JBG SMITH expands Tysons portfolio with acquisition of three-building office campus near Dulles Toll Road

What are the full details of JBG SMITH’s Tysons Dulles Plaza acquisition and its proposed redevelopment strategy?

JBG SMITH (NYSE: JBGS), a real estate investment trust based in Bethesda, Maryland, has acquired the 15-acre Tysons Dulles Plaza, a three-building office campus totaling 500,000 square feet in Tysons, Virginia. This strategic investment expands JBG SMITH’s footprint in Northern Virginia’s high-demand mixed-use corridors and underscores the developer’s ongoing strategy to reposition aging office assets in metro-served, high-density submarkets.

The property includes 1,553 surface and structured parking spaces and sits directly adjacent to Route 267, the Dulles Toll Road, while remaining walkable to the Silver Line’s Spring Hill Metro station. These transit-access advantages were central to the acquisition rationale. JBG SMITH intends to redevelop one of the three buildings into residential space, while retaining and modernizing the remaining towers for continued commercial tenancy.

The acquisition comes as part of the American real estate investment trust’s broader push into urban-suburban nodes, where the demand for mixed-use and transit-oriented living has increased, even as the broader office sector faces declining occupancy and structural headwinds post-COVID.

Why is JBG SMITH investing in office properties despite negative headwinds in the commercial real estate sector?

JBG SMITH’s acquisition arrives amid a backdrop of sector-wide distress in U.S. office real estate, particularly in urban cores. The ongoing impact of remote work has dampened traditional office demand across primary markets. However, institutional investors and real estate operators with redevelopment capabilities are now pursuing value-creation opportunities in underutilized or discounted commercial campuses.

According to JBG SMITH’s Chief Investment Officer George Xanders, the current market conditions offer compelling entry points. “Notwithstanding regional economic headwinds and the negative impact of remote work on the office sector, we see distress leading to extremely attractive office investment opportunities for the first time in more than a decade,” he stated in the firm’s release.

Institutional sentiment broadly reflects this contrarian thesis: well-capitalized real estate firms with rezoning expertise, favorable borrowing capacity, and development scale are actively exploring distressed Class B and C office assets with long-term redevelopment potential. JBG SMITH fits this profile, with a track record of repositioning office-heavy districts into mixed-use ecosystems that appeal to both commercial and residential users.

How does the Tysons acquisition align with JBG SMITH’s mixed-use redevelopment blueprint demonstrated in National Landing?

JBG SMITH is well known for its placemaking success in National Landing, a submarket encompassing Crystal City, Pentagon City, and Potomac Yard. The area has undergone a major transformation in the past five years, most notably with the arrival of Amazon’s second headquarters (HQ2) and the planned Virginia Tech Innovation Campus. In National Landing, JBG SMITH successfully converted a number of older office buildings into vibrant residential, retail, and community assets.

Chief Strategy Officer Evan Regan-Levine emphasized the relevance of that experience to Tysons: “In National Landing we were able to reduce the stock of operating office buildings and transform many of them into new residential and retail offerings—aligning with lower levels of net demand for office—while also improving the desirability of the neighborhood.”

That blueprint will be replicated at Tysons Dulles Plaza. The firm’s early focus will be on rezoning one tower for residential conversion, while preserving the other two for enhanced long-term commercial use. This dual-track approach allows JBG SMITH to hedge between fluctuating office demand and rising housing requirements, particularly in Northern Virginia’s suburban markets where infrastructure, schools, and transit access remain key housing drivers.

What is the significance of Tysons Dulles Plaza’s location and how does it support long-term mixed-use development?

The Tysons Dulles Plaza campus is strategically located in the epicenter of Tysons, Virginia—one of the fastest-evolving suburban commercial centers in the Washington DC metro area. The property’s proximity to the Spring Hill Metro station on the Silver Line and its adjacency to Dulles Toll Road provides direct regional connectivity to Dulles International Airport, Reston, Arlington, and downtown DC.

In recent years, Tysons has transitioned from a car-centric office park into a more walkable, transit-served district, with increased zoning allowances for residential and retail uses. County planners and state infrastructure agencies have heavily invested in the area’s public transport and streetscape design, making it more conducive for live-work-play developments.

From an institutional viewpoint, Tysons now competes with nearby submarkets like Rosslyn-Ballston and Reston for tech tenants, residential absorption, and placemaking dollars. Analysts tracking Northern Virginia real estate view Tysons as an ideal case study for suburban office-to-residential transformation, particularly given its large parcels, flexible zoning overlays, and developer-friendly permitting pathways.

How does JBG SMITH’s current portfolio and development pipeline support its Tysons redevelopment ambitions?

JBG SMITH currently owns and operates 11.9 million square feet of office, residential, and retail assets, with an additional 8.9 million square feet in its development pipeline. Approximately 75% of its current portfolio is concentrated in National Landing, where the firm has established a reputation for delivering smart, green, and amenitized properties.

The American real estate developer’s strategic edge lies in its integrated capabilities across acquisition, entitlement, vertical development, and long-term operations. With a strong emphasis on sustainability, carbon-neutral operations, and smart building tech, JBG SMITH has earned the trust of public-sector tenants, corporate anchor clients, and institutional financiers.

In addition to zoning flexibility, the firm’s balance sheet and liquidity profile allow it to engage in opportunistic investments such as Tysons Dulles Plaza, where pricing and timing reflect below-replacement cost conditions. The asset was acquired at what the firm describes as “historically favorable pricing,” suggesting a discounted valuation relative to its redevelopment potential.

What is the expected outlook for JBG SMITH’s Tysons strategy and broader market activity?

Looking ahead, JBG SMITH is expected to pursue similar acquisitions in the greater DC metro region, especially in submarkets where older office campuses can be repositioned for multifamily or mixed-use density. Analysts expect that the REIT will remain disciplined in its capital allocation while leveraging its entitlements experience to fast-track new residential construction in high-barrier-to-entry locations.

Investors and institutional observers have noted that JBG SMITH’s ability to hedge between asset classes—office, residential, and retail—gives it flexibility in navigating uncertain demand dynamics. While the broader office sector faces secular decline, pockets of high-performance real estate remain, particularly when paired with new infrastructure or favorable zoning overlays.

At Tysons Dulles Plaza, initial planning activities—including rezoning, tenant repositioning, and design studies—are likely to commence in the next several quarters. The investment marks a continuation of JBG SMITH’s thesis that long-term value lies not in legacy office yield, but in active transformation of real estate into highly usable, transit-connected, and community-anchored formats.