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Case Study

1100 First Street, 347,000 s.f.

1100 First Street, NE
Washington DC
347,000 s.f.

Government Investor Services (GIS) worked on behalf of Tishman Speyer to lease 1100 First Street, NE – a new building in the emerging NoMA submarket in Northeast DC.  GIS worked with the ownership to create a leasing strategy that would differentiate the building among the many projects delivering in the same submarket at the same time.  Moreover, while Tishman Speyer is a savvy owner/investor of privately leased assets it has little experience acquiring or managing government leases.  Therefore, a large part of GIS’ role in the initial phases of the assignment was to educate the ownership on the difference between private and public sector leasing. 1100 First Street, NE entered the market during a particularly active time in terms of federal demand. 

Given the volume of 100,000 s.f. + GSA leasing requirements along with the delivery of over 4 million square feet of new supply, the environment was particularly dynamic.  Furthermore, lack of momentum within the private sector market made capturing federal demand essential to the success of the project.  However, the price points of the lease comparables for large federal deals – both in NoMA and CEA wide – were so aggressive that 1100 First Street, NE was unable to compete for leases without imperiling the stability of the project.  Therefore, GIS recommended a recalibration of the federal leasing strategy which focused on capturing demand for smaller federal deals through the utilization of the Automated Advanced Acquisition Program (AAAP). 

Given the high volume of leasing in the NoMA market, 1100 First Street, NE sought to become an option for expansion from neighboring agencies.  By pursuing smaller deals (20,000 s.f. – 50,000 s.f.), 1100 First Street, NE could attract leases that were not beholden to the Congressional Prospectus Cap limitation applied to larger deals.  Moreover, GIS’ understanding of the potential for post-award rent increases available in select AAAP leases provided the ownership with a level of comfort necessary to offer a lower initial rate predicated on the understanding that the rate would immediately grow. The strategy crafted by GIS and Tishman at 1100 First Street, NE yielded four leases totaling almost 200,000 s.f. – over half of the building.  The rental rates associated with these leases are the highest in the submarket by a significant margin. 

The remaining space in the building was leased by a private sector tenant resulting in a fully occupied, stable asset for the client.  While many owners/investors were settling for rental rates that were well below market and competing for the same requirements, GIS’ ability to provide a unique and differentiating leasing strategy was the key to a successful outcome for the owner. 

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