A Solid Growth Strategy: Q&A With Pembroke’s Cory Saunders
It’s been a busy year for Cory Saunders, Pembroke Real Estate’s vice president and head of its Washington, D.C., office, as he’s overseen a major repositioning at the firm’s 1801 Pennsylvania Avenue, formerly known as the MCI Building, and changes to other buildings within the Boston-based company’s portfolio.
“With a global portfolio of 8.6 million square feet, and recent office developments and repositionings across six markets, Pembroke has leveraged its expertise in community management services, activation and programming to bring added benefits to D.C. tenants,” Saunders told Commercial Observer.
In November, Pembroke opened its reimagined 1801 Pennsylvania Avenue, complete with an elevated, boutique environment and amenities designed around the needs of the current workforce. A hospitality-inspired lobby with social lounge and coffee bar is available to tenants and guests for both social interaction and collaborative work.
CO spoke to Saunders about renovations within Pembroke’s portfolio, fundamentals in the D.C. market, and the importance of amenities ranging from rooftops to nap pods.
Commercial Observer: What is it about the D.C. office market that is attractive to Pembroke?
Cory Saunders: We identify markets that represent significant economic growth, technological expansion and intellectual capital. As the seat of the U.S. government, the defense sector and many of the world’s multilateral institutions and NGO’s, D.C. is a natural fit for our global portfolio. The market’s performance is historically less correlated to others in our portfolio, so it has the additional benefit of being a bit of a hedge against macroeconomic headwinds.
What was your goal with repositioning the former MCI building?
We wanted to transform the building for today’s modern workforce and future-proof [it] for many years of prospective ownership. We were fortunate to start with a compelling baseline — a fantastic Pennsylvania Avenue location, excellent views, above-standard building infrastructure (thanks to MCI’s focus on systems and redundancies), and open, 16,000-square-foot floors. We asked ourselves how we could position this building to effectively meet tenant needs. This led to a comprehensive renovation that would deliver a hospitality-led asset experience that includes a finely detailed new lobby and entry, best-in-class fitness center, expanded roof deck, and floor-to-ceiling glass with views that overlook Murrow Park. We‘ve leveraged our global experience and intricate knowledge of the D.C. market to introduce a fit-for-purpose product that we genuinely feel is unrivaled in the area.
Describe what the reimagined 1801 Pennsylvania Avenue offers to today’s office tenants.
First, a location that provides local amenities, proximity to key players in the market and views that extend all the way to National Harbor. Second, a tenant experience that truly does put people first with a lobby that invites you to stay for a cup of coffee, a fitness center that offers the respite of nap pods to counterbalance busy lives, and one of D.C.’s tallest rooftops that provides WiFi and shade. Finally, we have envisioned a light-filled office experience with elevators that open directly into the space, versus an elevator lobby.
The building boasts a number of state-of-the-art amenities. Why is that important in today’s competitive D.C. office landscape?
It’s a competitive market and employers are focused on recruiting and retaining leading talent. Tenants can create wonderful space within their leased premises, but we want to make sure our buildings offer complementary experiences within common areas to ensure the entire experience is elevated from the moment you enter the building. Generally, the theme of improved amenities is a consequence of a competitive market, but our focus on long-term investment and partnership with our tenants keeps us focused not on solely meeting the market, but leading it.
What’s happening at your 1201 New York Avenue, which also houses Pembroke’s DC offices? Might we expect some new lease announcements before the end of the year?
1201 New York Ave is also undergoing a complete transformation. We’ve already delivered a new dual-level lobby, fitness center, and 15,000-square-foot, indoor-outdoor roof deck and conference center at the building, a little over a year ago. We’re now focused on completing work to the exterior by mid-2020, including new entrances and floor-to-ceiling glass. Since we’ve delivered the first phase of work, we have commitments for nearly 90,000 square feet and are in discussions with prospective tenants for the remainder of the space. We’re excited to welcome Slipstream to the building in early 2020, who will provide an exciting coffee and cocktail offering in retail space that opens up into our new lobby. Their opening will really complete the vision for our 1201 entry and lobby experience.
How about at your other D.C. property — 1000-1010 Vermont Avenue? Anything new or noteworthy happening there?
Yes, these two adjacent buildings are leading properties in the Class B space in D.C. They allow us to serve smaller tenants in the market that require an excellent location and amenities at an accessible price point. We’ve recently renovated the lobbies of both buildings, installed a great conference center, opened a bike room (along with showers), and welcomed several new retailers, including Modern Market, Chipotle and Gregory’s Coffee.
What is the company’s strategy when it comes to D.C.?
We are long-term investors and take pride in the quality of our products and services, as well as the relationships we build with our tenants. Our strategy focuses on cultivating relationships, and delivering a market-leading experience from start to finish at our properties. We want to make our properties work for people, and know that making physical improvements must be complemented by a landlord that is working with its tenants in true partnership to accommodate the changing needs of their business.
Can you characterize the trends you’re seeing that impact your strategy?
I think the strategy of prioritizing relationships and service, providing high-quality experiences, and working in partnership with tenants is something only a long-term commitment can genuinely accomplish. And I think that strategy transcends trends.
What can you project about growth opportunities in the area?
We’ve invested significantly in the D.C. market, especially since we started our transformative renovations in 2017. Our current focus is on completing these renovations and leasing the remaining vacancy in our portfolio. Notwithstanding this, we are always in the market and considering opportunities to grow our portfolio here.
From your experience, how would you characterize the D.C. office market in a soon to be 2020 world?
It’s candidly the most challenging market in our global portfolio from the standpoint of the fundamentals — leasing demand is relatively muted and new supply remains elevated. I think that will continue in 2020. It’s our job at Pembroke to stand out from a crowded field with the product we deliver to market and our long-term commitment to our tenants.