- The Washington Times - Wednesday, May 9, 2007

Work has started on Atlantic Corporate Park, a $45 million office complex in Sterling, Va., whose developers are betting that though the project is not right on the Dulles Toll Road, it’s close enough.

As the Dulles Corridor becomes crowded with high-priced office buildings, developers are moving out just far enough that they can offer lower rents but not far enough for long drives to the major airports, the Toll Road or long commutes for Loudoun County’s skilled work force.

“There is a limited opportunity for more office space” along the Dulles Toll Road, said John F. McKinney, president of JF McKinney & Associates, a co-developer of the 220,000 square-foot Atlantic Corporate Park at 45600 and 45610 Woodland Road.

The developers picked a spot about four miles north of the Toll Road, next to Dulles Town Crossing shopping mall and a short drive to Dulles Town Center regional mall. The neighborhood is mostly residences and small businesses.

Atlantic Corporate Park is being built on speculation, meaning no tenants signed leases before it is constructed.

Developers say their market studies show demand is strong enough that the wait would not be long for tenants.

“That’s such a burgeoning area out there that it’s great to be on the tollway but there’s a ton of demand,” said John Sikaitis, research director for Jones Lang LaSalle, leasing agent for Atlantic Corporate Park. “Any possible site is good.”

They are asking for a $29.75 per square foot lease rate, compared with leases in the mid-$30s for most of the Dulles Corridor.

They got the idea for the corporate park from nearby Lakeside Office Park in Sterling, which is nearly full despite being located about 11 miles from the Toll Road.

Loudoun County’s work force, with a 2.2 percent unemployment rate, was an added attraction.

The developers say they want to build near the homes of workers for their tenants who would hire them.

“It’s so tight labor-wise, we have to build where the labor is,” Mr. McKinney said.

The national unemployment rate stands at 4.5 percent, according to the Bureau of Labor Statistics.

Atlantic Corporate Park is owned by RREEF, a real estate investment advisory company that owns 14.5 million square feet of commercial space in the Washington area. The project is designed with two four-story brick buildings that will share a 1.5-acre park, with a landscaped open space between them.

The Dulles Corridor was the site for another major real estate transaction last week when Apollo Real Estate Investment Fund V and Monument Realty announced that they sold their Monument III office building for $54.85 million to a partnership of MGP Real Estate and the Praedium Group. The 193,138 square-foot building is located on the Dulles Toll Road in Herndon.

In other news

• Real estate executives made optimistic predictions in a survey released last week about the Washington area’s commercial real estate market for the next year.

Law firm DLA Piper, which sponsored the survey, found that 78 percent of all respondents describe their 12-month outlook for the U.S. commercial real estate industry as “bullish.”

The outlook was even better for Washington, where 88 percent of local respondents saw signs of a good market amid strong demand for property.

Property Lines appears on Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail tramstack@washingtontimes.com.

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