Why demand for mixed-use office space grows after Covid – Business Observer
Tysons, Va., Is an urban center in the upstate that is technically small – a population of less than 25,000 – but boasts a corporate presence that far exceeds its size. Home to businesses from Capital One and Booz Allen Hamilton to Freddie Mac, it has a plethora of impressive office buildings and complexes.
As the COVID-19 pandemic ends, demand for office space in Tysons appears to be going against some trends, according to local developers and brokers.
In a market environment characterized by lease renewals, Tysons saw the only new lease in Northern Virginia over 50,000 square feet in the second quarter of 2021, according to CBRE’s second quarter research. Gross rental activity for the Northern Virginia market totaled 2.1 million square feet in the three months to June, up 62% from the previous quarter, CBRE said.
The Gensler-designed Boro Tower, co-developed by the Meridian Group and the Rockefeller Group, and completed in 2019 as part of Meridian’s 4.5 million square foot Boro district, has seen its activity increase dramatically since mid-July. the year as companies assess the return to office plans and future workplace requirements.
Located in Tysons across from the Greensboro subway station, the building’s accolades in the market are numerous, ranging from high rents and the first DOAS system in the area’s Hill submarket to a diverse tenant group dotted around law, technology, media, fire and more. Tenants of the tower include KPMG, Tegna, Hogan Lovells, Womble Bond Dickinson, and Alion Science and Technology, among others.
The high demand for the new building – currently 80% leased with active negotiations for more than 10% of the building’s remaining available space – stems from more than just a flight to post-COVID quality. According to the owners, tenants in the market are drawn to a combination of high-quality space, accessibility and an abundance of amenities – the kind of experiential space that is inherently offered by mixed-use development.
The 20-story Boro Tower is so named because of its location in the Boro, a 15-acre mixed-use complex that offers a wealth of on-site options for work, recreation, entertainment, shopping and dining. .
The Boro Tower features a glittering glass curtain wall, a ceiling height of up to 10 feet, and efficient floor plates that minimize columns while accentuating daylight and majestic views of the Blue Ridge Mountains in downtown Washington. The building’s extensive amenities include a rooftop terrace, fitness center, and over 10,000 square feet of retail space in the lobby.
Hilary Allard Goldfarb, Senior Managing Director and Head of Mid-Atlantic Development for The Rockefeller Group, feels understandable pride in Boro Tower’s early successes.
“Tysons has always enjoyed convenience and quality,” Goldfarb said. “But what we’re seeing with the Boro Tower is a strong claim that companies are drawn to mixed-use projects because they help employees get the most out of their day – providing more opportunities for personal enjoyment. and professional with less friction between the office and home. ”
Gary Block, partner and chief investment officer at The Meridian Group, echoes this sentiment.
“One thing we have always believed at The Meridian Group is that if we can create an innovative and special place in a central business district or a suburban urban district, we will be successful in renting. This has been our mantra from day one, ”said Block, who emphasizes the need for projects of this quality now. “These innovative urban neighborhoods are even more important after COVID than they were before COVID, because not only do people want clean air and outdoor spaces, which we have at Boro Tower, but businesses have today need a reason to motivate their employees to come. back to work. Our building does that.
The many desirable features of the Boro Tower are completely tenant driven, designed to make the Boro Tower a place people would want to spend a day.
“We made decisions based on health, wellness and thermal comfort,” Goldfarb said. “Our HVAC system is a DOAS dedicated outdoor air system, which means we circulate 100% outdoor air throughout the building, making us the first building in the submarket to offer this. “
Goldfarb also emphasizes the architecture and design of the building, noting that there is simply nothing else like it in the submarket.
“One of the things I’m most proud of is that the building’s design is crisp, contemporary, and compatible with the region, which you don’t often get,” Goldfarb said. “The reason the Meridian / Rockefeller partnership is so strong is that we both believe in the added value of good design. We all know nothing sells. You need really top-notch, top-notch talent, especially in architecture.
Another proof of the building’s appeal is that the Boro Tower commands the highest rent in the submarket.
“To date, we are the only building in this market with rents of $ 60,” Goldfarb said. “With each new lease we sign, our rent has steadily increased, even through COVID. It speaks of quality, just like the Boro district as a whole. Hill’s submarket beats occupancy in the rest of Tysons by five percentage points.
Goldfarb also notes that the way the building integrates with other offerings in the Boro district creates a unique and welcoming community, referring to this integration as a suburb of modernization.
“This combination of being current but also compatible with the larger urban fabric of Tysons is something we are very proud of,” said Goldfarb. “The Boro Tower is not a high-quality office building in a suburban parking lot. It’s part of a highly desirable mixed-use environment that works so well because it’s in Tysons. “
She points out that The Boro includes a brand new residential community, downstairs restaurants, and Town Square programming, all of which make it not an office community, but a true neighborhood within an accessible and dynamic sub-market.
“You go there on a weekday evening and people are in the street. You feel like you are part of a place, ”she said. “Gary and Meridian have created a network of urban streets and an urban environment. “
“There’s a Whole Foods, a Showplace Icon Theater, a plethora of casual and fast food restaurants, and an acre park,” Block said. “Companies that want to return to the office want an offer that excites their employees, and that’s what the Boro Tower offers, not only in itself, but also as part of The Boro district. “
Considering all that the Boro Tower has to offer tenants, the popularity of the building shows that as we continue to learn to navigate our world through the COVID quagmire, the flight to quality and the the appeal of mixed uses will be more pronounced than ever.
“With everything we’ve seen from COVID, even with all the challenges in the market, this tower shows that quality is always in demand,” Goldfarb said. “In fact, it is perhaps more important than ever that this kind of quality is present for real success.”