The battle between developers of two of Washington’s biggest office projects is about to begin in earnest.
The JBG Cos. plan to begin building a 533,000-square-foot office tower atop the Rosslyn Metro station in the second quarter of 2012, according to Brian P. Coulter, a JBG managing partner.
JBG has been marketing the project to prospective office tenants for more than a year, and Coulter said the company has begun discussing financing with lenders. Called Central Place, the project is slated to include a 350-unit apartment tower, but Coulter said JBG plans to build the office tower first even though the company has not signed any office tenants. Both buildings are to top out at 390 feet, making them two of the highest structures in the Washington area.
“We’re out in the market talking to construction lenders and our current plan is to start the project” without any tenants, Coulter said. “At this point, although the project is phase-able, we are looking at starting the whole project next year.”
JBG is at work building a new public plaza and entrance to the Rosslyn Metro station that will have three high-speed Metro elevators.
If indeed it does begin construction on the Central Place offices without any lease commitments, Chevy Chase-based JBG would join a short list of developers that have either begun building or announced start dates for projects without any tenants. Among them are Lerner Enterprises, the Macerich Co. and Monday Properties, which began building the parking garage for 1812 N. Moore, a competing Rosslyn office tower, last October. Monday has not announced a deal for construction financing for the rest of the building.
Coulter said JBG was “not going to be blind to changes in market circumstances,” but that recent data about slow leasing did not necessarily portend a weak leasing market when the building is ready for occupancy. “It’s not what is the market like today, it’s what is the market like in two or three years,” he said.
Coulter also said the relative paucity of speculative office construction might suggest this is the right time to jump in: “Once we see everyone doing it, there’s a good chance it’s too late in the cycle, that’s our view at least.”