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The art of the
deal
Virginia Business
June 2004
THE
DEAL: Booz Allen Hamilton Inc.’s expansion
into nearly a quarter million square feet of office
space at One Dulles Tower, located off the Dulles Toll
Road in Fairfax County.
KEY
PLAYERS: Dan Evans and Rob Johnson from the
Staubach Company in McLean, brokers for Booz Allen Hamilton;
Gary Lance, senior director of facilities and administrative
services for Booz, Allen, Hamilton; brokers Herb Mansinne
and Bob VeShancey with Jones Lang LaSalle in McLean
for Corporate Office Properties Trust of Columbia, Md.,
and the management team at Corporate Office Properties
Trust.
HOW
DEAL UNFOLDED: In 1991, Booz Allen Hamilton
brought about 300 jobs to the Tysons Corner area from
Maryland. Today, the company employs close to 7,000
people in Fairfax County, most of them in its five-building
headquarters campus at Tysons Corner. A major contractor
to the federal government in defense, IT and security-related
fields, Booz Allen’s work force has increased
at double-digit rates in recent years. As it outgrew
its Tysons campus, the company turned to longtime landlord
Corporate Office Properties Trust and the Fairfax County
Economic Development Authority to assist it in finding
more space. Booz Allen Hamilton’s culture has
developed around big teams that need easy accessibility
to one another, so the company was looking for 242,000
square feet under one roof in a location convenient
to highways and the airport, and where there were opportunities
for expansion Nearby One Dulles Tower, a 13-story office
building with more than 400,000 square feet, was a near-perfect
fit.
MAJOR HURDLE-NEGOTIATING WITH CURRENT LEASE HOLDER:
One Dulles Tower was partially occupied and leased entirely
to VeriSign Inc. Booz Allen Hamilton wanted the space
by the fall. To make the deal work “a tremendous
number of intricacies and nuances and complications,”
had to be smoothed out, says Cathy Ward, senior vice
president of asset management for Corporate Office Properties.
The good news was that VeriSign no longer needed so
much space and was open to a change. In fact, VeriSign
contributed to the buyout of its lease by Booz Allen
Hamilton, a move that will save the company money in
the long run, because it will no longer by paying for
space it doesn’t use. Booz Allen Hamilton agreed
to pay for the construction necessary to prepare the
space for its employees. It also agreed to start paying
rent the day VeriSign stops, so there would be no interruption
in the income stream. The deal happened, because both
the landlord and the tenants knew what they wanted,
and each was willing to make concessions.
ECONOMIC
SIGNIFICANCE: The 11-year-lease, based on comparable
buildings in the area, is valued in the neighborhood
of $50 million. More importantly, the deal expands the
presence of a top corporate citizen, one of Fairfax
County’s five largest employers. Booz Allen Hamilton
has the potential to fill the rest of One Dulles Tower,
and has leased an adjacent parcel for further expansion.
Over the next four years, the company plans to develop
a campus containing about 600,000 square feet at the
site. One Dulles Tower, at 13200 Woodland Park Drive
in Herndon, is owned by Corporate Office Properties.
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