JBG Smith Properties to Begin Potomac Yard Development
- Jan 18, 2021
JBG Smith is about to begin demolition and infrastructure work on its approximately 67-acre mixed-use project in the Potomac Yard neighborhood of Alexandria, Va.
The massive development will be anchored by the $1 billion, 20-acre Virginia Tech Innovation Campus, adjacent to the planned Potomac Yard Metro Station. JBG Smith is the master developer on behalf of both Virginia Tech and JPMorgan for the innovation district.
It was just last month that JBG Smith and Virginia Tech received final approvals from the City of Alexandria for the first phase, which will encompass about 1.7 million square feet of space, including four office towers and two residential buildings with ground-floor retail.
The site is in northeastern Alexandria, Va., barely a mile from the south end of Reagan National Airport, on land that was previously a rail yard and industrial site.
Virginia Tech’s 11-story, 300,000-square foot educational and research building will house teaching, research, office and support spaces for graduate programs in computer science and computer engineering.
The building was designed by SmithGroup (no relation to JBG Smith) and will be able to capture sunlight and convert it to usable energy. It’s expected to achieve LEED recognition. Virginia Tech is scheduled to start construction next summer, with occupancy expected in 2024.
Ultimately, the plans for the surrounding district include a mix of multifamily units, office space and ground-floor retail, as well as more than 1.3 acres of planned public and private open space.
Amazon continues to deliver
The whole project is only a couple of miles from Amazon’s HQ2, for which JBG Smith is the exclusive developer.
Last September, an Amazon subsidiary purchased the Residence Inn by Marriott in the Pentagon City neighborhood of Arlington, Va. The deal completed the acquisition by Amazon and JBG Smith of all 11.6 acres for Amazon’s second headquarters campus.
Unsurprisingly, the pandemic has cut into the Northern Virginia office market, which sustained nearly 900,000 square feet of negative absorption in the fourth quarter, largely from subleased space going back onto the market, according to a new report from Newmark. Still, a total of 2.7 million square feet of new space was under way at year’s end—and 82.3 percent of that was preleased.
In the fourth quarter, the Crystal City/Pentagon City submarket had an average overall vacancy of 16.3 percent, on an inventory of 12.5 million square feet, again according to Newmark.