Trinity Center, when it was acquired by Edgemoor affiliate, Clark Real Estate Advisors, was a 74 acre property located in a far-out suburb of Washington D.C. The property had been zoned by its prior owner to be a high density mixed-use suburban office park. All of the commercial components were planned with a density that required structured parking yet the leasing market at that time, and the foreseeable future, did not support the cost premium of structured parking. The rezoning by the prior owner also burdened the land with significant proffers that again significantly affected the total development costs and thus the need for above market rents. The County's approval of the rezoning came with a heavy price and the County was relying on both the proffer obligations tied to the land and the revenue to be derived from taxes related to real estate, business licenses and sales or revenue.
Edgemoor re-master planned the property and amended the entitlement plan to allow for an earlier introduction of commercial product to the market without losing the ultimate density the property was entitled for under the prior owner. The new master plan allowed for 75% utilization of the approved density but in a more cost effective manner by utilizing surface parking and more efficient office building design. The under-utilized density can be recaptured with the introduction of structured parking facilities. The burden of proffers was also lightened by eliminating requirements whose need had passed or been completed by others or by outright reductions of requirements. By re-master planning, Edgemoor was able to bring a competitive product to market and achieve market rates or better in its leasing efforts.
Trinity Center is located about 25 miles west of Washington D.C. and at the time it was being developed the suburban office park market had not reached Centerville Virginia but it was on a clear march in that direction along the I66 corridor as it was in other technology and commercial corridors in Northern Virginia. At the start of re-master planning the nearest office parks were located approximately 5 miles to the east along the I66 corridor or 8 miles to the north along the Route 28 corridor. Centreville had no established office market. Trinity Center was truly an island in the commercial real estate market in that it is situated between two defined sub-market areas used by the leasing brokerage community. To build in this location would be a pioneering effort with the outcome of speculative development being substantially risky.
Edgemoor evaluated the market to establish target rents that would be achievable given the rental rates being achieved in the closest office parks. It then used these values to set the development budgets and to guide the design of the commercial components to meet the budgets. Entering an undefined commercial submarket required Edgemoor to have strong arguments to support the projected revenues and to manage costs to attract equity and construction debt to the project. Edgemoor was so confident in its approach and evaluation of the market that it started the development with a very bold statement - two separate office buildings - one low rise and the other mid rise - were to be developed on a fully speculative basis. This created a large enough splash in the commercial real estate market to garner good attention and the initial two office buildings leased up on schedule and at rates in excess of those projected in the original pro forma. The lease-up velocity was sufficient to allow a third office building to be developed on a speculative basis before the first two builds were fully leased. The third build also leased up ahead of schedule and at rates above pro forma. Edgemoor was able to achieve these results through thoughtful and strategic marketing and public outreach and a concerted effort to get the leasing brokerage establishment to recognize the project as a part of the I66 corridor submarket where rents were typically hirer that the Route 28 submarket. In a short period of time Trinity Centre went from being a "pioneer" property to a market leader in the I66 and Route 28 submarkets by leading in lease up percentage and achieved rental rates.
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