Brandywine, Shooshan Co. JV to Develop 427 KSF Office Building in Arlington, Va.

By Scott Baltic, Contributing Editor

Brandywine Realty Trust, of Radnor, Pa., and an affiliate of The Shooshan Co., of Arlington, Va. have formed a joint venture to build a 426,900-square-foot office building in Arlington’s Ballston submarket, Brandywine announced Monday.

The building, known as 4040 Wilson Boulevard, will complete the 2.25 million-square-foot mixed-use Liberty Center complex being developed by Shooshan about two blocks from the Ballston Metro station. The 20-story office building will have 10,000 square feet of ground-floor retail, 544 below-grade parking spaces and a rooftop terrace and is planned for LEED-Gold certification.

RTKL is the architect for the building, which reportedly will be both Ballston’s tallest office tower and the largest building, both in size and investment, in Shooshan’s history.

Brandywine and Shooshan affiliate APA IV will each own 50 percent of 4040 Wilson and will share major decision-making. Shooshan will oversee development, leasing, property management and construction management, and Brandywine will assist in project development, marketing and leasing.

APA IV contributed the development’s initial equity and the land, and Brandywine will contribute up to $36.0 million in cash. Those contributions, augmented by third-party construction financing, will fully fund the projected development cost, which is undisclosed.

The property is fully entitled, and site engineering, planning and architectural design are complete. Site prep begins this month, with full construction to start once an anchor tenant is procured.

“Our participation … provides an investment in a newly created high-quality, efficient building that should deliver returns in excess of current acquisition yields and an investment basis at replacement cost in a highly desirable submarket where comparable sales have been at a premium to construction costs,” Gerard Sweeney, president & CEO of Brandywine Realty Trust, said in a release.

“After a very thorough search led by Sage Capital Advisors, we felt that [Brandywine] brought not only the excellent balance sheet that we were looking for, but a highly sophisticated team of real estate advisors led by Jerry Sweeney,” said Shooshan president John Shooshan in the release.

Liberty Center already comprises two residential buildings (one condo, one rental) that opened in 2008, plus a third, with 257 apartments, slated to open this winter; three office buildings totaling about 827,000 square feet; and a 183-key Marriott Residence Inn.

Unusually, two of the office buildings are higher-security structures leased to federal agencies. One Liberty Center (13 floors and 311,000 square feet) is the headquarters of the Office of Naval Research and is built to ISC Level 3 security.

675 N. Randolph, completed just last year, is 13 floors and 352,400 square feet and is the headquarters of the Defense Advanced Research Projects Agency. (In the late 1960s, what is now called DARPA developed ARPANET, the predecessor to the Internet.) This building has ISC Level 4 security.

ISC standards were developed by the Interagency Security Committee, composed of 21 federal agencies, following the Alfred P. Murrah Building bombing in 1995. The initial 2001 design criteria covered only new construction, but security standards for leased space were published in 2005.