Lowe to Begin $70M Redevelopment of 13-Story Office Building in D.C. Suburb

Four years after acquiring the property formerly known as 1411 Jefferson Davis Highway in Crystal City, Va., Lowe Enterprises has kicked off a $70 million redevelopment of the building in an endeavor that will become the 308,000-square-foot 1400 Crystal Drive.

By Barbra Murray, Contributing Editor

A new office project is coming to market in an increasingly tight suburb of Washington, D.C.  Four years after acquiring the property formerly known as 1411 Jefferson Davis Highway in Crystal City, Va., Lowe Enterprises has kicked off a $70 million redevelopment of the building in an endeavor that will become the 308,000-square-foot 1400 Crystal Dr.

Office development is not exactly booming anywhere in the country, but in some pockets, the need for new space exists, and companies like Lowe are responding to the call. Crystal City, located less than five miles across the Potomac River from Washington, D.C., is one such pocket. “Crystal City really does not have any true Class A in the heart of the market,” Harmar Thompson, senior vice president with Lowe, told Commercial Property Executive. “We get questions from tenants all the time who say they’d like to be in Class A space that’s close to the Metro in Crystal City, but it doesn’t exist.”

And the project will deliver that Class A space at a location within two blocks of a Metro station and less than one block from the Virginia Railway Express — all contained in 13 stories of state-of-the-art accommodations. What had been a Class B office facility that was fully occupied by the National Guard Bureau will be transformed into a gem with the assistance of Fox Architects. Lowe brought Whiting-Turner Contracting Co. onboard to spearhead the redevelopment, a project that was ahead of the game from day one. “When we looked at the building in 2008, we knew that even though it was built in the late ’60s, its existing structure, or the bones of the building, was good,” Thompson noted.  Those bones will allow 1400 Crystal to provide another feature that is hard to find in Crystal City – efficiently designed space. Instead of the 20×20 column spacing most commonly found in the area, the new office project will feature the 30×30 column spacing from the original structure, thereby allowing for more efficient floor planning.

Maintaining the existing structure also paved the way for yet another feature that tenants are demanding more and more these days. By reusing the concrete frame, the company is earning points toward the achievement of LEED Gold certification by the U.S. Green Building Council. Additionally, the advanced HVAC system that will be installed will take the building yet another step closer to the coveted green stamp of approval.

Looking at the numbers, it is not immediately clear that there is a cry for office space in Crystal City. The submarket currently has a vacancy rate of 17.7 percent, according to a new report by commercial real estate services firm Cassidy Turley. Numbers can be deceiving. It is the Class B segment of the market–which has taken a hit with the exit of occupants due to the federal government’s Base Realignment and Closure activities — that is largely responsible for Crystal City’s relatively high vacancy rate. According to Thompson, BRAC has resulted in 90 to 95 percent of Class B and C space coming back on the market. But it’s not the Class B and C accommodations that are attracting users; Class A is driving the market. “There’s real demand to be close to D.C., with access to all the transportation and amenities,” he said.  “If you go any distance from the Metro, most of that market was built out in the ’60s, ’70s and ’80s and there really have been no new buildings in that area for long time. So the demand is there.”

Lowe expects to wrap up development of 1400 Crystal in about one year and the company believes the completion will be timed just right for the market. “I think we’re going to be the only new building to deliver in that 2013 timeframe, so we think that there’s going to be a limited amount of supply in the time period in which we are delivering.”