- The Washington Times - Friday, January 31, 2003

Plaza America is a rarity. The 1.2 million-square-foot office and retail complex, located in Reston, is now more than 90 percent leased, an unusual occurrence for any property located outside the Beltway in Northern Virginia, where office-vacancy rates are the highest in the region.
NCI Information Systems agreed to lease 76,716 square feet for its international headquarters at Plaza America Tower IV to put the four-building complex over the 90 percent barrier. The complex is jointly owned by Atlantic Realty of Tysons Corner and Intertech Corporation of New York.
"We surely can say it's been tough," said Intertech representative Vicki Salamon. "It's clearly a difficult market because there's not an abundance of tenants."
The office vacancy rate in Reston, including sublease space, is 22.6 percent, according to CoStar Group Inc.
Ms. Salamon declined to reveal specifically how much NCI paid for its lease, but said it fell between the area's average of $27 to $30 per square foot.
Ground broke on Plaza America about four years ago, just before the collapse of the technology sector that caused many companies in Northern Virginia to fold and leave empty office space. It was bad timing, but Intertech and Atlantic scrambled to fill space and quickly landed DynCorp, a local defense contractor. The fourth tower, however, came on the market in April with less than 10 percent of its space committed to tenants.
Plaza America's location outside the Beltway has made it a tough sell, but many tenants are drawn to its base of amenities, including extensive retail, 4,000 connected parking spots and a community center, Ms. Salamon said.
"They're really getting a lot of value for today's dollar," she said.
And Fairfax County is a few million dollars richer, too. Intertech and Atlantic Realty recently paid $1.8 million to the county, thus completing their requirement of $4 million to fund transportation improvements needed to service the Plaza America complex.
Keeping the Plaza America complex leased at 90 percent could prove difficult, real estate analysts said, because aside from large leases from NCI, DynCorp and Cable & Wireless, most of the Plaza America office tenants are companies occupying smaller bits of space with varying lease terms.
District developments
D.C. Mayor Anthony A. Williams wants to attract more development, and recent statistics indicate that he will have the big tenants required to make it happen.
Consider that of the 14 buildings now under construction in the District, only three do not have a lead tenant. On Capitol Hill alone, four projects representing 1.3 million square feet of new office space are more than 80 percent leased.
There is currently 4.8 million square feet of construction taking place in the District, compared with 4 million square feet in Northern Virginia and 1.4 million square feet in suburban Maryland. Only Alexandria, which will deliver the new, fully leased U.S. Patent and Trademark Office this year, has a higher rate of preleased office space under construction.
In other news
Corporate Office Properties Trust of Columbia said it closed the first phase of an agreement to buy 108 acres of land near the National Business Park in Anne Arundel County. The site, called Cedar Knolls, can support 1.3 million square feet of office space.
Interstate Hotels & Resorts Inc., formerly known as MeriStar Hospitality Corp., will move its headquarters from the District to Arlington. The company will occupy 84,668 square feet at 4501 N. Fairfax Drive.
Property Lines runs Fridays. Tim Lemke can be reached at tlemke@washingtontimes.com or 202/636-4836.

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