The Advisory Board Company, a D.C. consulting firm mulling a headquarters move, is a low-profile economic prize.
But as the Advisory Board nears a decision about where to move its headquarters from two current locations in the West End, it has become the subject of aggressive pitches from developers hoping the company will anchor their projects and elected leaders including D.C. Mayor Muriel E. Bowser (D) and Virginia Gov. Terry McAuliffe (D).
A $2.4 billion business, the Advisory Board specializes in providing technology, research and consulting services primarily to health care and higher education clients, with a dozen offices on three continents.
In 1997, it spun off its corporate advisory business into a new company, CEB (formerly Corporate Executive Board). Both companies are now publicly traded.
A year ago Advisory Board executives announced that they were evaluating whether to leave their headquarters office space, specifically about 300,000 square feet of space it leases at 2445 M Street and 1227 25th Street NW, with expiration dates in 2017 and 2019.
“It has been clear to us over the years that our work space has a huge impact on recruiting and retention of our talented staff and that it is a powerful way of communicating our brand externally,” said Robert Musslewhite, chairman and chief executive, in a June 2014 statement.
“Certainly our space is among our most important investments in our future – creating the right space inspires our employees to provide even greater value to our hospital, health system, and university members, and it is a visible and tangible way to attract top talent and extend our culture.”
A year later the company has narrowed its options to a handful of locations as large as 500,000 square feet and is expected to make a decision later this year, according to two sources closely familiar with the company’s search.
There is higher than average office vacancy rates throughout the Washington region and filling 1812 North Moore is a top priority for Arlington County economic development officials, who are battling high vacancy rates in Rosslyn, Ballston and Crystal City.
The developer of the project, Monday Properties, has targeted the Advisory Board as a tenant for more than a year.
Arlington County officials and Timothy Helmig, president and chief operating officer at Monday, declined to comment. McAuliffe, in an interview Wednesday, declined to comment on the matter because it was the subject of confidential negotiations.
But Virginia’s effort to lure the Advisory Board across the Potomac may run into a roadblock.
Last summer CEB agreed to move its own headquarters to a separate Rosslyn building, Central Place, that is now under construction. CEB will lease 350,000 square feet with the assistance of $9.5 million in incentives from the state and $4.5 million from Arlington County.
The two locations are nearly next door to one another, which complicates Virginia’s efforts. Some of the soaring views of the Potomac that the Advisory Board would enjoy from the existing building today will be obstructed by the CEB headquarters building once it is completed.
A spokesman for Musslewhite, the chief executive of the Advisory Board, declined to comment, saying the company was “in a complicated process.” But what CEO wants his views blocked by one of his former business units?
Though D.C. does not have such a mammoth building sitting empty, the stakes are high for Bowser in retaining the company, especially since the firm is considering a number of opportunities that would lead to newly constructed buildings in the burgeoning east end of downtown.
According to one source, who spoke on the condition of anonymity because the discussions are subject to confidentiality agreements, two leading contenders in D.C. are development sites controlled respectively by longtime local developers Guy Steuart II and Douglas Jemal.
Steuart’s family has owned land in the Mount Vernon Square area for more than a century, and he has teamed with Boston Properties, one of the leading developers on the East Coast, on plans for a new building at 501 K Street NW. The site is currently a parking lot.
Similarly Jemal, working with his son Norman, plans a new office building nearby at 655 New York Avenue. Executives at Steuart, Douglas Development and Boston Properties all did not return calls seeking comment.
A spokesman for Bowser, Joaquin McPeek, declined to discuss specifics of the mayor’s overtures to the Advisory Board but issued a statement saying the administration “has activated its business development team to work closely with existing and potential employers to make it clear to them why the District is the best place in the country to locate their business.”
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz