Worldgate Metro Plaza, Herndon, VA

Case Study

Challenge:

  • 50% leased with an average lease term of four (4) years
  • Two tenants with lease expirations in 2018; two of the four buildings may go vacant
  • Rent levels below market value for comparable Class A assets in the submarket
  • No walkable amenities
  • Mid-teens market vacancy rate; demand for high-quality, amenity-rich properties

Strategy:

  • Market as a repositioning effort with the addition of amenities and upgrades
  • Promote Metro accessibilty with opening of Herndon Metro Station stop in 2020
  • Outline a detailed capital / renovation budget in the offering memorandum
    • $6.5 million in possible improvements
    • Renovations would include lobbies, conference center / tenant lounge, fitness center, outdoor plaza, signage, landscaping and restroom upgrades
  • Highlight the project's inherent attributes
    • Finished floor-to-ceiling height: 9'
    • Nearly column-free floor plate
    • 4.0/1,000 parking ratio
    • High visibility on Dulles Toll Road
  • Promote higher rent levels (from high $20's / low $30's PSF to mid $30's PSF) through repositioning efforts

PROSPECT RESPONSE

Email Recipients 6,533
CA’s Received 114
Tours 31
Bids Received 16

PROSPECTS BY TYPE

Institutional 38
REIT 2
Private 75
Offshore 2

Bidders:

American Real Estate Partners Harbert Management Corporation (Moore & Associates)
Banyan Street Capital Interra Capital Group
DSC Partners LLC (Fortress) Morning Calm Management
Exeter Property Group Penzance (Kresge)/td>
Federal Capital Partners Rubenstein Partners
Foulger-Pratt (Cerberus) Stream Realty Acquisition
Garrison Investment Trinity Capital Advisors, LLC (PCCP)
Griffith Properties