“Commercial Real Estate: Grocery lease propels Congressional Plaza redevelopment”

Commercial Real Estate: Grocery lease propels Congressional Plaza redevelopment

Posted: 03 Mar 2011 07:25 PM PST

Fresh Market to move in; more changes possible

Federal Realty Investment Trust of Rockville announced that a new grocery has signed a lease to fill the vacancy left by Whole Foods Market at Congressional Plaza, where the company also is exploring a mixed-use redevelopment that would add residential space.

The Fresh Market, a North Carolina specialty grocer, will occupy 19,860 square feet at the 332,000-square-foot center in Rockville, which will be the chain's first store in Montgomery County. The deal marks the latest in a string of recent new retailers coming to the area, which is across Rockville Pike from the Twinbrook Metro station.

But bigger changes could soon come to the shopping center, as Federal Realty explores how to maximize the potential of mature properties in its portfolio, along the lines of the redevelopment of Mid-Pike Plaza.

That project will transform the 308,000-square-foot retail center south of Congressional Plaza into a 3.4 million-square-foot complex with retail, office, hotel and residential space under the sketch plan approved by the county Planning Board in January.

"An intense effort to uncover additional value creative opportunities throughout the portfolio has us beefing up on our leasing and redevelopment staff," CEO Donald Wood said during an earnings conference call last month.

"Additional residential opportunities on our existing land look very possible at places like Congressional Plaza, like Bethesda ... and others, not to mention our large development in Mid-Pike," Wood said.

Acquired by Federal Realty in 1965, Congressional Plaza already has undergone a recent retail makeover, and a 146-unit luxury apartment complex was completed in 2003. Construction on the Mid-Pike project is expected to start by the middle of next year. The $200 million first phase will include 230,000 square feet of retail and office space and about 400 residential units and parking.

In the meantime, Federal Realty has had little trouble filling vacancies at Congressional Plaza.

"The addition of a new specialty grocer further solidifies Congressional Plaza as the dominant shopping center on Rockville Pike," Chris Weilminster, senior vice president of leasing for Federal Realty," said in a news release.

Other recent arrivals include Last Call Studio by Neiman Marcus, Matchbox Vintage Pizza Bistro, and Bark!, a natural and organic pet food store.

Like Whole Foods, Fresh Market will include a bakery, a full-service meat counter, ready-to-serve entrées, fresh seafood, produce and cheese departments, and a large selection of organic products.

Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; e-mailed to smonroe@gazette.net; or faxed to 301-670-7183.

Montgomery College breaks ground on bioscience center

Collins Jones, a Montgomery College professor and biotechnology coordinator, can't wait for 2014.

That's when the college's Bioscience Education Center, which breaks ground Monday, is scheduled to open on the Germantown campus.

The new building will add 50 percent more academic space for science and technology studies, including 18 labs, each designed specifically for certain courses such as anatomy and physiology, biology, biotechnology, chemistry, ecology and genetics.

The state and Montgomery County split the funding for the $32 million, 127,000-square-foot center. It is part of the Germantown Development Project, which includes the planned Germantown Science and Technology Park — 1 million square feet for advanced technology and science company offices and laboratories — plus the 32,000-square-foot Germantown Innovation Center, which opened in 2008 and can house 20 to 30 companies with 45 offices and 11 wet labs.

While the school's existing labs do not resemble those in the industry, the new labs will.

In a biomanufacturing suite, students will be able to make an antibody on a mock scale in a room modeled after those used by the Food and Drug Administration, Jones said. As a result, students will be able to more closely follow FDA regulations on manufacturing processes and facilities.

"I never will be able to teach everything the industry, but [the new labs] will get people in proper mindset when going into the field," he said.

Tutoring support and educational resources will be available in a learning center, which will have computers with educational scientific software, anatomical models, space for small groups and study space. The center also will have six classrooms, offices, a computer room and a detached greenhouse.

The education center likely will qualify for gold certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design program, due to features such as solar panels, a green roof system and wind turbines, said Elizabeth S. Homan, a college spokeswoman.

The new building is long overdue, said Kathy Michaelian, dean of business, science, mathematics and technology.

Students now learn in a large open lab used for several science and technology subjects, a small organic chemistry lab, or a small biotech lab that Jones said was converted from a storage room about five years ago.

Fort Ritchie project stalled

by chemicals disclosure

Corporate Office Properties Trust of Columbia announced that the Army's disclosure of testing of defoliants and herbicide chemical weapons at the shuttered Fort Ritchie in Washington County will further stall the Columbia company's development of a 1.7 million-square-foot mixed-use project.

The company, whose plans already have been delayed by a lawsuit filed on environmental grounds, said in a statement that it cannot move forward until it determines the precise locations and extent of the testing conducted within Fort Ritchie.

The military base in Cascade was closed in 1998 as part of the Pentagon's Base Realignment and Closure program. Corporate Office Properties bought 500 acres of the site from PenMar Development in 2006 for $4.2 million, and paid about $775,000 in November 2007 for the remaining 91.5 acres. Since then, the company has made little progress on using the fort's historic stone structures as a base to build state-of-the-art office, retail, recreational and residential facilities.

Last month, the Army disclosed a study published by the Pentagon in December 2006 regarding the testing and use of tactical defoliants and herbicides at various military installations throughout the U.S., including Fort Ritchie. It also disclosed a report published in 1956 by the Chemical Corps Research and Development Command Biological Warfare Laboratories titled "Defoliation Investigations During 1954 and 1955," which describes other testing and the use of tactical defoliants and herbicides at Fort Ritchie.

The project has been tied up since November 2009, when a U.S. District Court judge ordered the company to cease development pending a revised Record of Environmental Consideration or a Supplemental Environmental Impact Statement by the Army.

The company said it was not made aware of the 2006 report, the 1956 report, or the prior use of tactical defoliants/herbicides at Fort Ritchie until last month.

Silver Spring building

sells for $3.5 million

An investment group aligned with Adventist HealthCare of Rockville bought a five-story office building in Silver Spring for $3.5 million, according to NAI KLNB, which brokered the deal.

"With its ample parking and the Metro providing easy connections to downtown Washington, D.C., the building is ideal for this healthcare-oriented use," Chris Kubler of NAI KLNB said in a statement. "The additional development potential the site can accommodate was also clearly attractive to the buyer."

The company represented owner Jose F. Bonelli in the sale of the 17,000-square-foot property at 8807 Colesville Road. The Walker Group represented the buyer.

Positioned near the downtown Silver Spring Metro station, the building is almost vacant with the exception of the Bonelli medical office on the fifth floor. An adjacent surface parking lot is suitable for 52 vehicles, with an additional five spaces in a covered area.

The property comprises two separate parcels totaling nearly a half acre that presents the possibility for the development of additional office space.

Three buildings completed at

Carroll County business park

Developer St. John Properties of Baltimore said it has completed the first phase of Liberty Exchange, a 10-building, 225,000-square-foot mixed-use business community near Eldersburg in Carroll County.

"With more than 100,000 square feet of speculative office and retail space now under roof, we are making significant progress in our pre-leasing activities, as highlighted by the physician group lease signing," Jerry Wit, senior vice president for marketing, said in a statement. "We have generated activity for and interest in each building, and will be making announcements on additional leasing successes in the near future."

The company has delivered a 61,000-square-foot research and development flex-space project, a 25,000-square-foot office building and a 16,000-square-foot retail project. The complex is near the intersection of state Routes 32 and 26 on a 40-acre tract that was formerly Freedom Golf Center.

Orthopaedic Associates of Central Maryland, an 11-physician practice with orthopedic surgeons, podiatrists, physical medicine and rehabilitation doctors and physical therapists, has signed a lease for 12,240 square feet of space in the Liberty Exchange office building.

Chesapeake Lodging plans

to pay $68M for D.C. hotel

Chesapeake Lodging Trust of Annapolis plans to acquire the 204-room Courtyard Washington (D.C.) Capitol Hill/Navy Yard for $68 million, or about $333,000 per key.

The trust intends to fund the acquisition by assuming about $37.7 million of existing mortgage debt and by borrowing under its revolving credit facility.

The hotel was built in 2006 in a mixed-use residential, hotel and parking development in Southeast Washington between the U.S. Capitol and the Anacostia River. The surrounding area has experienced significant redevelopment since the consolidation of the Navy Yard in the 1990s and more notably the opening of 41,000-seat Nationals Park in 2008, according to Chesapeake Lodging Trust information.

Staff Writer Jen Bondeson contributed to this report.

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