th and G Streets NW.
BXP bought the property in December for $34M from Hines, which had previously been in talks to hand the keys to its lender. The 302K SF building constructed in 1992 lost its sole occupant, law firm Williams & Connolly, in 2022 when it moved to The Wharf.
JLL's Evan Behr represented BXP in leasing the project, while Newmark's Aaron Katz and Mike Shuler represented Cooley.
Cooley's D.C. office today is in a 130K SF space at 1299 Pennsylvania Ave. NW, a building owned by CBRE Global Investors. It also leases 72K SF in Reston Town Center, also owned by BXP, which formerly went by Boston Properties.
BXP Executive Vice President Jake Stroman said the deal shows the value that professional service firms put on “premier, well-located properties as an essential component of their success.”
“These firms prioritize workplaces that optimize client engagement and employee productivity and provide a platform for scalable growth,” he said in a statement.
The trophy segment of D.C.'s office market had a vacancy rate of 12.2% at the end of the first quarter, according to CBRE, much lower than 22.6% for the overall market. Only one new trophy building is under construction today: Stonebridge and Rockefeller Group's redevelopment of the former WMATA headquarters that also landed a law firm prelease.
The tightening of the trophy market has pushed rents up: CBRE reported that trophy asking rents last quarter averaged $91.21 per SF, up from $86.74 per SF a year earlier.
