- The Washington Times - Wednesday, August 9, 2006

Republic Property Trust has agreed to a $48.3 million acquisition of Dulles Park Technology Center from Cornerstone Real Estate Advisors in a move intended to give the real estate investment trust a bigger stake in Dulles corridor office properties.

The deal comes with 7.6 acres of parking space that Republic Property Trust says it might use to build another office building in Herndon.

“The potential to develop additional office space at no additional land costs is a big benefit for us,” said Republic Chief Executive Officer Mark Keller.

But as nearly every major office property developer in the Washington area puts up new buildings along the Dulles Toll Road in Herndon and Reston, some real estate executives are wondering when the market will become saturated.

“Increased leasing activity by the telecom and technology sectors along with continued strong demand from both the federal government and defense contractor sectors has sparked increased development activity in Northern Virginia,” John Sikaitis, research manager for the real estate services firm Jones Lang LaSalle, said in a recent report on the region’s market conditions.

“At the end of the second quarter, more than 5.6 million square feet were under construction, 29 percent of the space preleased. While we expect the majority of the new developments to be leased at delivery or shortly thereafter, developers must be cautious in starting new spec projects beyond 2006 as demand could soften in 2008 and beyond,” Mr. Sikaitis said.

Spec, or speculative, projects refers to buildings that are not leased before they are built.

Nevertheless, many developers are betting on other assessments, such as the fact that the Metropolitan Washington area absorbed 2.9 million square feet of office space in the first half of this year, the fastest pace in six years. Much of the growth came from the kind of military contractors, technology and government agencies frequently found along the Dulles corridor.

Examples include the FBI’s recent lease for 165,000 square feet at 801 Follin Lane in Herndon and U.S. Customs signing a 60,000-square-foot lease at Worldgate Plaza III at 12825 Worldgate Drive.

Dulles Park is giving Republic a five-story office building with about 181,000 rentable square feet , which the company plans to lease at about $28 per square foot. It is within one city block of the proposed Route 28 Metrorail Station and next to Republic’s seven-building office park, Campus at Dulles Technology Center. The office space is 70 percent occupied by U.S. government agencies, IBM and government contractors.

In other news …

cKSI Services is heaping on incentives for new tenants at its Metropolitan at Reston Town Center apartments.

The real estate development company is giving out laptop computers and discounts at local merchants for anyone who signs a lease.

The apartments rent for $1,300 to $3,700 per month, with residents scheduled to begin occupancy by early December.

The laptops are supposed to underscore the role of the 21-story, 288-unit complex as a residence for busy professionals, KSI Services said.

Other high-tech amenities include a virtual concierge, wireless Internet connections and fiber-optic technology in each apartment for digital television and music.

Property Lines runs on Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail [email protected]

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