- The Washington Times - Tuesday, November 19, 2002

The sale of a fully leased, 11-story building earlier this month provided strong indication that Arlington remains one of the few office markets in the Washington region that has a beating heart.
The Bernstein Companies paid $58 million for Ballston Tower, a 225,000 square foot building located at 671 North Glebe Road in Arlington. Analysts said the building, which is fully leased by E-Trade Bank, is the latest in a flurry of development and leasing activity in the county, particularly in Ballston, located in Arlington's center.
"We think [Ballston] is one of the easiest place for people to get into," said Joe Galli, executive vice president of the Bernstein Companies. "We like to stay close to the urban core."
The proximity of Ballston and other nearby neighborhoods like Rosslyn, Virginia Square, Court House and Clarendon to the nation's capital has helped Arlington remain a stable office market while other areas have struggled.
The vacancy rate in Arlington County is 9.6 percent, considerably lower than vacancy rate for the rest of Northern Virginia. The vacancy rate in Alexandria is about 11 percent; in Loudoun County it is 17.6 percent and in Fairfax County it's 20.8 percent.
What's more, sublease space, or extra space that tenants leased but don't need, makes up just one-sixth of all vacant space in the county. Other markets have seen sublease space comprise nearly half of all vacant space.
Key to the low vacancy rate is the presence of the federal government and its contractors. About three-quarters of the 40 million square feet of office space in Arlington is used by the federal government and its contractors.
"What that says is stability," said Mary Peterson, senior vice president of Cassidy and Pinkard, a real estate services firm in the District.
The federal government has made life easy for leasing agents of a few large buildings. One Liberty Center, a 330,000 square-foot office building to be built on Wilson Boulevard in Ballston, is already leased entirely by the General Services Administration, even though the building won't be completed until 2005. The Office of Naval Research and Air Force Office of Scientific Research are expected to fully occupy it.
The Department of Defense, Fannie Mae, the U.S. Fish and Wildlife Service, the U.S. Post Office and Federal Deposit Insurance Corporation all have big offices in Arlington, as do several defense contractors including Lockheed Martin, of Bethesda, and Boeing Co.
Real estate executives looking to lease new buildings are targeting these types of tenants.
"I think we'll be attractive to those groups, and I think they'll be attracted principally to the location," said Doug Olson, vice president of leasing with Monument Realty, which is working to lease the 251,170 square-foot Ballston Point building scheduled for completion next fall.
New development projects all over Arlington have helped attract new tenants, and analysts said Ballston has benefited perhaps more than any other neighborhood. The area got a big boost earlier this year when the Washington Capitals team announced it would move its practice facility to an ice skating center near the Ballston Common Mall. The mall itself has also undergone extensive renovations.
Other projects underway in Ballston include Arlington Gateway, a 350,000 square-foot, mixed-used complex located across from the Ballston Metro station and the Ellipse at 4401 Wilson Blvd., a 240,000 square-foot complex owned by the National Rural Electric Cooperative Association.
Arlington is also looking into expanding the Metro Bus Yard, a 9.8-acre site, into a large mixed-use development.


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