NRC to build Bethesda office tower
Tuesday, October 27, 2009
The Nuclear Regulatory Commission has signed a deal to construct a 14-story, 362,000-square-foot office tower across from its headquarters in Bethesda, a welcome project for local developers who have been grappling with plunging demand for commercial real estate space.
Bolstered by a stable federal government that is adding jobs, the Washington region has one of the lowest unemployment rates and the fourth lowest commercial-office vacancy rate in the nation. But with law firms, accounting firms, multinational corporations and other businesses in the area shedding jobs during the past 12 months, the region's vacancy rate has soared about 25 percent from 2008.
As a result, some developers have watched recently completed towers sit vacant and rents drop in occupied buildings, forcing them to postpone plans to construct new ones.
"This is clearly a shot in the arm to the commercial construction industry, which has the expectation there will be continued slowdown because of the credit crunch and vacancies," said Steve Silverman, director of the Montgomery County Department of Economic Development.
Like many federal agencies, the NRC is expanding. As part of the Obama administration's effort to reduce reliance on fossil fuels, the agency expects to see plans for about 25 new nuclear reactors and has hired hundreds of staff to review applications from proposed operators. The agency will lease the building from the developer, LCOR.
"We've hired 600 [full-time] engineers and some support people," NRC spokeswoman Beth Hayden said. "We've put the people in temporary locations in six buildings in Rockville and Bethesda. [With the new building] we'll all be right there together in one complex."
According to developers, the new $131 million building will be across the street from the existing NRC campus. It will be part of North Bethesda Center, a mixed-use property that currently contains apartments and is proposed to include a hotel and retail space. Construction is scheduled to begin in March and the tower will open in about two years, developers said.
"We're looking for tenants like other developers" during the slowdown, said R. William Hard, executive vice president and principal of LCOR. "We're thrilled to have NRC kick it off."
The federal government is planning to expand its labor force in the Washington area by a net of about 60,000 jobs, according to estimates from Delta Associates, an Alexandria-based research and real estate firm. This year, commercial market space that the government signed leases for increased to 8.4 million square feet from the typical 5.3 million, according to the General Services Administration.