Marriott Plans New HQ in Hometown
- Oct 21, 2016
Bethesda, Md.—Marriott International Inc. isn’t afraid of commitment. Marriott, which became the world’s largest hotel company with the completion of the $13 billion Starwood merger in September, has chosen Bethesda, its hometown of six decades, for its new $600 million build-to-suit global corporate headquarters.
Marriott will spare no expense. Its new home base will encompass 700,000 square feet of leased office space with state-of-the-art technology and premier amenities, as well as a Marriott-branded hotel with at least 200 rooms. The campus will also provide another highly desirable feature. “Arne Sorenson, Marriott’s CEO, has stated publicly that he wants to see the headquarters move somewhere with a variety of transit options,” David Loeb, senior research analyst with financial services firm R.W. Baird & Co., told Commercial Property Executive, adding that the time is right for Marriott to get cracking on the project. “Given that Marriott is looking for a new-build headquarters building near the Bethesda metro station, they need to start planning that project now, as it could take five years or more to have a building designed, entitled and constructed,” he said.
Staying put in Bethesda, however, was not a foregone conclusion. Marriott—aided in the search by commercial real estate services firm JLL as its real estate advisor and global design firm Gensler as its workplace strategy partner—considered other metropolitan Washington, D.C., locales, including D.C. proper and two counties in Northern Virginia. It was something more than sentiment that sealed the deal with Maryland; state and local incentives had a little something to do with it. Maryland offered loans totaling $22 million, a sum that Montgomery County has agreed to match with an economic development grant, according to a Baltimore Sun article. Additionally, Marriott’s build-to-suit project paves the way for as much as $18 million in tax credits. And the County plans to further sweeten the deal with 1,200 parking spaces and a 10-year repayment schedule for the $40 million price tag attached to the added perk.
It’s a two-way street. “Our future headquarters will be a major investment in the local community, and we look forward to remaining a strong economic engine for Montgomery County and the entire region,” Sorenson said in a prepared statement.
Having zeroed in on downtown Bethesda, Marriott anticipates settling on one of the several sites currently under consideration in the first half of 2017. The company expects to relocate to its new campus in late 2022, in advance of the lease expiration at its current Bethesda corporate office at 10400 Fernwood Rd. And Marriott will likely fill every square-foot of its customized space in short order.
“The combination with Starwood could lead to more jobs at its Bethesda headquarters over time. Starwood’s incentive package with the State of Connecticut requires that the company maintain a certain number of jobs in the state for several more years,” Loeb noted. “The new headquarters opening might coincide with the move down to D.C. of a large number of people who are likely to stay in Connecticut (at Starwood’s former headquarters) for the next several years.”
Image courtesy of GE Lighting