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Navy Federal Credit Union sees huge real estate growth

Monday - 6/30/2014, 12:01pm  ET

Navy Federal Credit Union is growing its footprint, in Virginia and Florida.

The world's largest credit union recently paid $11.5 million for two buildings next to its Vienna headquarters and is still developing expansion plans, a spokesman said. Navy Federal also has announced ambitious long-term plans to expand its presence in Pensacola, Florida, promising hundreds of millions of dollars of investment and thousands of jobs.

In May the credit union held its monthly board meeting at the central Gulf Coast military and resort town. Cutler Dawson, the credit union's president and CEO, was asked about moving the headquarters from Vienna to Pensacola, where there's a big Navy presence. According to a local news report, Dawson said the workforce and community support in Northwest Florida are important to the credit union's growth and success.

“If you guys keep charming us ... who knows what’s going to happen in the future," he said.

Navy Federal has more than $54 billion in assets and has topped 5 million members. It operates branches nationwide and overseas and has been growing in Pensacola, where it employs 2,800 people on a 68-acre campus, for years. The credit union has announced plans to develop a $1 billion campus for 10,000 employees by 2020.

But Navy Federal doesn't seem ready to abandon Northern Virginia, where it employs about 3,000 workers.

During his remarks in Pensacola, Dawson also said that remaining close to the Pentagon is critical to Navy Federal. In April, the credit union paid $8.4 million for the three-story office at 1041 Electric Ave. and $3.1 million for a smaller three-story office at 1021 Electric Ave., both across the street from its headquarters at 820 Follin Lane in Vienna.

Navy acquired the neighboring building at 1007 Electric Ave. for $1.85 million in 1992 as an annex to the 11-acre main campus. Navy Federal now owns more than 1 million square feet of gross floor space in the area.

Credit unions are nonprofit operations that enjoy tax-exempt status, a thorn in the side of the commercial banking industry. Real estate, however, is not exempt. Navy's main campus has an assessed value of more than $107 million, according to Fairfax County property records.

I've reached out to Navy Federal for more detail and clarification about its long-term plans.

© 2014 American City Business Journals, Inc.