Acquired by PS Business Parks (PSB) in June 2018, Northern Virginia Industrial Park and Fullerton Road Industrial Park (collectively, NVIP) is located in Springfield, Virginia. Consistent with PSB’s acquisition strategy, NVIP is an expansive multi-customer portfolio and consists of 19 buildings totaling 1.1 million square feet situated on 65 acres of land. Additionally, NVIP, part of the Springfield/Newington industrial submarket, is strategically located near major commuting routes I-95, I-495, Route 1, and the Fairfax County Parkway.
A core premise behind the NVIP purchase was that the well located park historically underperformed and that our strong hands-on ownership would make a difference. At time of purchase, the portfolio’s occupancy was 76%. As of August 2020, occupancy is 93.6%, an increase of almost 18% or more than 200,000 square feet of absorption.
The strategy behind that successful lease-up was the creation of carefully designed spec suites. Given the size and condition of NVIP, this required a multi-team effort (leasing, property management, and construction) to implement targeted maintenance capital, design and create appropriately sized spec suites, deliver said suites, as well as re-introduce them to the market for lease up. This $7 million repositioning effort produced a more cohesive park image and 40 spec suites. These carefully designed spec suites, some with all new office pods, created a broader range of availabilities from 1,500 square feet to over 30,000 square feet. This strategic sizing allows for customer growth within the park and further diversifies our risk by creating an energetic multi-industry small-bay industrial park.
DC Metro: I-95 Submarket & NVIP Case Study Video
Equally important to our customer growth strategy is leveraging other nearby PSB-owned parks. With the NVIP purchase, we increased our submarket size to almost 2 million square feet, or a 12.6% concentration. This healthy market share allows us to exact economies of scale in our leasing, property management, and engineering teams. Customers at already owned parks now have significantly more options to grow as their businesses do the same. Being able to move to a different space mid-lease allows us to cater to all of our customers, but especially to those smaller, rapidly growing firms. This “cross-pollination” has already occurred, is good for our customers, and solidifies the rationale for owning multiple parks in a submarket.
PSB thrives with these types of acquisitions because we can draw upon the dozens of case studies throughout our national portfolio. Based on all of these experiences, we know that consistent strategy execution will yield success. This consistency allows our aggressive, hands-on, and onsite customer-centric leasing and management team to create a vibrant business park where customers can focus on their business while we focus on them.
For more information about NVIP and our presence in the Northern Virginia market, please visit the Northern Virginia Market page here.