Things are getting better for Tysons’ economy, but slowly.
For offices around Tysons, the boom anticipated with the opening of the Metro in 2014 has been more of a trickle as growth continues at a more sluggish pace than initially anticipated.
The Office Submarket Report on Tysons Corner (their wording, not ours) by Ryan Rauner, an associate broker with Realty Markets, shows a market experiencing steady, if unremarkable, growth.
“Despite slow demand growth at the metro level, some has trickled down to Tysons, helping vacancies improve slightly over the past few years,” the report said. “An explosion in the residential population has not yet been matched by strong office-demand growth, despite four Metro stations opening in the submarket.”
While the expansion of the Capital One facility was a welcome boon, the report notes that most tenants are not actively expanding their footprint and there has been a spate of large move-outs, specifically pointing to public affairs consulting group Interel’s decision to leave Tysons for Washington D.C.’s East End Submarket.
Which isn’t to say there haven’t been plenty of new clients coming into Tysons. Apian announced in April it would be moving to Tysons while Cvent announced it would be expanding its local offices. Facebook is also reportedly looking for space at Tysons II to occupy between 75,000-85,000 square feet.
In 2015, office vacancies in Tysons were near 18 percent. Since then, vacancies have steadily fallen to 15.6 percent. Forecasts for the market show vacancies taking a dip in middle-2019 then continuing a steady decline.
The high supply of office and relatively low demand led office rents in Tysons to face a steep decline from 2012-2014. There’s been some growth there, averaging about 2 percent from 2015-2018, but the report also warned not to view that growth as a trend.
“High vacancies could continue weighing on growth,” the report said. “Rents have continued their increase this year but at a relatively slow pace — as of early December, rents had increased by roughly 2 percent for the year. At the metro level, rents surpassed their pre-recession peak in 2015, but those in [Tysons] are just now reaching that point.”
The report did note that Tysons isn’t alone in its lackluster rent growth, that several other locations across Fairfax have also faced similar low rents.
None of this has slowed construction, however. There was 1.2 million square feet of new office space created between 2014-2017. Last year also saw a record high of office space opening with Capital One’s 975,000 square foot expansion.
The report notes that there are two notable projects underway: The Boro and View at Tysons.
The Boro is anticipated to include 582,000 square feet of new office space. Boro Tower, the main office component of the project, is currently 70 percent pre-leased and is expected to be ready sometime this year.
The View at Tysons is further out in development but is expected to include 570,000 square feet of office space and the region’s tallest building as part of a 2.8 million-square-foot mixed-use development.
Big Names Among Potential Galleria Tenants — “Tysons Galleria… is in advanced talks with Tiffany & Co., Apple Inc. and gourmet grocer Balducci’s, in addition to high-end movie theater chain iPic, to open in portions of the space, according to two sources with knowledge of the discussions.” [Washington Business Journal]
Possible Money Motivation in McLean Double Murder — “The newly unsealed search warrant reveals why Megan Hargan might have carried out the crime: Megan’s mother discovered someone had attempted to wire ‘large amounts’ of money from her bank account on the day before her slaying. Pamela Hargan notified her bank the transfer was fraudulent. On the day of the killings, a second transfer was initiated to send money to a title company that was handling the purchase of a home by Megan in West Virginia.” [Washington Post]
Huge Tysons Development Still Looking for Office Anchor — “The developer behind Scotts Run had courted Amazon and Apple in hopes of landing an anchor for its planned 8M SF Tysons development, but neither of those panned out. Cityline Partners now continues to search for a tenant to kick off construction on the project’s office component. Cityline is one of several developers with major Tysons office projects waiting in the wings, hoping to sign pre-leases before breaking ground.” [Bisnow]
FCPS Offering Sub Gigs for Furloughed Feds — “Fairfax County Public Schools, the largest school district in Virginia, is offering substitute teaching positions to federal employees furloughed during the government shutdown. The hiring event will take place Friday, Jan. 11, from 2 p.m.-4:30 p.m. at the FCPS Administration Center, 8115 Gatehouse Road, Falls Church.” [Patch]
Senators Press Administration on Tax Refunds — “Virginia Senators Mark R. Warner and Tim Kaine (both D-Va.) have sent a letter to Treasury Secretary Steven Mnuchin asking how Virginia taxpayers will be affected by the government shutdown, which has left the Internal Revenue Service (IRS) short-staffed and potentially unprepared for the beginning of the 2019 tax-filing season.” [Fairfax Times]
McLean Foundation Sets Grant Deadline — “The McLean Community Foundation has set a deadline of Feb. 1 for non-profit organizations seeking to apply for its next round of grant funding. The foundation recently awarded nearly $67,000 in grants, including funding to McLean Little League and the Old Firehouse Teen Center, among others.” [InsideNova]
The area around the West Falls Church Transit Station could start to see some major development soon.
A public meeting is set for Tuesday (Jan. 15) from 7-9 p.m. in the Northern Virginia Center at 7054 Haycock Road to discussed the proposed changes. According to staff at District Supervisor John Foust’s office, more information about the proposed development will be presented at the meeting.
The plan is to allow a mix of uses on property belonging to the Washington Metropolitan Area Transit Authority (WMATA) and Virginia Tech. The WMATA proposal could include 150,000 square feet of office space, 500 multi-family units in townhomes, and 50,000 square feet of retail. Height limits, currently 45-65 feet, are proposed to go up to 65-85 feet.
Meanwhile, Virginia Tech is looking to add new institutional, office, retail and residential uses to the Northern Virginia Center property southwest of the WMATA property.
Plans for the site allow new development, so long as that work doesn’t interfere with the property’s use as a transit hub and the surrounding road network supports the development without diminishing access to the station.
The plans do not include the Village and Pavillion Condominiums to the southeast along Haycock Road.
In the planning documents, staff said the proposals would encourage a mix of uses in a compact, pedestrian-friendly urban form within a 5-7 minute walk of the station while preserving existing stable neighborhoods near the station.
Photo via Fairfax County Government
It’s not exactly the university regional experts say Tysons needs to thrive, but a local seminary could be moving into a new office across town this year.
Reformed Theological Seminary is currently seeking a permit for a college/university use in an existing office building at 8227 Old Courthouse Road. The new location would be double the size of the school’s current facility at 1651 Old Meadow Road, near the McLean Metro station.
The staff report says administrative staff would be on the site during the day with classes held Monday through Saturday. The site is anticipated to have 45 total full-time students, with up to 30 present at any given time.
The report notes that properties near the site are primarily being developed with office uses. The building is part of the South Old Courthouse subdistrict along the southern edge of Tysons, which acts as sort of a buffer between Tysons and residential neighborhoods on the outskirts of Vienna.
“The vision for this edge is to retain the existing low-rise and low-intensity character, which provides a transition in scale and intensity from mid-rise and high-rise commercial development along Leesburg Pike to adjacent single-family neighborhoods,” staff wrote.
The meeting is tentatively scheduled to be brought to the Planning Commission next Wednesday, Jan. 16, with a review at the Board of Supervisors on Jan. 22.
Vienna is working on updating its 50-year-old zoning code, but at last night’s Vienna Town Council meeting, the prospect of the code overhaul raised concerns that updating those ordinances could open a new path for a higher density Vienna.
The Town Council voted in favor of a resolution requesting funds from Fairfax County’s Economic Development Support Fund to update Vienna’s zoning and subdivision ordinances.
While new urban areas with comparatively lax zoning codes have sprung up in Tysons and Merrifield, Vienna is still working with ordinances put together in 1969, and many of those relics of earlier zoning codes written in the 1950s. Staff joked that some zoning ordinances are kept in notebooks in a management office.
Councilmember Carey Sienicki, who announced earlier that meeting that she would not be running for reelection later this year, compared the code to an old station wagon.
“We keep replacing parts and fixing the station wagon from the 1960s, but in reality, there’s a lot of cars out there that work without all of the little patches. We have to take a holistic approach to this and I think this is going to be a benefit to the town in the long run.”
But while the majority of the Council approved exploring new zoning codes, Councilmembers Pasha Majdi and Howard Springsteen, who have both frequently opposed higher density developments, voted against the request.
“When we say we’re not changing the zoning, that’s missing the issue,” said Majdi. “We have ordinances that are woefully out of date. OK, but what is the effect of bringing them up to date? Bringing them up to date means a potential developer has the ability to develop on that land financially viable project.”
Majdi said that rather than being a detriment, the town’s arcane zoning ordinances are a source of strength, forcing developers to work closely with Vienna staff if they want to get a development approved.
“I would bet my entire salary, $10,000, that the recommendation is going to result in higher density, which I oppose,” said Majdi. “When you update the code, you get higher density. If you want higher density, you got Tysons. This is a niche market for homebuyers with a niche appeal. It’s brought a lot of success to our town. We don’t have to be everything to everybody.”
But other members of the Council called Majdi’s bet. Councilmember Douglas Noble said he’d match Majdi’s $10,000 that updating zoning codes wouldn’t automatically result in higher levels of density unless that was something specifically sought out by the Town Council.
“We’re not going to be Tysons,” said Mayor Laurie DiRocco. “We’re not going to be Arlington. We’re going to update the code in a way that’s more understandable to residents, developers and everyone… so it’s all written down and not just in a booklet in a manager’s office.”
Majdi and Springsteen voted against the request, but the resolution was approved on a 5-2 vote.
File photo
Developer Buys NADA HQ — “The Meridian Group has acquired the NADA headquarters building and an adjacent development site, adding to its growing Boro District near the Greensboro Metro station in Tysons.” [Washington Business Journal]
Police Expanding Dressing Room Filming Case — Fairfax County Police have added Fair Lakes Promenade and Springfield Town Center to the list of shopping centers where they think 39-year-old Mumtaz Rauf secretly filmed women in the dressing room of stores like Forever 21, Gap, H&M, and Old Navy. Rauf was already suspected of filming at Fair Oaks Mall and Tysons Corner Center. [FCPD]
Park Fees May Increase — “Fees for using the Fairfax County Park Authority’s RECenters, gardens, historic sites, rental facilities and trails would increase under a slate of fee changes proposed by agency officials. The fee package would bring in an estimated $656,000 more revenue, officials said.” [InsideNova]
Tysons Startup Moving to California — “Tysons personal data startup Kork… recently got a $5 million term sheet from a New York-based private equity firm for its Series A round that values the company at $15 million… But the growth has also led to another big moment — Kork plans to move to California in the coming months, according to CEO and co-founder Robert Wensley. ‘We tried really hard to raise money here in D.C. but it’s impossible unless you are cybersecurity of some sort,’ Wensley said.” [Washington Business Journal]
Tysons Startup Raises $10 Million — “McLean-based Verato Inc., which provides cloud technology to consolidate medical records, has raised $10 million in Series C financing… Verato has already outgrown its 6,000-square-foot headquarters, so it plans to move in July to another Tysons space totaling 12,000 to 14,000 square feet.” [Washington Business Journal]
New Theater Coming to Tysons Galleria — “The soon-to-close Macy’s at Tysons Galleria will be replaced with multiple storefronts — including what appears to be an iPic movie theater — each with their own facade and materials to set them apart. That’s the word from a Fairfax County staff report published last week ahead of a planning commission hearing on an amended sign plan for the Galleria, which specifically addresses the 260,000-square-foot Macy’s. That store alone accounts for 30 percent of the upscale Galleria.” [Washington Business Journal]
Journalist’s Mosque Opposition Questioned — The leader of the community opposition to an expansion of the McLean Islamic Center’s prayer service is a reporter for the Wall Street Journal. The Washington Post’s Paul Farhi asks: should mainstream journalists be taking activist stances against religious institutions, even in a community setting? [Washington Post]
McLean Fire Causes Extensive Damage — The manage estimate from Friday’s big house fire in McLean is $1.1 million. Three people were displaced by the fire. The cause is still under investigation, according to the Fairfax County Fire Department. [Facebook]
Positive Results for I-66 Tolls — “Since HOV lanes went into effect on I-66 one year ago, the results have been largely positive. Carpooling has increased, and motorists are traveling at higher speeds and experiencing fewer collisions thanks to less congestion.” [Greater Greater Washington, WTOP]
DXC Makes Another Acquisition — “Tysons-based DXC Technology announced Monday plans to acquire Luxoft Holding Inc. (NYSE: LXFT) in a deal worth roughly $2 billion. The New York-based Luxoft provides digital strategy consulting and engineering services for countries across North America, Europe and Asia Pacific.” [Washington Business Journal, BusinessWire]
Photo courtesy @tysonspartners
It’s been nine years since Hazleton Laboratories, later Covance, closed the doors of its facility near Wolf Trap, infamous for its testing on monkeys and beagles — but life could soon be returning to the site.
Toll Brothers, a real estate developer, has plans to build 102 single-family homes northeast of the intersection of Route 7 and Towlston Road. The new project, called Grantstone, is a by-right development that has generated concern among neighbors who say the new development could overburden the nearby roads.
“Despite the fact that it is by-right, they’ve been cooperative,” said Dranesville District Supervisor John Foust. “We’ve had two well-attended community meetings to identify issues of concern. They’ve been willing to work with us. There’s not a lot of things we can do as long as they stick to subdivision ordinance.”
One of the biggest items of concern has been the new development’s impacts on Towlston Road, a two-lane street to the west of the property. The Great Falls Citizens Association passed a resolution last summer calling on the Virginia and Fairfax County departments of transportation to reexamine the issue of how much traffic will be generated on the surrounding streets.
Foust said the new housing development aligns fortuitously with a plan to widen Route 7 from four lanes to six lanes, as well as make new intersection improvements.
“The Department of Transportation will not grant access onto Route 7, so they’ll have to access the site from Towlston,” said Foust. “Eventually, that’s going to work very well since we’re widening Route 7 and the plan is to dramatically improve the intersection at Towlston. [That will mean] adding a couple lanes to the dedicated right and left turning lanes. But that’s a couple years down the road.”
While construction of 102 new homes was planned to start in early 2019, as of yesterday (Wednesday) most of the 113,000 square-foot property visible from outside the “do-not-enter” signs remains overgrown, with cracked roads the only sign of the former facilities. Foust said the development is currently in the site plan review process, and county records show the review was approved on Dec. 21.
Foust said the Grantstone development is being done across two phases, and the first home sales are unlikely to start for another two or three years.
“It’s a long process to go through,” said Foust. “That’s another reason the traffic issue is a little less concerning. We are concurrently making progress on Route 7 widening. By the time they’re fully built, I’m confident Route 7 will be widened.”
The Route 7 widening project hit a snag last summer when the costs came in at $95 million more than was originally estimated. In June, the Board of Supervisors voted to approve $40 million to help close the project’s funding gap.
Map via Fairfax County
Inova Shrinks Merrifield Plan — “Inova Health System has scrapped long-term plans for a 15 million-square-foot redevelopment of its Merrifield research and development campus for now, only moving forward on what was originally the first phase. The Falls Church health system decided to only advance the first, 5 million-square-foot phase of expansion for its Inova Center for Personalized Health” at the 117-acre former Exxon Mobil campus. [Washington Business Journal]
Honorable Disposal of Old Flags — “Covanta Fairfax and the Fairfax County Department of Public Works, in partnership with American Legion Post 177, have launched a U.S. flag retirement program to reverently dispose of old, worn American flags… [with] collection boxes at the I-66 Transfer Station, I-95 Landfill, Fairfax County Government Center and local police stations.” [Connection Newspapers]
WUSA 9 Goes Dark on Fios — Because of an ongoing carriage dispute between Verizon and Tysons-based Tegna, local CBS affiliate WUSA 9 has gone dark for Verizon Fios subscribers, potentially putting Super Bowl viewing at risk should it drag out for an extended period of time. [Washington Business Journal]
The Hilton Worldwide headquarters in the Park Place II building in Tysons is safe for now, but a developer is looking at demolishing and rebuilding the outdated Park Place I office building next door.
Developer B.F. Saul Co. submitted plans in August to redevelop 7926 Jones Branch Drive, an office building built in the 1970s, into a more modern office building. The proposed development plans show the building’s square footage of office space doubling from 260,000 square feet to 450,000 square feet. The new building is planned to be 18-stories tall.
The case entered the pre-staffing review phase on Dec. 12. Dates for hearings at the Planning Commission and Board of Supervisors are still to be determined.
The development is just south of the newly opened Jones Branch Connector and one half-mile from the McLean Metro Station. The application calls the existing building “functionally obsolete.”
The new development plans would rotate the property 90 degrees to face the Beltway and create visual symmetry with Park Place II.
The application plans say new amenities will be added at the ground level, like a small bike park. The park will act as a rest stop for passing cyclists with bicycle tools and parking available.
However, the developer is also requesting an exception for the parking requirement as the new development will exceed current parking limitations at the site. The application says the exception would be temporary pending redevelopment of Park Place II, but the application also says there are no immediate plans for Park Place II’s redevelopment.
Park Place II, which was built in 2008 and contains 311,600 square feet of office space, is currently the Hilton Worldwide headquarters. The application says the current leases for that building limit any redevelopment plans.
Photo via Google Maps
