It seems that even a cyberspace-only financial empire still needs office space in the real world.
Online broker E-Trade Group Inc. of California and online bank Telebanc Financial Corp. of Arlington last week announced that they plan to merge. The firms also said they would like to set up a new 400,000-square-foot corporate campus in the Washington area. What are the companies looking for, and what are they likely to find?
"It's early, early days right now," E-Trade spokeswoman Lisa Nash said. The company has not even begun to look at specific sites, she said, but has a good idea what it wants.
The new Northern Virginia location would be modeled on E-Trade's three existing technology and service centers -- two in California and one in Georgia. The fast-growing company already knew it needed a fourth center and Texas was the front-runner. "But with the advent of the Telebanc merger, it made perfect sense to locate the fourth center in Northern Virginia," Nash said.
The company's existing centers are sprawling places with cubicles for customer service representatives and plenty of space for computers. The Washington-area center would be similar. The 400,000 square feet the company says it is looking for would be spacious enough to accommodate 1,600 workers in a traditional office-only set-up, but E-Trade plans to put just 400 or so people there. The rest of the room is for computer equipment, Nash said. The company favors a campus feel. "It's not at all a tall office building," she said, adding, "We would always want to find a space where we could expand."
Northern Virginia, with its acres of office parks and concentration of Internet businesses, is the obvious choice for such a building. But Telebanc founder Mitchell H. Caplan said the firm would at least consider locations in Maryland and the District.
Telebanc's 150 employees are housed in an three-story building at 1111 N. Highland St. near the Clarendon Metro station. Until recently, Caplan said, his firm rented about 20,000 square feet there, but because of its growth it recently bought the building. That gave it access to about 40,000 square feet more of space, plus development rights to expand. "Even including those building rights, it would not be big enough" to hold the combined E-Trade/Telebanc operation, Caplan said.
"Arlington has been terrific for our needs," Caplan said. "Our issue is what we can find . . . in terms of our optimal space." The top priorities, he said, will be "a campus-like environment" and "simultaneously making sure it's accessible for employees."
Adam Wasserman, director of economic development for Arlington County, said his office has been in touch with Telebanc before and since the merger announcement and will try to keep the company. Arlington, with its dense development, is different from the standard far-suburban office campus, he admitted, but said, "The urban campus is integral to what we would like to accomplish."
Local land and building owners are already jockeying to get attention for their sites. "We're all chasing it," said broker John McEvilly of Millennium Realty Advisors, who is representing owners of land in both Westfields and at Janelia Farm in Loudoun. "That's a biggie."
Northern Virginia is in the midst of an office building boom. There are currently 64 buildings under construction, with a total of 9.2 million square feet of space, according to Kurt Stout, a researcher at Grubb & Ellis. Of that space, 4.9 million square feet is available. There are also numerous sites available for new construction, although that number is shrinking.
"If there were ever a year you would want to go out on the market and find a vacant or available new building, this would be the best year to do it since 1991, but you'll pay almost exactly twice the rent you would have in 1991," Stout said.
If E-Trade and Telebanc want to build from scratch, there are sites available in a number of locations, broker Chip Ryan of Insignia/ESG said. In Arlington, land is scarce, with only Clarendon as a possibility, he said. In Fairfax County, there are prime sites in the Fairview Park, Fair Oaks and Westfields office parks, as well as a small number in Tysons Corner or Reston. Further out in Loudoun County, there is a plethora of possibilities.
CACI to Rent at Westfields
CACI International Inc. will rent a 135,000-square-foot building that Tishman Speyer Properties recently completed in the Westfields office park in Chantilly.
The building, Meadow Point at 14151 Park Meadow Dr., will house 500 workers, mostly from CACI's Information Systems division, which specializes in Internet-related software.
The building is just down the block from another Westfields building CACI recently leased for a telecommunications-related division. "There is great strength in combining the capabilities of the two business groups," said Brice Zimmerman, executive vice president of the information systems division.
He said some of the employees in the new building will move from other CACI offices around Northern Virginia, but some will be new hires. In the tech-rich Westfields location, he said, "our expectation is we will find rich recruiting opportunities."
ADI Technology Corp., Anadac Inc. and TWD & Associates signed leases totaling 80,855 square feet in a 282,000-square-foot office building that Potomac Investment properties Inc. plans to build at 300 M St. SE, near the Washington Navy Yard. . . . The law firm of Cadwalader, Wickersham & Taft has signed a lease for 33,997 square feet in a building that CarrAmerica Realty Corp. is constructing at 1201 F St. NW. . . . Bank Cos., a Washington brokerage, has joined Oncor International, a national brokerage network that has been without a local presence since its affiliate Smithy Braedon was acquired by Grubb & Ellis last year.