Inside The New Office Space At The Wharf, Ahead Of Phase 2 Debut
As The Wharf prepares for the grand opening of its 1.3M SF second phase in October, the Hoffman-Madison Waterfront development team is working to fill the 25% of office space left available in the project amid the tepid leasing market in D.C.
Phase 2's anchor tenant, Williams & Connolly, has already begun using its space at the development's 680 Maine Ave. SW building, but the neighboring 670 Maine still has about 114K SF of leasable space available. Hoffman & Associates Chief Investment Officer Jon McAvoy, who led Bisnow on a tour of the building last week, said he is hopeful it will lease up soon.
McAvoy said the building is poised to take advantage of the ongoing trend of tenants fleeing older buildings for newer trophy product, and he sees The Wharf as uniquely positioned in the city's office market. With employers looking for every opportunity to entice their workers back into the office and retain their talent, McAvoy believes the development's master-planned mix of amenities will be enough to attract a robust roster of office tenants.
“What's the hardest thing to do right now? Hire new people,” McAvoy told Bisnow during the tour. “We want to keep those people, keep up the retention and this enables you to do something that is harder now than ever.”
D.C.’s riverfront has been booming since The Wharf’s first phase delivered in October 2017 with two new office buildings, plus three hotels and a host of multifamily, restaurants and retail. The Wharf's second phase broke ground in 2019, featuring more than 300 multifamily units, a hotel and over 100K SF of retail in addition to the office.
The nearby Capitol Riverfront neighborhood has also delivered new office space, including at Monument Realty’s One M, which completed in 2020, and new space at Columbia Property Trust’s 80 M St. SE. At The Yards, Brookfield broke ground in 2020 on a new office building anchored by Chemonics.
The Southwest waterfront has nearly 90K SF of additional office in the pipeline, and a vacancy rate at 13.7%, according to a second-quarter office report from CBRE.
But The Wharf, where Phase 2 move-ins are set to begin soon and splashy new retail concepts from the likes of Gordon Ramsay and the Boardwalk Bar & Arcade have signed on for space, has grown up itself.
Despite the competition and difficult office leasing market, McAvoy is optimistic about 670 Maine. He said the building's amenities, including terraces on multiple levels, a high-tech conference center on the penthouse and unparalleled views of the waterfront and Capitol building, make the property, which is completing interior renovations now, one of the most competitive offices on the market today.
“Other people may deliver other buildings, but they're not going to deliver this experience,” McAvoy said. “Someone else delivering something in Southeast D.C. or Southwest, they’re going to struggle to compete with this product.”
The product has already drawn substantial interest, McAvoy said. 680 Maine is fully leased by Williams & Connolly, which signed on for 300K SF in 2018 to anchor the new development.
Floors eight, nine and 10 in 670 Maine are fully leased, and additional floors are starting to be accounted for, McAvoy said. What’s more, he’s seeing a mix of tenants beyond law firms interested in the space, which he said is a repeat of the lease-up experience the development team saw in The Wharf’s first phase offices.
“We have a mix of tenancy that’s spectacular and we expect the same thing to unfold here as well,” McAvoy said.
One area of focus for the developers at 670 Maine was to create a penthouse floor with conferencing space that’s shared by all the building’s tenants.
McAvoy said creating a shared conference space as opposed to building those breakout spaces for each tenant allows them to focus their individual footprints on desk and office space with the knowledge that they can reserve a penthouse meeting room with a view when bringing in guests or holding all-staff meetings.
The largest conference room, which can fit more than 100 people, features teleconferencing capabilities baked into the room, with microphones hidden in the finishes and projectors at each end of the space.
The sightlines were also a priority for the developer. The penthouse level includes a view of the Capitol building, but The Wharf’s developers also ensured that 670 Maine’s neighbor, The Pendry hotel, had a facade that stepped back from the office slightly to avoid cutting off a sweeping view of the master-planned development.
The Pendry’s rooms also feature windows that face out toward the water and not toward the office, further ensuring privacy for both hotel guests and office tenants. In that same vein, Williams & Connolly’s tower features reflective-glazed windows and strong soundproofing to ensure privacy for one of the largest law firms in D.C.
“That’s something we had to think about was how do you, as someone like Williams & Connolly who is an active litigation firm, hold active negotiations without being disturbed?” McAvoy said.
From inside 670 Maine, outside noise is barely audible, including helicopters flying from nearby Reagan National Airport to the White House or Naval Observatory.
But the developers still wanted to find novel ways to bring the outside in. In addition to penthouse terraces, the two office buildings are connected by a ring-shaped bridge, which forms the Oculus under which guests arrive.
Second-floor office tenants have their own terraces, which McAvoy said was important to provide additional amenities to tenants who are typically lower on the totem pole.
“You might be a 2K SF tenant in this building but you’re getting a top floor experience,” McAvoy said.
Other amenities include a 136-person capacity gym with private training room, terrace and towel service and an on-site property manager with a front desk attendant.
The Wharf’s developers had the good fortune to lock in construction pricing for the office building in 2019, before the pandemic and inflation dramatically boosted costs. McAvoy estimates that if 670 and 680 Maine were to be constructed today, they’d cost anywhere from 30% to 35% more.
Instead, 670 Maine is poised to welcome tenants in the new year, and Williams & Connolly has already begun using its space. The office complex's retail component is 75% leased, and features concepts from national retailers like Gordon Ramsay and Kilwins plus local offerings from restaurateurs like Lucky Buns and Matchbox.
Once new tenants arrive, they’ll join office workers that have already moved into The Wharf’s Phase 1 office buildings. McAvoy said he sees the development as one big "playground," and he often sees office workers taking calls on the main waterfront promenade.
“It changes your perspective on how to engage with each other and the environment that you’re in," he said.