Plans to redevelop the Falkland Chase apartments in downtown Silver Spring have been jelling since 2006, but the new owner, the JBG Cos., is in no hurry to build 1,250 approved units and a grocery store.
“We see a lot of apartment projects under construction right now and deliveries coming,” said Rod Lawrence, a partner in the Chevy Chase firm. “Short term, it might not be feasible, but it’s not far into the future.”
No price was disclosed for the sale of the property, and Lawrence said only that JBG paid more than the $58.9 million purchase price when the complex last sold in 2003.
He said the company will spend the next six months assessing the market and meeting with county officials to determine exactly what is needed to move forward with the project to redevelop part of the 450-unit garden apartment complex, which sits at the corner of 16th Street and East West Highway next to the Silver Spring Metro and future Purple Line station.
Two-thirds of the property has been designated for historic preservation, but the previous owner, Home Properties of Rochester, N.Y., won approval to demolish 182 rental units on the nine-acre north parcel.
Site plans for the $300 million project include a pair of 13-story buildings in the back of the property and two eight-story buildings at the front, including 60,000 square feet of retail space and 200 underground parking spaces.
In the long run, JBG also plans to build at Falkland Chase to take advantage of its transit-oriented development potential, but the firm is content for now with the property’s strong record of producing steady rental income.
Falkland Chase generates “phenomenal cash flow,” said Tiffany Butcher, a JBG principal who oversees its residential asset management. The complex, completed in 1937, had an occupancy rate of about 96 percent last year, according to a Home Properties filing with the Securities and Exchange Commission.
Lerner Enterprises announced that it is negotiating with a lead tenant for Fallsgrove Plaza, a 110,000-square-foot medical office building in Rockville.
Vertical construction has topped out on the five-story property at Shady Grove and Blackwell roads. The property sits across from Shady Grove Adventist Hospital and the Shady Grove Life Sciences Center. Rockville-based Lerner received gold certification for the building by the U.S. Green Building Council.
Gittleson Zuppas Medical Realty of Bethesda is handling medical leasing for the building, which also will include 16,000 square feet of ground-level retail space fronting Shady Grove Road.
“We are currently in negotiations with a lead tenant and the overall interest from prospective tenants in Fallsgrove Plaza has been very exciting,” said David A. Gittleson of Gittleson Zuppas in a news release. “Our future tenants will be very pleased with the finished product in this state of the art building and will enjoy its first class amenities and proximity to the hospital, shopping and dining.”
Federal Realty Investment Trust plans to start construction next year on two more buildings at Pike & Rose, a redevelopment project in Rockville that will replace its Mid-Pike Plaza strip mall with a 3.5 million-square-foot mixed-use complex.
Already under construction are two luxury apartment buildings with 493 units, 80,000 square feet of office space and 150,000 square feet of retail space. The Rockville firm has not decided exactly what the two new buildings will be as it moves into the second phase of development of the 24-acre site, which sits a quarter mile from the White Flint Metro at the corner of Rockville Pike and Old Georgetown Road.
“It could be more residential, certainly,” said Evan Goldman, the company’s vice president of development. “It could be more retail. It could be a hotel.”
Or it could be any combination of seven planned buildings, which also include as much as 475,000 square feet of office space. But neither of two approved office buildings are currently in the plans for next year’s construction, which Goldman describes as a “small second phase.”
He noted that office and hotel space typically follows amenities in large mixed-use developments, similar to Federal Realty’s projects at Bethesda Row and Rockville Town Center.
“Once we get the rental open, that generally does drive demand for office space,” Goldman said.
PerSei, a 174-unit apartment building, is set for delivery next summer, and the 319-unit Pallas is expected to deliver in the first quarter of 2015. Both will be managed by Greenbelt-based Bozzuto Management.
Upon completion, Pike & Rose will include 1.1 million square feet of office space, 450,000 square feet of retail, 1,500 residential units and 250,000 square feet of hotel space.
Despite the project’s size, Goldman said he isn’t worried about what is shaping up to be soft markets for both office and residential space. The complex will be built in three or four phases and the company plans to hold ownership far into the future.
Fluctuating demand is less important, because “you might have one or two bad years in the early years but rents go up dramatically later on,” he said.
Although an oversupply of rental housing might be developing in parts of Montgomery County, Goldman noted that Pike & Rose will face demand from only one other apartment building expected to be delivered in the White Flint market within the next four years.
“We obviously watch supply and demand but one of the differences for us is we are generally long-term investors,” Goldman said. “We don’t sell very often.”
Chicago-based Waterton Associates sold the 261-unit Aston Woods garden apartment complex in Silver Spring for $40.8 million to Azure Partners of New York, according to broker HFF, which represented the seller.
The property, which sold clear of existing debt, is at 3411 Gateshead Manor Way, northeast of the Fairland exit of the Intercounty Connector. The location provides easy access to U.S. 29 and I-95.
Constructed in 1986, the property underwent almost $3 million in capital improvements during the past five years, including interior unit renovations and improvements to common area amenities and building systems. Aston Woods is 94 percent leased.
“Aston Woods has seen the successful implementation of a renovation program that still provides room to increase rents through modest additional upgrades, and its appeal has been improved by major area road improvements in the region,” David Nachison, an HFF senior managing director, said in a news release. “Aston Woods’ location in one of Montgomery County’s closest submarkets to the job growth being felt around Fort Meade, has also expanded its draw from employment growth on the military base, and a growing contractor base focused on national security.”
Manekin, which manages or owns numerous properties in Frederick County, has merged its brokerage and property management operations with Colliers International, creating the largest third-party management firm in the Baltimore region.
The non-cash deal did not include Manekin’s development and construction groups.
Manekin brings 10 million square feet of managed property to Colliers International, Baltimore’s 7 million square feet. The merged entity will be branded and identified as Colliers International, and Manekin principals Richard Alter and Cole Schnorf will become equal partners in the combined management company.
As part of the merger, more than 40 employees with Manekin’s property management and brokerage groups, including six brokers, will join Colliers’ more than 80 existing employees. Adam Nachlas, Manekin’s senior vice president and director of brokerage, and George Santos, senior vice president, will become principals within the Colliers International, Baltimore brokerage group.
Manekin, founded in 1946, is one of the largest full-service commercial real estate companies in the region and has a history of projects valued at more than $2 billion.
Last year, Greenfield Partners tapped Manekin to manage a portfolio of 15 buildings, including 110 Thomas Johnson Drive, a 123,000-square-foot office property in Frederick. Manekin also still has an ownership and management stake in part of the 270 Technology Park, a 75-acre business park it originally developed.
Manekin also returned to retail management in Frederick County last year, taking over leasing of Gold Mile Plaza, a 13,500-square-foot strip mall. The firm previously developed Ballenger Creek Center, Ballenger Creek Plaza, Catoctin Professional Center and Westview Corporate Campus.
Brivo Systems, a building security firm, is relocating within Bethesda, according to Transwestern, which brokered the move two blocks from the Metro station.
Brivo has signed a 16,116-square-foot lease at Chevy Chase Garden Plaza, located at 7700 Old Georgetown Road. The eight-story, 185,470-square-foot office building was built in 1988.
“Brivo’s relocation … is further evidence of a flight to quality among tenants,” said Transwestern senior vice president Scott Randolph in a news release. “Chevy Chase Garden Plaza is located within walking distance to public transportation and amenities, which will help Brivo to recruit the best and brightest employees from around the country.”
Brivo is at 4330 East-West Highway. Its new space is in a building that won gold certification from the U.S. Green Building Council last year.