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Walmart Labs has leased space at 2245 Monroe St., a freshly renovated Fairfax County office building.
Walmart Labs leases large block of space in Northern Virginia
Jul 1, 2020, 3:51pm EDT Updated: Jul 2, 2020, 12:13pm EDT
Walmart Labs plans to establish a new technology center in a freshly renovated office building near the Herndon Metro Station, according to two sources familiar with the deal, further bolstering the region's status as a tech hub.
The retail giant's technology arm has leased all of 2245 Monroe St., a roughly 162,300 square-foot building owned by an affiliate of Barings Real Estate, according to the sources, who were not authorized to comment on the lease. The lease is a big win for international investment firm Barings, which retained commercial real estate brokerage Transwestern to seek tenants as part of a major building repositioning kicked off about two years ago.
Renovations included an overhaul to the first floor with new lobby, tenant lounge, fitness center, cafe, game room and outdoor patio. As part of the repositioning, five floors above the lobby were returned to a clean shell condition.
Walmart Labs has a substantial and growing presence in the region. The company also occupies space at 10780 Parkridge Drive in Reston about five miles away along the Dulles Toll Road.
Representatives for Walmart Labs and the building's owner were not immediately available for comment.
The deal, which was inked in April, contributed to more than 513,300 square feet of positive absorption for Northern Virginia's office market, according to second-quarter stats from commercial real estate services firm CBRE (NYSE: CBRE). Microsoft's lease for nearly 400,000 square feet at Reston Town Center topped the list of largest leases, followed by the city of Alexandria's lease of the Institute for Defense Analyses soon-to-be former headquarters building at 4850 Mark Center Drive. The IDA is moving to new space at Potomac Yard and has been in talks with the city about a lease for some time.
That leasing activity lowered Northern Virginia's office vacancy rate to just under 18.9%, per CBRE, slightly improved from 19.3% in the second quarter of 2019. At the same time, net absorption is down from 1.6 million square feet recorded this time last year, which was aided at the time by large leases from Amazon.com Inc.'s second headquarters.
Meanwhile, tour volume is down across the board in Greater Washington, and CBRE cautioned of potentially "broad economic disruption" from Covid-19 that could impact demand for office space in the region.
Daniel J. Sernovitz
Senior Staff Reporter
Washington Business Journal