Lerner Enterprises has no lender, no equity partner and no tenants lined up for 1775 Tysons Blvd., an office building the developer is planning for land adjacent to the Tysons Galleria mall.
Which, in the Lerner mindset, means it’s time to build.
The family company founded in 1952 has begun construction on the 18-story, 476,000-square-foot building designed for platinum classification under the LEED environmental rating system. The building will be ready for occupancy in 2014.
The Lerners have never been afraid to invest when others were skittish, and are looking to take advantage of the arrival of Metro despite previously feuding with Fairfax County over land needed for the new tracks. The Lerners aren’t the only ones starting a speculative Tysons building, and with the government pulling back on leasing, finding occupants for the building may not be easy. That job falls to the Lerners’ longtime leasing partner, Brian F. Tucker, of the real estate services firm Cushman & Wakefield.
Why build a speculative office building in Tysons right now?
“Ted Lerner has started nearly every one of those buildings [in Tysons II] in a down cycle. I would say, ‘Ted, I honestly can’t endorse this moment as the time to put the shovel in the ground.’ And he would look at me and say, ‘Brian, you’re going to learn something today.’ And 30 months later we would come out of the ground ahead of the competition.”
Is that what Ted said this time?
“He said, ‘I want to be the first out of the ground.’ First in is ahead of the game, so we’re in a situation here where the reasons to are obvious: There has not been a trophy product hitting the market in over two years, really three years. The last one was the Towers Crescent-Quadrangle building, with MicroStrategy as the lead tenant . . . so really if you were to, say, look from today to 30 months from today, there’s nothing coming on line except for us.”
[On how leasing in Tysons has resembled musical chairs]
“The way we used to think about it [in Tysons] was, who can we steal? Who can we steal and get out of their seat and get them to move to our building? Well, we’re not playing that game anymore. Tysons is becoming a regional hub and with Metro coming we can market to people around the region, people who are overcrowded in the Rosslyn-Ballston corridor. That’s white hot and we know if people will go another couple quick stops, and that translates to about 12 extra minutes, we will have a trophy, platinum LEED-certified building there ready for tenants and will be actively leasing.”
What sort of tenants are you seeing interest from?
“We’re in discussions with an agency . . . that’s attracted to the quality of the project. Historically our buildings have been attractive to the professional services firms, law firms, accounting firms and the like . . . we have most of the major firms that are in the suburbs here. We tend to attract that type of firm. Now we are talking to professional services firms who are not in Tysons, too, and they are interested because (a) the Metro, (b) it has phenomenal exposure to the Beltway from an identity standpoint and (c) these types of companies are gravitating toward buildings that are LEED platinum buildings.”
Are you competing really with Rosslyn-Ballston landlords for tenants or with the District and Reston also?
“I don’t think it’s going to be too many from D.C. I think that’s sort of a dream — I don’t think it’s going to happen. I think it’s going to be people who are analyzing different Metro locations, but who also want to have cars, because in Tysons you can have both. . . . I think it’s going to be very interesting to see what we can attract in [terms of] out of the box, outside of the normal humdrum of Tysons tenants.”