Subject: [NEXTEL-1] Oct. 13 — Nextel Communications has done the unthinkable.

From: [email-masked]
Date: Sun, 12 Oct 2003 20:49:41 -0400

Nextel snatches ITT's trophy

By Suzanne White
Washington Business Journal

Oct. 13 — Nextel Communications has done the unthinkable.

Sources say the Reston-based telecom is close to signing a lease after bidding up
the price of a suburban office building that sits amid thousands of square feet of
available -- and cheap -- space. The real estate play effectively kills a
potential deal that a division of ITT Industries spent several weeks negotiating.
Nextel Communications plans to lease all of the nearly 200,000-square-foot One
Reston Crescent and is in talks with the building owner about future expansion
into a proposed 185,000-square-foot office nearby, sources say.

Why the sudden competition for an office in a market that has the highest vacancy
rates in the region?
The demand for space at One Reston Crescent summons aggressive real estate
competitions of the late '90s. But unlike then, a Northern Virginia office now
isn't hard to come by. Vacancy rates in the Reston/Herndon submarket consistently
have been higher than any other submarket in Northern Virginia, and construction
of new space has all but stopped cold.

There is, however, a quality issue that makes new buildings such as One Reston
Crescent worth fighting for, despite the depressed rents just down the road.

"When you get down to it," says Rob Faktorow at CB Richard Ellis, trophy space is
"very much [in] limited supply."

ITT to seek a new home

If One Reston Crescent's owner, Trizec Properties, and Nextel sign a lease the
space will be net new growth for the company, which already leases about 670,000
square feet in eight local buildings.
Nextel's (www.nextel.com) broker at Binswanger Advisor Services could not be
reached for comment.
The potential lease by Nextel puts the ITT group back into the market with a
100,000-square-foot requirement.

The group, called Advanced Engineering & Services, is in a 93,000-square-foot
office at 1761 Business Center Drive in Reston. Its lease there expires in May
2005, according to CoStar Group.
ITT's next best bet could be assembling space at Commerce Executive, a group of
buildings on Commerce Park Drive off the Dulles Toll Road owned by Charles E.
Smith Commercial Realty, or Dulles Tech Center, a Herndon campus of built and
proposed offices with some available space developed by Trammell Crow on Dulles
Technology Drive off of Sunrise Valley Drive.
An ITT (www.itt.com) spokeswoman also was not available for comment. Trizec's
brokers at Jones Lang LaSalle would not comment.

Smaller users take center stage

Meanwhile there still is a substantial amount of large plug-and-play space in
Reston/Herndon available for lease, says Susan Sonley, assistant vice president at
Grubb & Ellis.

"We haven't seen the velocity from the larger tenants pick up that substantially,
but we have seen a lot more velocity in the small to mid-size tenants," Sonley
says. "So as a result the small spaces are being gobbled up."

Rents in high-profile Reston buildings also have spiked. What went for $23 per
square foot eight to 10 months ago, has leased at about $30 per square foot in
recent weeks.

http://famulus.msnbc.com/famuluscom/bizjournal10-11-010757.asp?bizj=WAS#body

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