Washington Business Journal
January 25, 2012
WBJ: CNA Lease Triggers Clarendon Project
By Daniel J. Sernovitz
CNA Corp., which includes the Center for Naval Analyses, has inked a deal to move its headquarters to Arlington's Clarendon neighborhood, where it will trigger the construction of a $150 million office-and-retail development by Penzance Cos. slated to start sometime in March.
CNA will lease nearly all of a 10-story building to be developed by Penzance at 3001 Washington Blvd. slated for completion in January 2014. The Arlington County Board voted Tuesday evening to approve the planned redevelopment, clearing the way for CNA’s building and an adjacent 8-story tower to be connected to the taller structure.
CNA CEO Robert Murray said the nonprofit chose Penzance’s project over about two dozen other sites in the Washington area, including space it looked at near the Washington Nationals stadium in D.C. The Institute for Public Research, another part of the CNA umbrella, will also be moving to the new site in Clarendon.
“We’re very much looking forward to going to Arlington, and they’ve been very welcoming to us,” Murray said. “Penzance was very thoughtful in the way they were approaching this. When we put it all together we had a lot of confidence in them.”
CNA will lease about 175,000 square feet in Penzance’s planned 200,000-square-foot building under a 15-year lease. That will leave just the top floor of the building for office space and the ground floor, which is slated to be retail space. An adjacent 8-story structure will have about 80,000 square feet and combined the buildings will have up to 28,000 square feet of retail space.
CNA began looking for space due to the traffic impacts of the Pentagon’s 2005 Base Realignment and Closure plan, which will shift thousands of workers to space by its current headquarters at 4825 Mark Center Drive. That lease for 161,000 square feet runs through 2015. Murray said the nonprofit needed space with access to D.C. and to the Pentagon. The new site in Clarendon will also be close to the Metro station, another key factor for CNA.
More than 600 workers will be moving to the new building, Murray said. As the Washington Business Journal first reported in September, CNA narrowed its search to the Penzance project and has been negotiating over lease terms with the developer.
Penzance has been working on developing the site in Clarendon for several years, and Managing Director Thomas Ikeler said the lease with CNA was the catalyst to move the project forward into its construction stage. He said he expects to close on financing for the development in a month or so.
“We would likely not be able to build the space without CNA,” Ikeler said.
But he noted the project was complicated to put together because it involved assembling six different sites and working closely with a number of community groups to ensure the buildings fit well into the neighborhood.
The development will feature a mix of building heights, starting from a one-story structure and moving up to 10 stories as the buildings move back from Washington Boulevard and 11th Street.
“We had to be very, very sensitive to building within a place like Clarendon, that has existing, recently built properties but also some historic properties,” he said.
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