Macerich’s big bet appears to have paid off.
The Santa Monica, Calif.-based company, whose specialties are malls and shopping centers, has owned Tysons Corner Center, one of the largest and most highly trafficked malls in the United States, for a long time.
With a Silver Line Metro station under construction near the mall, Macerich and its financial partner, the Alaska Permanent Fund, opted to aggressively begin developing property it owns next to the mall.
In July, it began construction on apartments, a hotel and the Tysons Tower office building. When completed in 2014, the more than $500 million project will likely be the largest mixed-use complex in Tysons Corner, comprising 1.4 million square feet.
Beginning construction was a bold move. Commercial leasing has been flat in the area thanks to government cutbacks and the prospect of more-drastic cuts in coming months. Not only was Macerich constructing an office building with no tenants and no bank financing, it was doing so across the street from a competing project by one of the region’s most experienced and accomplished developers of office buildings: Ted Lerner.
But Macerich appears to have landed a major anchor tenant for the project, as commercial satellite services provider Intelsat has tentatively agreed to relocate its U.S. headquarters from the District to the Macerich project, according to sources close to the deal. Macerich had been marketing the property to companies and organizations willing to pay in excess of $50 per square foot.
The sources spoke on the condition of anonymity because they were not authorized by Macerich or Intelsat to disclose the agreement.
Intelsat spokesman Alex Horwitz declined comment. Macerich’s Tim Steffan, senior vice president of property management, would not discuss whether Intelsat had made an initial commitment. “We have no deals on the table,” he said.
Intelsat is based in Luxembourg, but its American operations are currently headquartered at 3400 International Dr. NW, off of Connecticut Avenue NW in the District’s Van Ness neighborhood.
It owned the building until August, when it sold the property to New York-based 601 W Cos. for $85 million. It has been leasing the building while considering other locations and engaging local governments interested in facilitating a deal.
Intelsat has approximately 450 employees at its Connecticut Avenue building, according to Horwitz. It considered sites in D.C., Maryland and Virginia for relocation.
Carr Properties, which broke ground recently on a speculative office project on East West Highway in Bethesda, had worked with Montgomery County officials to try to lure Intelsat there, but Oliver Carr III, chief executive of Carr Properties, said last week that a deal had not materialized. “We don’t know for certain, but we think the are probably going to the Macerich project in Tysons,” Carr said.
The District government, under D.C. Mayor Vincent C. Gray (D), has been pushing to build its sector of technology companies and offered tax incentives to LivingSocial, the District-based daily deals company, aimed at encouraging the company to chart its future in the District. Gray’s economic development strategy for the next five years, which he released Nov. 14, suggests positioning the District as a “high-tech magnet.” The mayor has been adding economic development staff in an attempt to attract and retain more companies.
Despite Gray’s efforts, Intelsat’s move would couple it with other technology firms that began in the District but bolted to the suburbs when they matured. GridPoint, developer of energy management and smart grid services, was founded in the District in 2003 and even received subsidies from the District to spur expansion. But it relocated to Arlington four years ago, and now has employees in Virginia, Texas, Washington and Canada.