Reston Town Center Is Booming: Boston Properties

RESTON, VA -- A Patch report earlier this month noted that a large number of retailers would be leaving Reston Town Center in 2018 based on comments by Boston Properties officials during a quarterly earnings call. But a top executive at BXP told Patch in a recent interview that having 200,000 square feet of space vacated is quite typical, and demand is actually strong at RTC.

That figure -- which represents "known move-outs at lease expiration where we expect vacancy in 2018," according to a BXP official on the call -- is only about 5 percent of the 3.6 million square feet of retail space at Reston Town Center. Currently, RTC is 97 percent occupied.

"We have expanding tenants within the center who will likely take up a portion of the space, but we will have some downtime that will impact our NOI [net operating income] growth in the portfolio," the official said on the call.

"It's actually quite typical," said Peter Johnston, Boston Properties executive vice president for the Washington, D.C. region, in an interview with Patch. "The prior three years, the rollover in RTC was 201,000 square feet, 188,000 square feet, and 236,000 square feet. While those numbers seem large, they only represent between 5 and 6 percent in square footage we own and manage."

Johnston also said there was a distinction between vacancy and rollover. While Boston Properties is currently look at around 200,000 square feet of vacant retail space in 2018, that's a maximum that could shrink as that space is filled throughout the year.

"We're constantly in the market doing deals," Johnston said. "Our business by its very nature, if you own buildings, in a given year certain space expires. You hope to fill the space again, and sometimes it takes longer to fill certain spaces than others. But in the Town Center, where it has a high occupancy rate, generally we fill those spaces."

While many merchants have voiced their displeasure about paid parking and said that business is down, there is no indication that retailers are leaving en masse or staying away from Reston Town Center, Johnston said. Sometimes, it's Boston Properties choice to not renew a tenant's lease, he added.

"Not every lease we execute with someone includes the right to renew their space," he said. "The popularity of restaurants come and go."

Many RTC retailers have been upset with Boston Properties due to the introduction of paid parking in January. While BXP scaled back paid parking hours in response to the outcry from merchants and residents alike, the merchants said they were still suffering in terms of sales due to paid parking keeping away customers. Aaron Gordon, owner of Red Velvet Cupcakery, told Patch earlier this year he believed he was being forced out by Boston Properties due to his outspoken opposition to paid parking.

Image: Patch staff