Renewals Dominate in DC’s Largest Office Leases of 2023
By Keith Loria December 28, 2023 2:41 pm
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It’s no news to anyone that 2023 was a down year for the Washington, D.C., office market, with vacancy rates reaching historic highs at more than 20 percent this summer before leveling off at around 18.7 percent by the end of the year.
The numbers are still lackluster headed into 2024, as building owners look for ways to bring tenants back for in-person work.
Many of the notable lease deals that were signed in 2023 were renewals, as federal tenants and law firms took advantage of declining rents and attractive amenities. Average asking rents in D.C. were at $54.73 per square foot at the end of the third quarter of 2023, a slight increase from the second quarter.
Here’s a look at the top 10 office leases of 2023 based on data provided by JLL, CBRE, Colliers and Savills and corroborated by news reports.
One lease not on the list, but large in itself, is Federal Emergency Management Agency’s (FEMA) lease at 301 Seventh Street SW, a 941,463-square-foot building owned by the General Services Administration. It’s unclear how much space FEMA is taking, but it’s believed to be more than 200,000 square feet, ranking among the year’s top deals.
1. SEC, 1.1M
The Securities and Exchange Commission checks in with the largest lease of 2023, with a 1.1 million-square-foot extension at 101 First Avenue NE, part of the three-building Station Place development owned by Property Group Partners.
The SEC signed a five-year lease to stay in the space it’s called home since 2021.
Plans were for the SEC to move to a new property in 2025 at 60 New York Avenue NE, which was to be developed by Douglas Development and Midtown Equities, but that project stalled due to reported financing issues, necessitating the renewal.
2. Federal Reserve Board, 210K
The Federal Reserve Board signed a 210,636-square-foot renewal this August to stay at 1801 K Street NW. The lease runs through at least 2033.
Somerset owns the 562,565-square building, having acquired it in 2006. A renovation of the building was completed in 2019.
3. Crowell & Moring, 199K
In the largest new lease of the year, international law firm Crowell & Moring inked a 15-year, 198,877-square-foot lease to anchor half of 600 Fifth Street NW, a $300 million redevelopment of the former headquarters of the Washington Metropolitan Area Transit Authority. The redevelopment is a joint venture between the Rockefeller Group and Stonebridge.
Designed by Pickard Chilton, the redevelopment will add three stories to the current property to make it an 11-story, 399,617-square-foot office building with ground-floor retail.
4. GSA’s Court Services and Offender Supervisory Agency, 151K
The General Services Administration’s (GSA) Court Services and Offender Supervisory Agency inked a 151,300-square-foot renewal at 633 Indiana Avenue NW to stay in the East End for another 15 years. It was the largest lease during the second quarter of 2023.
The agency has been in the building since 1998 when owner Zuckerman Gravely completed an $11 million renovation.
5. Hunton Andrews Kurth Legal Services, 115K
Hunton Andrews Kurth Legal Services extended its 115,000-square-foot lease at 2200 Pennsylvania Avenue NW to stay in the West End. The firm has been in the 10-story building since 2018.
The 459,000-square-foot building was developed by BXP in 2011.
6. Fried Frank, 101K
International law firm Fried Frank renewed its 101,000-square-foot lease at the 11-story Lafayette Tower this summer, and will remain in the space until at least 2037.
The 324,000-square-foot building, located at 801 17th Street NW, is owned by an affiliate of Morgan Stanley Real Estate Advisor. The property was delivered in 2010 and is currently in the midst of a renovation. Fried Frank has been in the building since it opened.
“The building is well designed, well located and well run,” Jon Mechanic, chairman of Fried Frank’s real estate department, told Commercial Observer earlier this year. “All of our people are very happy there.”
7. American Chemistry Council, 93K
The American Chemistry Council was a rare new lease that made the top 10, taking 93,000 square feet at 655 New York Avenue NW in a deal signed at the end of summer.
The association will take the top two floors of the 762,000-square-foot building, developed by Brookfield Properties and Douglas Development in 2019.
ACC will relocate in 2024 from Station Place III at 700 Second Street NE, where it has had 90,000 square feet since 2008.
8. Pillsbury Winthrop Shaw Pittman, 89K
Legal service company Pillsbury Winthrop Shaw Pittman extended its 89,027-square-foot lease at 1200 17th Street NW in March.
The law firm originally moved into the 169,000-square-foot building, which was developed by Akridge and Mitsui Fudosan America, in 2014.
“Pillsbury’s renewal is a testament to the enduring quality of the building,” Matt Klein, president and CEO of Akridge, said at the time of renewal. “It offers a beautiful design, efficient floor plates, and a great location. Further, MFA remains committed to continuing to improve the building to meet the current demands of Clients.”
9. Davis Polk & Wardwell, 82K
Global law firm Davis Polk & Wardwell doubled its footprint in the District this April, inking an 82,000-square-foot lease at the 11-story 1050 17th Street NW.
The 154,000-square-foot building was built by the Lenkin Company and sold to Hines this year for $59.81 million.
Davis Polk & Wardwell will leave its 41,636-square-foot space at 901 15th Street NW to take the top five floors and penthouse of the property in 2024.
10. GSA’s Secret Service, 79K
GSA’s Secret Service agency signed a 15-year renewal with Blake Real Estate to remain in its 79,000 square feet at 1100 L Street NW, which it has called home since 2008. The 318,492-square-foot property was recently renovated by Shalom Baranes Associates.
Keith Loria can be reached at Kloria@commercialobserver.com.
