Matthew Ward is a senior vice president of a commercial real estate company in Skokie, Ill. But he knows Northern Virginia well, and he is poised to make a commitment that most local developers aren't quite ready to make -- for a large office building in the outer suburbs.
Ward's company, Alter Group, plans to start construction this fall on the first building of a new complex in western Prince William County. Although the company has not made a final decision to proceed, Ward said the company expects to build 550,000 square feet of offices over five years in several buildings on 47 acres at Interstate 66 and Balls Ford Road near Manassas National Battlefield Park.
The Alter Group hopes to begin construction in the fall on Stone Bridge Corporate Center, an office complex, on 47 acres in Prince William County.
(Courtesy The Alter Group)
Developers, brokers and economic development officials in the region say the project would be one of the first office complexes to be built on speculation -- without a major tenant signed up -- since the technology bust left buildings in Prince William and neighboring Loudoun County empty a few years ago.
Ward said his company "has witnessed some good cycles and some bad cycles in Northern Virginia." But in the past year, he said, the absorption of office space in Northern Virginia has shown that "the general health of the market is improving, and now where can a big tenant go and get space?"
"The answer is not many places," Ward said. "That gives us the confidence to kick off a new building."
Last year, 6 million square feet of space was absorbed in Northern Virginia, twice as much as the year before. And with fewer large blocks of space left in such closer-in suburbs as Tysons Corner, some real estate brokers and developers are beginning to share Ward's optimism about building in Loudoun and Prince William counties.
"People are seeing movement in the market, and they're looking for the time to get in," said Allen Tucker, a broker at the D.C.-based real estate firm Staubach Co. who represents tenants seeking space in Prince William and Loudoun. That area, Tucker said, is "the most cost-effective place to build."
The office vacancy rate in Prince William was 4.2 percent at the end of last year, compared with 9.3 percent at end of 2003. Rents average $22.01 per square foot, up from $18.39 a year ago.
One local developer who shares Ward's perspective is Robert Buchanan, a principal at Gaithersburg-based Buchanan Partners. He said his company plans to start construction this year on a 75,000-square-foot office building without a tenant at its Heritage Hunt project in Gainesville, in western Prince William.
"We've already developed retail and office condominiums there, and they've done well," Buchanan said. "We now think there's pent-up demand there for corporate office space.