BXP Nabs Second Major Pre-Lease at Downtown D.C. Office Redevelopment

Real estate investment trust BXP has landed another large pre-lease for one of its newly acquired redevelopment projects in Washington, D.C. — putting the property in a far better position compared to just a few months ago. 

Palo Alto-based firm Cooley inked a 20-year, 126,000-square-foot pre-lease for the landlord’s redevelopment at 725 12th Street NW — currently the site of a 12-story building in Downtown D.C. Cooley already operates an office in the District at 1299 Pennsylvania Avenue NW, just a few blocks south of its new location, though its overall footprint and potential relocation or consolidation plans were not immediately clear. 

Newmark’s Aaron Katz and Mike Schuler represented Cooley in the lease deal, while JLL’s Evan Behr represented BXP.

“Washington, D.C., remains central to navigating regulatory issues for our clients,” Rachel Proffitt, Cooley partner and CEO, said in a statement. “The firm’s continued presence in the capital city underscores our commitment to providing exceptional support in this critical hub of policy and governance.”

The property, having faced years of financial distress, is a relative bargain acquisition for BXP. The Boston-based REIT paid just $34 million to acquire the building late last year from a joint venture of Madison Marquette and Highland Square Holdings, which had paid $70 million for it in late 2023. The JV had at one point floated a plan to convert the property into residential units.

The building has a checkered history. Hines bought the building in 1993 for $61 million, and secured a $135 million refinancing loan from Allianz Life Insurance in 2015, per property records. Yet Hines struggled to repay its debt, particularly after the property’s anchor tenant, Williams & Connelly, ditched the office for 300,000 square feet at D.C.’s The Wharf in early 2022. Later that year, Hines handed the keys to the building to Allianz, which sold it to the Madison Marquette-Highland JV a year after that. 

The building, about three blocks east of the White House, was believed to be empty before BXP got its hands on it in December. The REIT has wasted little time — alongside its acquisition announcement in early January, BXP said that it had managed to sign a tenant to a 150,000-square-foot lease there with international law firm McDermott Will & Emery. 

After BXP redevelops the property into a 320,000-square-foot trophy building, McDermott Will & Emery will take the top five floors once it opens in late 2028.

“These firms prioritize workplaces that optimize client engagement and employee productivity and provide a platform for scalable growth,” said Jake Stroman, BXP’s executive vice president and co-head of its Washington, D.C., region.

Cooley and McDermott Will & Emery are not the only law firms to scoop up high-quality space in the District lately. Alabama-based Bradley Arant Boult Cummings just this week inked a 28,251-square-foot trophy sublease deal with fellow firm Dentons at 1900 K Street NW, a slight downsize from Bradley’s current 33,000-square-foot office at 1615 L Street NW. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.