WASHINGTON — Discovery Communications is leaving downtown Silver Spring to move to New York City, leaving behind a huge headquarters building that it plans to sell. But who is going to buy it?
The 10-story, 550,000-square-foot building, famously known for the gigantic shark, “Chompie,” that covered its top floors during the cable TV company’s annual Shark Week, is a hulk of a presence at Colesville Road and Georgia Avenue, and it’s a great location — a block from the AFI Silver Theater and The Fillmore.
But the building, completed in 2003 and with an assessed value of $148 million, is also far too large for any one company to occupy, barring the move of a major headquarters or government agency (and it’s too small for the FBI, which is looking for wiggle room somewhere around 2 million square feet).
Only three out of 26 commercial real estate deals that were single-buyer transactions over 500,000 square feet in the Washington area since 2008 have been private-sector deals (Fannie Mae, The Advisory Board and Marriott), so odds of getting a whale of a single private company to take down the entire building are limited.
Discovery doesn’t plan to move until mid-2019 and hasn’t yet engaged brokers to market the property, but the commercial real estate community is already talking about it.
It will likely go to an investor who will market the building to multiple companies.
“The demand in that submarket outside of government is relatively lackluster. If they do multi-tenant this building, the re-lease of it will be pretty slow, and you’ve got to think at least 24 to 36 months,” Nate Edwards, at Cushman & Wakefield, told WTOP.
The Silver Spring market itself has one of the lower vacancy rates as a whole in the Washington region, outside of D.C.’s central business district, D.C’s West End and Capitol Riverfront, Old Town and Bethesda, but there is not a lot of large tenant demand outside of the government.
That doesn’t mean there isn’t single-buyer potential, says Edwards, who says the building might attract a large medical user or large school.
Downtown Silver Spring will feel the loss of more than 1,000 employees who worked at Discovery headquarters, and Discovery gets much credit for the revitalization of downtown Silver Spring, but the loss of Discovery will not be devastating, and marketing downtown Silver Spring won’t be a challenge.
“It has a lot of what’s really succeeding today. Access to multimodal transit options, a good mixed-use feel with plenty of retail and residential options, and more of a live-work-play environment, so that’s a big plus for the marketing effort,” Edwards said.
Discovery will maintain a presence in Maryland, and in Northern Virginia, but the number of jobs that will stay hasn’t been determined.
