JBG Smith to Close 3 ‘Obsolete’ Northern Virginia Office Properties
By Nick Trombola May 1, 2024 3:55 pm
reprints
JBG Smith Properties is in a spring cleaning mood, but with its portfolio of office buildings rather than household clutter.
The Bethesda, Md.-based real estate investment trust is moving forward with plans to close three office properties totaling 743,000 square feet in Northern Virginia’s National Landing, according to a letter written to shareholders by CEO Matt Kelly as part of the company’s first-quarter earnings report for this year.
JBG Smith plans to redevelop or repurpose 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive, all of which were built in the 1960s. The move will reduce the size of the REIT’s office footprint by 12 percent, per Kelly’s letter.
The Bell Street property went offline in the first quarter after former tenant Amazon (AMZN) moved into its new Metropolitan Park headquarters in Arlington, while 2100 Crystal will go offline in the second quarter following the expiration of Amazon’s lease there, according to Washington Business Journal. 2200 Crystal will move out of service once its tenants’ leases expire at an unspecified date.
The REIT filed plans in January to redevelop the Bell Street building into 308,000 square feet of new and improved office space with 4,000 square feet of retail space, per the Business Journal. Construction on all three sites is estimated to begin in 2026.
“Moving 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive out of service … should allow us to curate a healthier, long-term office market in National Landing over the next few years,” Kelly said in his letter. “We expect to repurpose these older, obsolete and under-leased buildings for redevelopment, conversion to multifamily, hospitality or another specialty use, ultimately reducing cannibalistic competitive supply in National Landing.”
National Landing encompasses parts of Pentagon City, Crystal City and Alexandria’s Potomac Yard neighborhood. JBG Smith has almost single-handedly redeveloped the area over the past several years, particularly since Amazon announced in 2018 that it would settle parts of its second headquarters there.
The district is or will soon be home to multifamily complexes, residential towers, restaurants and of course Amazon’s massive HQ2 campus, which officially opened last summer. Yet it will not house the recently scrapped campus for Monumental Sports and Entertainment, which opted earlier this year to keep its headquarters, and the Washington Wizards and Capitals sports franchises, in Downtown D.C.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
