Boston Properties, owner of Reston Town Center, held its Third Quarterly Earnings Call earlier this week where the current state and future of Boston Properties in Reston were discussed.
Chief Executive Officer Owen Thomas says Boston Properties (BXP) has performed well, despite the pandemic.
“Despite a challenging recessionary environment, BXP continued to perform well in the third quarter, demonstrating the durability of our business,” Thomas explained. “In the quarter, we collected 99% of our office rents and 97% of rents overall. We completed 811,000 square feet of leasing, 40% being either new requirements or expanding existing customers, and we increased our average net rental rates on our second-generation leases by 20%.”
BXP properties that have recently been sold was also discussed, including Patriots Park in Reston that was sold for $325 million, according to Thomas, or what equals out to $450 a square foot and a 5.6 cap rate.
“This 724,000 square-foot asset is fully leased and sold to an asset management company,” Thomas said. “BXP built and subsequently sold Patriots Park in 2014 at roughly the same valuation.”
President of BXP Douge Linde later chimed in to discuss leasing activity around the country. Northern Virginia is the second market that relaxed its restrictions since the start of the pandemic, following Massachusetts, according to Linde.
“In Northern Virginia companies are actually required just to social distance and there are no limits to the occupancy threshold, and employees drive to their office,” Linde said. “We estimate our census is well under 15%. At this time, the return to work is not about transportation constraints, and it’s not about elevator constraints either.”
BXP also finalized a few leases in Northern Virginia, according to Linde, including Microsoft in Reston Town Center.
“They leased an additional 45,000 square feet and extended the 2028 expiration on 164,000 square feet to 2033,” Linde said. “We’ve also completed another 96,000 square foot of leases, 8 transactions during the quarter there. We are in negotiation on 5 more leases, totaling 65,000 square feet, for vacant space in the Town Center.”
Restonians should expect to see Volkswagon in Reston as BXP recently signed a 20-year lease with the company.
The future of BXP in Reston was also discussed by Chief Financial Officer Mike LaBelle.
“We’ve already signed leases for this space in Reston, and we expect it to be occupied in 2021,” LaBelle explained. “We partially offset the impact of the occupancy decline with revenue growth from a full quarter of contribution from our 100% leased 1750 Presidents Way development in Reston that we delivered in the second quarter, and $2 million of growth in our parking revenues.”
Staff photo by Jay Westcott
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