The COVID-19 crisis, on top of rising construction costs, has placed additional strain on the office sector this year. With the real estate industry still facing many uncertainties, new office developments across the country are being delayed, with several large markets such as Washington, D.C., seeing no new deliveries in the first two quarters of the year, according to Yardi Matrix data.
However, May data shows that, with Amazon breaking ground on its 22-story HQ2 towers in Pentagon City at the beginning of the year, the metro’s pipeline spans 36 projects accounting for 12.4 million square feet. More than 3 million square feet is expected to come online by year-end. The table below displays the 10 largest projects underway as of May, based on Yardi Matrix data. Some projects have been grouped according to location.
One of the most anticipated developments in downtown Bethesda, Md., Avocet Tower, features a Pickard Chilton design comprising a hotel and office tower. StonebridgeCarras’ $300 million project was initially scheduled for completion in the summer of 2021, but construction is expected to last longer.
The 530,000-square-foot glass tower is topped with a 7,500-square-foot sky terrace and is expected to feature advanced mechanical systems, secured bicycle storage and electric vehicle charging stations. The development, located at 7373 Wisconsin Ave., is designed to meet LEED Platinum standards.
Sentinel Square III
Trammell Crow Co. and partner MetLife Real Estate are close to finalizing the third phase of the 1.3 million-square-foot Sentinel Square development in NoMa. Trammell Crow bought the 1.5-acre site in 2017 and tapped SmithGroupJJR to design the building.
The 540,000-square-foot Sentinel Square III will be occupied almost entirely by the Federal Communications Commissions, which requested some major changes be made to the original design, including removing one floor in order to make the lobby taller. The new 11-story building is separated from Sentinel II through an open-air courtyard. Located at 45 L St. NW, the project is aiming for LEED Silver certification.
One Town Center at Camp Springs
The 581,224-square-foot project is located at 5900 Capital Gateway Drive in the Upper Marlboro submarket. Slated for completion in June, the development will serve as United States Citizenship and Immigration Services’ new headquarters. Peter N.G. Schwartz Management Co. broke ground on the project in 2017 after receiving $245.1 million in credit tenant construction financing from CTL Capital.
Capital One Campus – Block A
The upcoming 613,000-square-foot building is one of several developments within Capital One’s Tysons campus in the Tysons Corner submarket. The company has wanted to add more office space since completing its main headquarters building—the tallest in the greater Washington area—in 2018. Located at 1675 Capital One Drive, the new building is expected to come online in early 2021 and is designed to meet LEED Silver standards.
Located at 6595 Springfield Center Drive, the Transportation Security Administration headquarters will encompass 625,000 square feet and provide access to the Metro station via a connector road. TSA expects to relocate its headquarters from Arlington, Va., to Springfield, Va., in the fall, after the seven-story building is completed. Boston Properties was the initial owner of the project, but the company sold the development to USAA Real Estate for $98.1 million at the beginning of 2019.
Reston Gateway – Buildings A & B
Buildings A & B represent the first phase of Boston Properties’ Reston Gateway project—a mixed-use development including office, retail, restaurant and residential space, as well as an athletic field across 450 acres. Building A is expected to encompass 807,000 square feet spanning 28 stories, 7,000 square feet of retail space and a 4,000-square-foot mechanical penthouse, as well as a six-level parking structure. Fannie Mae will anchor the building according to a lease agreement signed in 2018.
Building B will be a smaller, 20-story building encompassing 623,000 square feet of office space, with retail and parking. The two buildings will be connected via a podium floor and will be near the RTC Metro Station and the Reston Town Center. The developer, Clark Construction, is expected to complete both projects in the first quarter of 2022, with Duda|Paine Architects providing architectural services.
The Bethesda Center
A joint venture between The Bernstein Cos. and Boston Properties broke ground on the new Marriott International headquarters in downtown Bethesda, Md., in 2018. The $600 million campus is expected to include a 785,000-square-foot office building, 238-key hotel, childcare center, cafeteria and fitness center. Located at 7750 Wisconsin Ave., the development will be accessible via the Bethesda Metro Station. The Bethesda Center has been designed to meet LEED Gold standards and is expected to open in mid-2022.
HQ2 – Metropolitan Park 6 & 7/8
At the beginning of the year, Amazon finally started demolition work at its much-touted development in Crystal City, Va. The three vacant warehouses located on the former Metropolitan Park site are being torn down to make way for two office properties totaling more than 2.1 million square feet.
The first phase of the project will also include a daycare center that will be open to Amazon’s employees and residents in the area. The site is accessible via interstates 295, 395 and 495 and is a short commute from downtown D.C. Upon completion in the first quarter of 2023, the campus is expected to house more than 25,000 employees.