Feb 05, 2016 David Hubler, Bisnow, DC – via Bisnow
Montgomery County is sometimes viewed, even by its residents, as a fully developed suburban community with little opportunity, or need, for more growth. Bisnow last week reported plans to form a coalition of Bethesda-area residents who want to retain the county’s large stock of single-family homes and are opposed to increased density from new housing construction. That will certainly come up on Feb. 17 at 12435 Park Potomac Ave for Bisnow’s Montgomery County State of the Market event.
Residents, of course, don’t see the county through the eyes of professional developers like Doug Firstenberg (snapped above at another Bisnow event), principal at StonebridgeCarras, who has more than two decades of development experience in the county. “It’s a place where people want to live,” Doug says, with outstanding schools, retail and excellent infrastructure. “It has been an urban infill, transit-oriented development area before all those terms were coined.” In Bethesda, StonebridgeCarras recently completed the Flats, a seven-story, 162-unit apartment building, and the Darcy across the street, nine floors of condos that range from 835 SF one-bedroom units to a 2,935 SF penthouse. Next up for delivery is 8300 Wisconsin Ave with 359 residential units and a Harris Teeter. Doug is bullish also on White Flint, once a prime shopping area that’s beginning to undergo a major redevelopment. Once Lerner Enterprises, Tower Cos and Lord & Taylor resolve their multimillion-dollar legal dispute, other redevelopment will follow, he predicts. “You’re starting to see these other areas really start to transform and become dynamic,” Doug says. Commercially, however, one wonders about the future of the office parks along I-270 and elsewhere that aren’t Metro accessible and have never been viewed as dynamic.
1788 Holdings principal Larry Goodwin says the volume of planned, intense mixed-use development in the White Flint area will create a more robust live/work/play environment, and that will be good for the county. That said, he concurs that the office market overall hasn’t been vibrant in recent years. “When I see only two new buildings being delivered in this cycle in downtown Bethesda,” Larry says, “and they have been slow to lease up despite being the only new product recently built, that would suggest the county’s office market is not a robust environment.” Perhaps to show its faith in MoCo’s viability—and to get a close-up perspective of the lay of the land—1788 recently moved its HQ to downtown Bethesda from downtown DC. Last summer, 1788 and Lantian Development purchased the Shady Grove Office Park, in the heart of North Rockville, with plans to entitle and redevelop the park into a pedestrian-friendly, mixed-use town center over the next five to 10 years. “We felt like we could create a compelling environment in that area and not be competing” with so many other people looking to develop elsewhere, Larry explains.
Foulger-Pratt president of development Brigg Bunker likes the county precisely because of its multi-tenant residential development. “There’s new product in different price points like we haven’t seen in Montgomery County for quite some time,” he says. The demand is across the board, stoked in part by Baby Boomers moving out of their single-family homes and into smaller apartment units with less maintenance. Given the demographics of the area, Brigg says, expect to see more such downsizing in the future. In December 2015, Foulger-Pratt and partner Willco broke ground on Core, a 16-story, 292-unit apartment building at 8621 Georgia Ave, in Silver Spring’s business district. The building will include 52 affordable units and about 1,500 SF of ground-floor retail space. But even with Montgomery’s strong professional job base, Brigg is not as enthusiastic about the county’s commercial market, especially when it comes to “elephant hunting”—finding tenants to pre-lease large spaces. “There’s not a lot of 30-plus-thousand SF tenants looking to locate in Montgomery County,” he says. “And if they are [looking], they’re staying in the county, moving from one building to another. We’re not getting a large base of tenants moving into the county.” Brigg and Foulger-Pratt will have to hunt smaller game at their new 12435 Park Potomac Ave office building—the firm’s new HQ and the location of Bisnow’s Montgomery County State of the Market on Feb. 17 at 7:30am.