GSA Terminates 1.2M-SF Contract for New SEC Headquarters in D.C.
Valued at nearly $1.4B, the lease agreement was one of the largest federal contracts in recent history.
By Nick Trombola October 2, 2024 2:10 pm
reprints
Looks like the Securities and Exchange Commission isn’t relocating to Washington, D.C.’s NoMa neighborhood after all, or at least not anytime soon.
The General Services Administration, which oversees the federal government’s real estate footprint, has terminated a lease agreement for a planned 1.2 million-square-foot complex on a 6-acre parcel at 60 New York Avenue, according to Bisnow.
The GSA awarded the roughly $1.4 billion lease contract, one of the largest federal contracts in recent memory, in late 2021 to Cayre Jemal’s Nick LLC (CJN), a joint venture between Douglas Development and Midtown Equities.
As reasoning for the termination, the GSA cited the JV’s failure to procure financing to build the project, a GSA spokesperson told Commercial Observer in a statement.
“Despite multiple attempts by GSA to find a mutually beneficial solution since the spring of 2023, CJN has been unable to demonstrate its ability to finance construction of the building, as required by the lease, and the project has yet to proceed past the initial phase,” the spokesperson said.
A representative for Douglas Development did not immediately respond to a request for comment.
Construction on the project was planned to start in mid-2022, with an expected move-in by 2025. But by the following summer, the project had not yet started, with Bisnow reporting at the time that the developer had not secured the funding it needed for the project. A few months later, the SEC instead opted to sign a five-year lease extension at its current headquarters at 100 F Street NE, a complex dubbed Station Place, though reducing its footprint there by over 210,000 square feet.
The SEC’s lease extension apparently took some members of Congress by surprise. Congressman Steve Womack of Arkansas, former chairman of the House Financial Services and General Government Subcommittee on Appropriations, wrote an open letter at the time to SEC Chairman Gary Gensler demanding answers to the lease and contract situation.
“Unfortunately, recent media reports indicate that two of the SEC’s existing Washington, D.C., building leases have been extended because the development of its headquarters site is delayed. The lack of certainty surrounding the SEC’s federal footprint is astounding and deserves attention especially during times of increasing federal telework,” Womack wrote.
Shrinking the federal government’s real estate footprint has been the GSA’s MO lately. Moves to reduce the footprints of the U.S. Department of State and Department of Housing and Urban Development were announced in August, not long after the GSA announced plans to consolidate two U.S. Treasury agencies into one combined space.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
