Communications Satellite Corp., one of the Washington area's largest companies, has tentatively agreed to move its headquarters from the District to Bethesda, where it would lease custom-built offices in addition to some of Bethesda's more than 1 million square feet of existing vacant space.
The agreement is conditioned on developer Washington Properties Inc.'s ability to finance the new construction at a time when the Washington area is suffering from a real estate glut and real estate lenders have tightened credit.
"I don't take that as a given at all," said Richard L. McGraw, Comsat vice president for corporate affairs, emphasizing that the deal has a long way to go.
Comsat, which is based at L'Enfant Plaza in Southwest Washington and has other offices in Clarksburg in Montgomery County, has been looking for a new headquarters for about a year and a half. McGraw said the rent at L'Enfant Plaza is expensive, the company is outgrowing its space there and the 25-mile commute between Clarksburg and the city is inconvenient for Comsat officials.
The search led Comsat to Rock Spring Plaza, a development near Marriott Corp.'s headquarters. The company and the developer have been negotiating leases on about 50,000 square feet in an existing building at 6550 Rock Spring Dr. and an entire 170,000 square foot building that would be built for Comsat. The only agreement that has been signed relates to the custom-built building.
McGraw said Comsat does not need a specially designed facility, but it found no existing building that appealed to it more after searching near the Beltway from Tysons Corner to east of Interstate 270. The Bethesda site's main advantage was its location, about halfway between Washington and Clarksburg, he said.
The proposed lease is another sign that big businesses looking for office space may not find what they want in existing buildings. Despite the tens of millions of square feet of vacant office space in the Washington area, companies like E-Systems, a defense contractor, have been signing contracts for custom-built offices that suit their special needs.
If Washington Properties can finance the project, Comsat would move all employees now working at L'Enfant Plaza and some of the employees working in Clarksburg, McGraw said. He declined to say how many total employess would be involved in any move, which wouldn't occur for at least two years.
Credit has all but dried up for speculative new construction, but Comsat's commitment to occupy the building could give Washington Properties the edge it needs to finance the development.
Comsat's move would follow other major relocations from the District to the suburbs. Among others, American Telephone & Telegraph Co. has leased offices in Silver Spring, and the American Red Cross has announced that it will move from downtown to Fairfax County.
The move could cost the District in terms of taxes and image. Comsat employs about people nationally and is the 23rd-largest public company in the Washington area, based on revenue of $411.5 million last year. Comsat's main business has been channeling voice, data and video communications through satellites. An expanding video entertainment division provides pay television for hotels.
Executives at Washington Properties could not be reached for comment about the leases.