Architectural firm McKissack & McKissack has reached a deal to shift its D.C. offices to 901 K St. NW, where it will take up the sixth floor of the 12-story building by Mount Vernon Square.
The firm has signed an 11-year lease for 22,789 square feet as part of a relocation from 1401 New York Ave. NW. West, Lane & Schlager Principal Gary Schlager, who was part of the team representing McKissack, said the firm’s search came at an ideal time for tenants seeking new space in the District’s Class A office market, and the firm weighed a range of properties throughout downtown D.C. and its East End.
Schlager said the firm chose 901 K, which is about 86 percent leased, for a variety of reasons including compelling financial terms. Space in the 260,843-square-foot building is going for about $42 per square foot triple net, according to CoStar Group Inc.
“We had a number of aggressive offers, and the competitive field was unlike anything I have seen in years,” Schlager said. “McKissack & McKissack had the luxury of selecting from a variety of top-tier sponsors and was really able to define its own value proposition and structure a transaction that will stand the test of time.” West Lane Senior Vice President Ganon Rich was also part of team representing McKissack.
The lease is one of a handful of new deals that could help to boost D.C.’s office market, which was virtually stagnant in terms of leasing activity for the first three months of the year according to reports from the region’s major brokerage firms this week.
Blake Real Estate reported today that the Certified Financial Planner Board of Standards Inc. has leased 26,712 square feet at 1425 K St. NW, a 214,029-square-foot building that is about 84 percent leased. The firm had previously been subleasing a smaller chunk of space in the building but agreed to take a direct lease starting in March 2014. The American Farmland Trust also agreed to lease 8,000 square feet from Blake at 1150 Connecticut Ave. NW and Aquent LLC has taken roughly 7,400 square feet at 1025 Connecticut Ave. NW.
Blake Executive Vice President Steve Lustgarten said there is a fair amount of uncertainty among tenants these days, especially those whose financial fates are tied to the federal government. At the same time, he said Blake has been able to reassure many tenants by offering them early outs to their real estate leases if the problems they are worried about, such as the loss of a federal contract, come to pass.
“It’s a partnership,” Lustgarten said. “The archaic landlord-against-tenant concept hasn’t worked for years. If anything, I’m finding landlords and tenants are having better communication and teaming up to make it work.”
Lustgarten estimated Blake has struck commitments or signed leases for roughly 400,000 square feet of space, including 22 signed leases for more than 70,000 square feet, since the first of the year.
Elsewhere in the region, Bridges System Integrated LLC has leased 15,468 square feet from First Potomac Realty Trust in its Van Buren Office Park in Herndon. First Potomac also signed Blue River Information Technology LLC to 4,320 square feet in the park just off Fairfax County Parkway, which is about 94 percent leased.