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Could McCormick & Co. spice up D.C.'s office market?

Wednesday - 6/4/2014, 3:48pm  ET

Suburban Baltimore-based spice giant McCormick & Co. is sure to attract plenty of attention from D.C.-area landlords as it weighs a potential relocation from its longtime headquarters in Maryland, though it's too soon to say whether that will be enough to bring the maker of Old Bay Seasoning near the Capital Beltway.

My colleague at the Baltimore Business Journal, Kevin Litten, reported Wednesday that McCormick is looking for between 300,000 and 350,000 square feet and has cast a fairly wide net that extends into Northern Virginia and suburban Maryland but also includes southern Pennsylvania and Delaware.

The company is working with CBRE Group Inc., which issued a request for information outlining some of McCormick's requirements. Prime among them, McCormick doesn't need to be in its new space until April 2018, leaving plenty of time for new construction. The search is likely to reignite that cross-border competition economic development officials in Maryland and Virginia say doesn't actually exist but really does, as we've seen in the heated pursuit for the FBI, Bechtel, Intelsat S.A. and Sodexo USA, just to name a few.

The RFI is silent on plenty of factors that might help narrow down the field. Pertinent to D.C.-area landlords, the requirement doesn't stipulate whether locations need to be within so many feet of a Metro station. Nor does it list the District itself among the geographic sites it is considering, but whether that means D.C. itself is off limits or just implied to be in the running is unclear.

McCormick officials have also said they want to be "as close as we possibly can" to the company's current Baltimore County headquarters, but how far landlords can stretch that is subject to interpretation.

"That could be anywhere," Studley tenant rep Tom Fulcher told me. "They have four years to go, and in such a wide area, that could be anywhere." Fulcher said going out in the market this early could help sweeten the government incentive pot, but more to the point, he said McCormick is setting the stage to get as advantageous a deal as possible.

So why so broad a search area, and why so fuzzy in its definition? The most logical assumption would be to kick off a bidding war among landlords and economic development officials. A lag time of four years is enough for local and state governments to draft their incentive packages, as seen with Intelsat and Sodexo.

So if it settles on a Greater Washington location, where might it be looking? That's kind of like predicting where a child will look the first time it sees the inside of a candy shop. There will, of course, be several determining factors, including what landlords are willing to offer, labor costs, the labor pool itself. Also to be factored in is how well the company employees who now go to work in Sparks will react to having to commute to, say, Tysons.

In Northern Virginia, there are also a wide range of options. If it's looking for a corporate campus, Exxon Mobil Corp.'s Merrifield campus is still on the market. That could be too big a bite for the company, though, with 1.3 million square feet of existing office space on the 117-acre campus. Other potential development sites could work as well, including The Shooshan Co.'s nearly 500,000-square-foot office at 4040 Wilson Blvd., as would any number of planned developments in Tysons Corner.

Looking at the Free State side of the equation, there are plenty of sites in play and economic development dollars that could be brought to bear. Prince George's County has been touting the merits of its Metro stations, and will have D.C. economic development expert Victor Hoskins (also a former official with the Maryland Department of Business and Economic Development) at its disposal once he starts work later this month. We know from the FBI's ongoing headquarters search there are plenty of other large-block options in the Free State — Greenbelt, Westphalia and even the Landover Mall site. Then there are sites like the Air Rights Center in Bethesda, with just under 698,000 square feet of space being repositioned by MRP Realty and the Rockpoint Group.

There are quite a few interesting options for McCormick if it hasn't ruled out the District, including several the Washington Post looked at in places like NoMa and the Capitol Riverfront. The Wharf, while logical given its obvious seafood tie to Old Bay Seasoning, could be a bit of a tight fit, though. The first two buildings, slated for completion in 2016, are each under 300,000 square feet. But there is more than 1 million square feet of Class A office space planned there, so it's possible PN Hoffman could find a way to accommodate the company.

© 2014 American City Business Journals, Inc.