Saul Centers adds to Rockville portfolio with $23M strip mall buy -- Gazette.Net


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Saul Centers announced that it acquired a 7-acre retail property on Rockville Pike for $23 million, adding to the Bethesda company’s portfolio of potential mixed-used development sites in an area designated for high-density growth.

The existing 48,000-square-foot retail strip at 1500-1570 Rockville Pike is a modest commercial site, with tenants including Party City and the Fitzgerald auto body shop on the east side of Route 355. But the property’s value lies in its location, zoning and vast asphalt parking lot.

Saul said it “does not anticipate redeveloping the property in the foreseeable future,” but it noted that it is zoned for up to 700,000 square feet of rentable mixed-use space. The property, which is 91 percent leased to multiple tenants, is just north of the Twinbrook Metrorail station on the Red Line.

The previous owner, Investment Properties of Rockville, has pitched a hypothetical urban design complex called Devlin Place, named after the Devlin Lumber Yard that once occupied the space. The project could include office, retail and residential space, with buildings as high as 150 feet tall.

The plan would fit with Rockville’s “Envision a Great Place” concept that would transform a two-mile stretch of Rockville Pike into a grand urban boulevard.

At the nearby Twinbrook station, JBG Cos. of Chevy Chase is developing 26 acres of surface parking lots owned by the Washington Metropolitan Area Transit Authority with 2.2 million square feet of office, residential and retail space.

The new Saul acquisition follows its $33.25 million purchase last year of the Metro Pike Center strip mall on Rockville Pike, which is in the new White Flint Metro high-density zone. The 63,886-square-foot property is on a 4.5-acre site that has the potential for more than 800,000 square feet of residential and commercial redevelopment.

The two-story center, at 11560 Rockville Pike, is on the west side of the road at the intersection with Nicholson Lane, less than 100 feet from the Metro station. On the east side, Saul Centers bought another small retail property for $15.5 million in 2010, where the company is considering long-term plans to build a 10-story commercial building.

Saul Centers also announced that it sold the 55,000-square-foot Belvedere Gardens shopping center in Baltimore for $3.9 million, net of closing costs.

RBS Citizens leads financing of Rockville project

RBS Citizens bank announced it is leading a $67.1 million senior loan syndication to finance the first phase of the new Rockville Town Center project, which includes hotel, multifamily residential and retail space.

The complex is being developed by Duball Rockville, a joint venture of real estate development and investment firm Duball and CIM Urban Real Estate Fund. An additional $4.2 million in financing has been provided by the city of Rockville and Montgomery County.

The 15-story, transit-oriented project will bring 263 residences, 600 parking spaces, 17,000 square feet of street-level retail space and a 140-room Cambria Suites Hotel to downtown Rockville. Groundbreaking took place late last month with completion of the project expected in early 2015.

“RBS Citizens is excited to be playing an important role in a project that will change the streetscape and skyline of Rockville for generations to come,” Tim Leon, regional manager of commercial real estate for RBS Citizens, said in a news release.

Costello Construction wins bid for $35M Silver Spring library

The Montgomery County Department of General Services announced that it has selected Costello Construction of Columbia to build the Silver Spring Library, a 70,000-square-foot multi-use space budgeted for $35 million.

Costello, which also built the Silver Spring Civic Center at Veterans Plaza, will construct a five-story center with the library occupying the top three floors. The building will include entrances on both Wayne Avenue and Fenton Street .

The county is in lease negotiations with Pyramid Atlantic to occupy part of the basement, and first and second floors. The agreement will require the nonprofit art group to offer classes to the public in the second-floor studio space.

The total cost of the library project is budgeted for $69.5 million.

Columbia industrial building sells for $6.9 million

The Heathrow Business Center in Columbia sold for $6.9 million, accord to McShea & Co. of Gaithersburg, which represented the seller, Ben Epstein & Associates of Silver Spring.

An unnamed Maryland investor bought the property at 9176 Red Branch Road, which is fully leased. The 81,067-square-foot building is part of the Oakland Ridge Business Park, a 2.1 million-square-foot mature office and industrial park.

Baltimore medical office space trades for $21.8M

The leasehold interest in four floors of the Johnston Professional Building on the campus of Medstar Union Memorial Hospital in Baltimore sold for $21.8 million, according to Cassidy Turley, which brokered the deal on behalf of the New York seller, Johnston Professional LP.

The 79,360-square-foot space in the eight-story building sits above the lower four floors owned by the hospital at 3333 N. Calvert St.

“This was a complicated transaction with many moving parts that included modifications to the underlying tenant leases, easements and air rights lease,” Jay Wellschlager, senior vice president and principal at Cassidy, said in a news release.

Target plans new store in Baltimore

Retail giant Target announced plans to open a new store near Baltimore’s southeastern waterfront in October.

The 135,000-square-foot store will open on Boston Street as part of the Canton Crossing Shopping Center and employ about 200 people, according to a statement from the Minneapolis big-box company.

Construction began in October on the 322,000-square-foot shopping center, which also will include a Harris Teeter grocery.

The center, under development by Chesapeake Real Estate Group and BCP Investors, was originally planned as the retail component of the First Mariner Bank headquarters complex. But developer Edwin F. Hale Sr. of First Mariner sold the property during the Great Recession.

Commercial real estate news items may be mailed to Robert Rand, The Business Gazette, 9030 Comprint Court, Gaithersburg, Md. 20877; emailed to rrand@gazette.net; or faxed to 301-670-7183.