Exxon Set to List Va. Campus It Will Vacate
Exxon Mobil is paving the way to market a massive Northern Virginia office campus that it plans to vacate.
The oil giant is talking to brokers with an eye toward listing the complex this year. The property encompasses an estimated 1.5 million square feet on a 118-acre site in the Fairfax County town of Merrifield.
Market pros expect the assignment to go to a full-service brokerage with leasing and construction expertise, because the campus is ripe for redevelopment. Assigning a value is difficult because there are a number of possible strategies for such a large property and few comparable assets have traded in the area recently. Nevertheless, some think bids could reach as high as $350 million, given the amount of land and its location.
One option is to redevelop the campus with residential and retail components. Another alternative is to continue to lease it as office space to one occupant or reposition it for use by multiple office tenants.
Asked to comment on a possible listing, an Exxon spokesperson said: “We are assessing the potential sale of this property.”
The campus, built in 1980 and later renovated, houses Exxon affiliates that handle refining and supply, lubricants and specialties, and research and engineering. In June, the company announced plans to vacate the property and relocate employees to its new campus in Houston. The relocation will begin next year and be completed by 2015.
Last year, rumors swirled that the federal government might buy the site and build a new headquarters for the FBI, which would relocate from downtown Washington. But Fairfax County officials voiced opposition, because the county would no longer be able to assess real estate taxes on the property.
Demand for office space in the area remains soft, partly because of a pullback by the government and its contractors. Office space in the Tysons Corner/Vienna markets, which includes Merrifield, was 86% occupied at yearend, down from 93% at yearend 2007, according to REIS. Effective rents have remained mostly flat over the past several years, averaging $26.82/sf at yearend.
Exxon’s property is bounded by the Capital Beltway, Gallows Road and Route 50. The site, mostly hidden by a large wooded area, is less than a mile south of Mosaic District, a new retail and entertainment development.