- The Washington Times - Wednesday, August 25, 2004

America Online has leased more than 150,000 square feet in one of Loudoun County’s largest office complexes, to give its workers more space and allow its business to expand.

The Sterling, Va., Internet provider signed a seven-year lease to be the sole tenant in Loudoun Gateway IV, a 102,000-square-foot building at the intersection of routes 28 and 606, one mile north of the Dulles Toll Road. It also signed a one-year lease for 52,000 square feet at Loudoun Gateway II. Both buildings are part of the Loudoun Gateway office park, which has five buildings on more than 38 acres.

“It’s a great property for us because it’s within close proximity to the Dulles campus,” said AOL spokesman Nicolas Graham. “The [buildings] are new, they’re cutting edge … it’s a high-profile property.”

The Loudoun Gateway complex is about three miles north of AOL’s main headquarters.

AOL declined to release financial terms of the leases. Office space in Loudoun County has been leasing at an average of $20 to $22 per square foot per year, according to real estate research firm Delta Associates. Some real estate analysts suggested, however, that AOL could have paid more because the buildings are relatively new.

About 100 AOL workers are already in Loudoun Gateway II. Between 400 and 500 workers will move into the Loudoun Gateway IV property by December. The inside construction of Loudoun Gateway IV has not been completed.

Mr. Graham said AOL does not know which workers will move into the Loudoun Gateway IV site. But he said leasing the properties will give workers extra space to operate and free up room at the company’s seven-building headquarters complex in Sterling. The company is expected to run shuttle buses between the main campus and Loudoun Gateway offices.

AOL has about 4,700 employees in the Washington area. In addition to its main headquarters, the company owns buildings in Vienna, Reston and Manassas and is selling one facility in Gainesville, Va. The company in 2002 bought 70 acresaround its headquarters campus.

Mr. Graham said leasing properties at Loudoun Gateway will provide AOL with more flexibility if it needs to add workers. Both deals allow for additional space to be leased, and the Loudoun Gateway IV lease can be extended or terminated after five years.

AOL, a division of Time Warner Inc., is the world’s largest Internet provider, with more than 23 million subscribers. It has been losing hundreds of thousands of subscribers over the past several quarters, as Internet users have switched to broadband connections. However, the company did report a 23 percent increase in advertising revenue during the second quarter of the year.

Real estate services firm CB Richard Ellis helped broker the leases on behalf of AOL. Grubb and Ellis worked on behalf of the Alter Group, the Skokie, Ill., developer that owns the complex. Grubb and Ellis declined to comment on the deal. The Alter Group did not return calls for comment.

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