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From The Ground Up

Sought-After Affordability in Silver Spring

By Dana Hedgpeth
Washington Post Staff Writer
Monday, February 28, 2005; Page E03

WorldSpace Corp., a 120-person company based in Northwest Washington, is on the hunt for office space.

Like a number of other companies considering alternatives to the District, the satellite radio company is considering Silver Spring. New shops and restaurants have helped create a resurgence that is finally making its office market a sought-after place, according to brokers, developers and tenants.

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Discovery Communications Inc. was the pioneer, building a big complex downtown that that was completed in 2003. Now, other office tenants are finding more affordable deals than they could in the District's prime office areas.

"Silver Spring used to be seen simply as the low-cost alternative to tenants in Montgomery County," said Roberta Levy Liss, a broker who specializes in the county for the real estate firm of Trammell Crow Co. "But now it's becoming an excellent option for D.C. tenants too. It's becoming equal to other markets in its strength to attract office tenants, and that's an evolution."

Frey Haileleoul, a spokeswoman for WorldSpace, which offers satellite radio overseas, said the company has been looking since last fall for about 50,000 square feet of office space in Silver Spring, Manassas or the Dulles area. The company's workers are now spread out on four floors in an office building in the 2400 block of N Street NW, and executives want to consolidate on one floor or two floors.

"What's attracting us to Silver Spring is that it's not as expensive as D.C., and it's not as far from the city as other places," Haileleoul said.

The insurance company Ullico Inc. last year moved part of its operations out of the District to 90,000 square feet in a building at 8403 Colesville Road in Silver Spring. And the American Nurses Association moved its headquarters last year to 62,500 square feet in a new building at the corner of Wayne and Georgia avenues.

The nurses group had its 200 employees in Southwest Washington since 1992, but it was looking for newer office space with the opportunity for partial ownership. For two years, the group looked at 26 properties in the metro Washington area before it decided on Silver Spring, said Linda J. Stierle, chief executive of the nurses group.

Moving from the District to Silver Spring saved the group about $18 a square foot, Stierle said. Rates in the building are about $31 a square foot, Stierle said. The group also has a small ownership interest in its new office building.

"This is really the best deal for us," Stierle said, referring to Silver Spring. "There's a savings to be realized, and you can actually upgrade your building." In the District, she said, "we were paying Class A prices for Class B space."

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