It’s been no secret that since the economy hit the skids, development and leasing activity down by Nationals Park has been taking a while to come along.
But here’s one piece of good news: The General Services Administration has signed a 10-year lease on behalf of he Bureau of Land Management for more than 94,000 square feet at 20 M Street SE, about two blocks from the ballpark. The agency will fill floors two through six. It the first tenant in the building, other than a Wachovia Bank branch on the ground floor.
“We think it’s a great lease that they signed,” said Michael Stevens, the executive director of the Capitol Riverfront Business Improvement District. “We welcome them to the neighborhood. It’s a good sign that a reputable federal agency has decided to come down here. There hadn’t been a lot of activity in the market, period, so it’s good that even in this recession that GSA pulled the trigger on behalf of the Bureau of Land Management. So it’s a very positive thing for the neighborhood.”
20 M Street, if you recall, is owned by the Lerner Enterprises, the primary business interest of the Lerner family, which also owns the Nationals. So they indirectly doubly benefit from the new lease.
Lerner senior vice president Ronald Charvet said the company was able to sell the BLM on the relative stability of the firm compared to other developers in the area. Monument Realty, for example, has faced money challenges since losing financing on several key projects in the neighborhood and elswhere.
(For you real estate folks who care, Cushman and Wakefield helped broker the deal on behalf of the Lerners, while Studley did the heavy lifting for the GSA.)
With the new tenant, the building is still about half-empty. And there are still many other buildings along the Capitol Riverfront with space to spare. Many agencies and companies may still be holding off on expanding or moving their office space because of the tough economic climate, but this lease at 20 M St. could be the first of many dominos to fall.
“Hopefully other agencies will start to see us as a very strong and established submarket in the Washington area,” Stevens said.
The BLM is expected to begin filling space in the first quarter of next year, likely bringing between 400 and 500 workers. That number of people, Stevens said, could help to bring new retail and entertainment options.
Stevens said that the office and retail market is still slow, but that the residential side of things has been relatively strong this year. About 2,100 residential units have been completed, with about 70 percent of those units filled. The BID expects to have close to 2,500 people living in that section of the city by year’s end. Steven also pointed to the development of several new parks in the area.
“It’s an established urban neighborhood now, of some consequence,” Stevens said. “And it’s going to keep growing.”