When Boston Properties entered the Washington, D.C., real estate market in 1980, the area’s main drivers of vertical construction were government and any business that supported it. Forty years later, federal work remains an essential part of the mix, but an accelerating technology sector has sparked sustained building activity that has, at least so far, weathered the brunt of the pandemic’s economic upheaval and uncertainty.  

Indeed, during what many might consider a forgettable year, Boston Properties marked the topping out of a 28-story office tower that, with its 20-story companion structure, make up the first phase of RTC Next, a planned 4.4-million-sq-ft extension of the Reston Town Center in northern Virginia. Volkswagen Group of North America has committed to join Fannie Mae as prime tenants for RTC Next, which will also include a hotel and multifamily towers that could break ground later this year.

Across the Potomac River in Bethesda, Md., Boston Properties and The Bernstein Cos. have teamed up for Marriott’s new international headquarters, a Hensel Phelps-built project that will include 785,000 sq ft of office space and a 244-room hotel. In downtown Washington, work is well underway on the 11-story 2100 Penn Avenue, which will provide 470,000 sq ft of office and retail space when Balfour Beatty wraps up construction in 2022.

“We strive to develop and own the best properties in the best markets.”

—Pete Otteni, Senior Vice President, Boston Properties

Being in the right place at the right time—even amid a global health crisis—is nothing new to Boston Properties, which over the past half century has grown into the largest publicly held developer, owner and manager of Class A office properties in the U.S.

“We strive to develop and own the best properties in the best markets,” explains senior vice president of development Pete Otteni, who, with Jake Stroman, current senior vice president of leasing, will take the helm of Boston Properties’ Washington office in mid-May. “These are markets where educated, skilled workers want to locate, where there are social, cultural, educational, civic and other resources and amenities.”

Forging ahead while so many other projects were idled was certainly appreciated by the region’s construction community, but many factors contributed to Boston Properties’ selection as ENR MidAtlantic Owner of the Year.

In the emerging area of healthy buildings, for example, the company has aligned its emissions-reduction targets with climate science and last year completed the Science Based Targets Initiative approval process. LEED-certified properties now total 24.3 million sq ft, more than half of Boston Properties’ actively managed office portfolio, with all but a handful certified at the Gold and Platinum levels.

Otteni also points to last year’s Global Real Estate Sustainability Benchmark assessment, which awarded Boston Properties a five-star rating, with top marks in several categories specific to sustainable operations.

Rounding out the year’s honors were an ENERGY STAR Partner of the Year award from the U.S. Environmental Protection Agency, a Best in Building Health from the Center for Active Design and being the top-ranked office real estate investment trust in Newsweek magazine’s listing of America’s Most Responsible Companies.

A strong supporter of many Washington-area charitable organizations, Boston Properties brings its community engagement to the neighborhood level. As part of the 2100 Penn project, the firm led and personally financed the redevelopment of two long-neglected local parks. Although the improvements had been vetted with community leaders, and were well into construction, Boston Properties halted work to resolve residents’ concerns about how the plan was unfolding. Despite the redesign’s added cost and months-long approval process, Boston Properties willingly incorporated the revisions into the project. 

Closely connected

Being intimately involved in such specific project details is a hallmark of Boston Properties’ approach to construction, says Alex Palacios, Balfour Beatty vice president of operations.

Over his more than 20 years of involvement with Boston Properties, Palacios says, “I have experienced a collaborative owner that holds everyone accountable, but is fair and understands the challenges of construction. That so many of their leaders have been there for years says something about the organization’s continuity.”

Similarly, Boston Properties takes the same approach to its construction partners, preferring to work with a small group of GCs in its various markets. “We view them as partners, and we work toward shared successes on our projects,” Otteni says. “We seek to lead, and not just to manage.”

That leadership was crucial during the COVID-19 outbreak as contractors scrambled to adapt work processes to evolving safety protocols and to manage supply chain disruptions.

“They’re always out there on site, helping work through challenges, and this time was no different,” observes Clark Construction vice president Terry Simon. “They were with us every step of the way.”

Admitting that it’s too soon to make definitive predictions about post-pandemic living and working environments, Otteni expects changes to be marginal as opposed to transformative. Unit sizes in multifamily projects could see a modest increase, “with creative layouts that provide comfortable work areas so that one or more occupants can work from home on a regular basis.” Another new feature could be public amenity areas where residents can work “from home,” but enjoy some degree of interaction with others.

Otteni has few doubts that offices and downtown areas will regain their pre-pandemic attractiveness.

“Corporate culture has suffered in ways that aren’t fully understood yet, and CEOs are universally reporting that their teams miss the camaraderie and collaboration associated with in-person work,” he says. “People will return to cities for the same reasons they have always gathered there,” from cultural, social and civic engagement, to ready access to institutions such as government, universities and other corporate organizations.

And if there’s an area that encompasses those attributes, it’s metropolitan Washington.

“We’re excited about completing the development pipeline that we already have underway and continuing to focus on leasing any vacancy in our portfolio, both existing and in our new developments,” Otteni says. “We’re confident that technology customers will continue to drive demand in northern Virginia, where we have significant development capacity in our Reston portfolio, and we are aggressively seeking additional projects to fill the future development pipeline in the region.”

Boston Properties is also taking steps to boost its presence in other development sectors, creating a new division last year to focus on life sciences. Otteni says that while the firm has sector experience in many of its markets, including Washington, “the creation of this new division signals that it is a new and more specific focus for the company.” Montgomery County, Md., for example, boasts a strong life sciences submarket concentrated on the I-270 corridor, with many firms playing roles in the development of COVID-19 vaccines.

“Vacancy in lab assets remains extremely low, and rents are rising as a result,” Otteni says. “We’re excited about continuing to explore life sciences as a potential avenue for future growth in the region.”


Also in the area…

Boston Properties’ recent Washington, D.C.-area developments total more than 3 million sq ft, with 90% of the projects leased prior to completion. Major projects completed in 2020 include:

U.S. Transportation Security Administration Headquarters
Springfield, Va.

Boston Properties was tapped in 2017 to develop the $316-million, 625,000-sq-ft facility, with Lendlease as general contractor. Although the building was sold to USAA Real Estate during construction, Boston Properties stayed on as development manager through project completion.

Reston, Va.

Located adjacent to Reston Town Center, the 276,000-sq-ft, 17-floor building constructed by HITT Contracting is LEED Gold certified. A rooftop central plant system also controls multiple adjacent buildings.