Harrison Street, Meridian buy Chantilly offices for secure-facility push

Meridian Group and Harrison Street Asset Management, joined by HLM Associates, have acquired a five-building office portfolio in Chantilly, Va., aimed at the national security, defense and intelligence tenant pool. The Stoneleigh and Newbrook campuses in Fairfax County's Westfields submarket total 431,000 square feet across 4800 and 4840 Westfields Boulevard and 14150, 14151 and 14155 Newbrook Drive; an affiliate of the RMR Group was the seller, records show.

Pricing was not disclosed, but Bisnow, citing a source familiar with the deal, reported the sale at approximately $67 million, which works out to $155 per square foot. At that figure, the buyers are paying for the raw material of a mission-critical facility rather than an income-producing office asset in the usual sense, and the joint venture says it will put additional capital into the portfolio to expand secure-facility capabilities and modernize infrastructure.

Gary Block, Meridian's chief investment officer, called the acquisition the first for the firm's secure, mission-critical facilities platform. "Our goal is to become a landlord of choice for both traditional government contractors and the growing universe of nontraditional defense and technology companies," Block said. Harrison Street, which manages about $109 billion in assets, said the strategy targets specialized properties benefiting from government-related demand and high barriers to entry, while HLM brings experience developing and operating facilities supporting classified government operations — a niche with its own tenants, build standards and underwriting. For Harrison Street, the $67 million outlay is small against a $109 billion book, a sign that the interest here is platform-building, not asset accumulation.

The Chantilly trade lands in the clearing-price column for office: a suburban portfolio bought at a basis that leaves room for redevelopment and a specific use. At approximately $155 per square foot, the price is low enough to absorb the security and infrastructure spending the buyers plan. Harrison Street has made clear it is comfortable rotating across specialized property types; the same week, Harrison Street sold a Dublin student housing asset to Commerz Real. The bet will be judged on whether Westfields defense and technology tenants materialize in the next leasing round, rather than on the announcement, and the trade also hands appraisers a fresh $155-per-square-foot comp in Westfields, where office values are still being discovered.