NoMa Just Landed the Biggest Office Lease of the Year
StonebridgeCarras hooked the biggest fish in DC so far this year, signing the Department of Justice to 839k SF to occupy two full buildings in NoMa.
Three Constitution Square has sat empty since it opened in 2013, when principal Doug Firstenberg expected to fill it with private tenants. But over the past year, Doug’s been laser-focused on the DOJ, which also signed the lease that kicked off the 2.6M SF Construction Square complex, seven years ago. When complete, Constitution Square will include the Harris Teeter-anchored residential building Flats 130 (since sold to TIAA-CREF for $295M), the Hilton Garden Inn (sold to Magna Hospitality Group for $42.3M) and four office buildings. The DOJ was the first tenant signed in the entire development, pre-leasing the 600k SF Two Constitution Square in 2008. One Constitution Square, 350k SF at the corner of 1st and N streets NE, is occupied by the Consumer Finance Protection Bureau.
“It’s ironic that the lead tenant for Constitution Square is also the last tenant,” Doug (snapped last year) told Bisnow this morning after StonebridgeCarras announced the news in a late-night press release. “Yesterday was a good day,” he says. The DOJ will move into the vacant, 350k SF Three Constitution Square in late 2016 and into the build-to-suit, 475k SF Four Constitution Square at 150 M St NE when construction wraps up in 2018. The buildings will have a five-story connector, which will help with efficiencies considering the offices moving in will be a consolidation of four offices—all in the East End—that comprise about 1M SF. DOJ will occupy more than 1.4M SF of offices in Doug’s property. “There are a lot of lawyers coming to Constitution Square.” Cushman & Wakefield's Darian LeBlanc repped Stonebridge in the negotiations.
The lease is the biggest signed in the region this year: bigger than Fannie Mae signing with Carr Properties (above), bigger than the TSA’s lease in Alexandria and bigger than The Advisory Board Co's proposed lease in Mt. Vernon Triangle. It’s the biggest GSA lease in the District since 2001, when the Department of Transportation agreed to move to the Capitol Riverfront in 1.3M SF of JBG’s offices. Considering the FBI expects to make a decision on its 2.1M SF next year, it's clear the GSA is finally making progress on its long backlog of leases. “There was a period in 2012, ’13, ’14, where you really thought the taxpayer and government could have taken advantage of the market,” Doug says. “But recently you’ve got some really big deals moving along.”
For Doug and the office sector as a whole, this lease is a big win. For residents of NoMa, it’s a brief loss: on the site of Four Constitution Square, which will have a groundbreaking before 2015 is over, has sat Wunder Garten, a beer-drinking haven (that's Two and Three Constitution Square in the background). Wunder Garten plans to find new space for the next warm season—it’ll stay put until it gets too cold—and NoMa residents, including this reporter, will only hope that the building’s ground-floor retail includes the permanent watering hole NoMa so desperately needs. But NoMa wouldn’t be half of what it is today without Constitution Square. “It’s been an amazing process to do a land development deal in 2006, survive the recession, then survive the office downturn and see what NoMa is today,” Doug says.