T H E G AZ ET T E
Wednesday, January 8, 2014 r
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National Cancer Institute Rockville’s Moore undecided on council run Two Gaithersburg leases boosted county’s officials plan to seek District 3 seat office market in 2013 n
BY
BY SONNY GOLDREICH SPECIAL TO THE GAZETTE
Three little letters — NCI — spelled most of the story for the local office market in 2013, as the new National Cancer Institute headquarters in Rockville swung Montgomery County into a positive year. Things started with a bang last January, when the NCI took delivery of the 575,000-squarefoot complex in the Shady Grove Life Sciences Center owned by Johns Hopkins University. The $200 million build-to-suit project developed by JBG of Chevy Chase was a major reason the Maryland suburbs lead the Greater Washington, D.C., region in office space absorption for the year. The two-building complex at 9613 Medical Center Drive in Rockville turned what would have been a dismal year for Maryland into a positive one. Otherwise, landlords and developers in Montgomery County and the entire D.C. region suffered from federal gridlock, consolidation and shrinkage, which prolonged a belated taste of the Great Recession that had bypassed the area during a binge in government growth. While the region showed negative116,722 square feet of absorption, Montgomery, Frederick and Price George’s counties combined for positive 419,174 square feet, according to the fourth-quarter office market report by broker Jones Lang LaSalle. That was all in Montgomery, where tenants took a net 581,644 square feet. Prince George’s reported negative 94,408 square feet and Frederick was negative 68,062 square feet. Montgomery also fared better than the region in total vacancies, with a 15.8 percent rate, compared with 16.2 percent for the greater D.C. market. The year ended on a preNew Year’s Eve federal hangover, with the biggest lease in the fourth quarter a renewal signed by the Nuclear Regulatory Commission, which retained 347,922 square feet at the 2 White Flint building owned by Lerner Enterprises of Rockville. But the agency also subleased 186,313 square feet to the Food and Drug Administration at LCOR’s new 3 White Flint, which was delivered more than a year ago and was left more than half empty due to the NRC’s personnel miscalculations. This year could be a bit brighter, as the federal Bipartisan Budget Act signed during the fourth quarter brought some relief from sequestration and will allow agencies to resume spending. “Under the new budget deal, sequestration cuts will be reduced by $63 billion and agencies will have increased spending authority — a potential catalyst to regional office demand,” Jones Lang LaSalle reported in its fourth-quarter Office Insight. Kurt Stout, executive vice president for broker Colliers International’s Government Solutions unit, agreed, “sort of,” as he wrote in his Capitol Markets blog. He concluded: “The [budget
act] provides tremendous symbolic importance, limited budget relief and no long-term roadmap. So, it’s ‘sort of’ impactful on federal leasing because it indicates bipartisan momentum, which has created optimism. With optimism and a little bit of budgeting runway, agencies are more likely to plan strategically for their space needs and possibly enter into longer-term lease commitments.” That means some agencies are likely going to be able to move beyond short-term lease extensions and sign onto longer deals. That’s the case with the Department of Health and Human Services, which already has committed to a 15-year lease renewal for 935,000 square feet at the Parklawn Building in Rockville, which JBG expects to deliver this summer after a $270 million renovation. The NRC also will be looking to consolidate under a long-term lease that will replace the five-year renewal deal it signed with Lerner. But a grand budget bargain will be required to ensure longterm funding of federal tenants’ office space needs, Stout wrote. Otherwise, many agencies will continue to be stuck in what he called real estate “triage,” with short-term lease extensions making it impossible to strike larger deals that would allow them to redesign, consolidate and shrink the federal footprint. A Colliers analysis shows that more than 40 percent of leases expiring in the past year were extended three years or less. And the General Services Administration will have to scramble in the short term, as one-fourth of all of its leases are scheduled to expire in the next two years. That has left landlords stuck with shrinking property values as once-golden federal tenants are looking more like monthto-month residential squatters who make it impossible to slap on fresh paint and carpets to attract new renters. “The government’s inability to commit to long-term lease contracts has been troubling for lessors faced with loan maturities, and the short-term leases have substantially eroded the exit valuations of governmentleased properties,” Stout wrote.
STAFF WRITER
Rockville Councilman Tom Moore says he expects to decide within the next week or so whether he will seek a seat on the County Council. Moore told The Gazette Thursday that he would like to represent District 3, which covers Gaithersburg, Rockville and some surrounding areas, but he has not yet decided. “It’s a great opportunity to serve, I’m just not sure yet,” he
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STAFF WRITER
Police are looking for a bank robber who struck a Bethesda bank the day after Christmas — five days after another bank was robbed in Potomac. The Bethesda robbery took place just after 4:30 p.m. at the M&T Bank at 7920 Norfolk Ave. in downtown Bethesda. A man entered the bank and gave a teller a note demanding cash. The robber told the teller he was armed, but did
Transwestern announced that it has been awarded the exclusive leasing services for Metro Executive Park in Rockville, a two-building office complex owned by an affiliate of Equus Capital Partners of Philadelphia. The buildings, at 15800 and 15850 Crabbs Branch Way, total 130,000 square feet. The complex consists of two three-story buildings with 21,000-squarefoot typical floors. Amenities include Ride-On bus service to the nearby Shady Grove Metro station, an on-site bank and a breakfast/luncheon cafe. The buildings also offer ample tenant and visitor parking and easy access from Md. 355, Interstates 270 and 370, and the Intercounty Connector.
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Holdups cap busy year in county BY ST. JOHN BARNED-SMITH
Transwestern hired to lease Rockville buildings
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Krasnow, who was recently named deputy director of the Montgomery County Planning Department, decided not to seek the District 3 seat. “I would never run against Rose,” Moore said, calling Krasnow a mentor and good friend. “When she decided not to run, it really left the door Moore wide open. “It’s been a long time since someone from Rockville has represented District 3.” If Moore enters the race,
he would not be the only citylevel official seeking to represent District 3. Gaithersburg Mayor Sidney A. Katz (D) told The Gazette on Thursday that he plans to run for the seat. He said he expects to make a formal announcement in a couple of weeks. Gaithersburg Councilman Ryan Spiegel (D) also said he plans to run for the District 3 seat. As of Tuesday afternoon, no one had filed to run with the Board of Elections. Current County Councilman Philip M. Andrews (D) of Gaithersburg last year filed to run for county executive this year. He has represented District 3 since 1998.
Same bank robber may have hit in Bethesda, Potomac
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ELIZABETH WAIBEL
said. Moore was re-elected to his second term on the Rockville council in November. His campaign website did not identify him as a member of any political party. Patch initially reported in December that Moore was considering running for County Council. Moore said the county and city election schedules mean that any sitting city leader who wanted to run for county office would have to start campaigning soon after the city election. The deadline for county candidates to file is Feb. 25. Moore said he began seriously considering a run after former Rockville Mayor Rose
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not display a weapon, according to Montgomery County Police Officer Janelle Smith. Afterobtaininganundisclosed amountofcash,therobberfled. Police said the robber might be the same one behind a Dec. 21 robbery at another M&T Bank branch, on River Road in Potomac. Just before 3 p.m. that day, a man entered the bank, demanded cash and also implied he had a gun, but did not show a weapon. Police have described the Bethesda robber as 35 to 40 years old and 5 feet 7 inches to 5 feet 9 inches tall. Surveillance photos from the banks showed a robber wearing the same baseball cap
both times, according to police. Officials at the Potomac branch declined to speak to The Gazette. A woman at the Bethesda branch said the robbery there left the tellers shaken, but unharmed. Since the robbery, the branch has hired a security guard, she said. In the earlier robbery, police described the man as being 25 to 30 years old, 5 feet 5 inches to 5 feet 8 inches tall and weighing 130 to 150 pounds. These last two bank robberies of 2013 capped a busy year for robbers in the county. Last year, there were four times as many bank robberies as in 2012, when there were six, said
Angela Cruz, a county police spokeswoman. Ten of the 24 robberies took place from late October through the end of the year. Police ask anyone with information about the robberies to call 866-411-8477, and can do so anonymously. Crime Solvers will pay a cash reward of up to $10,000 for information. Philip Hosmer, a spokesman for M&T Bank, said a reward of up to $5,000 was possible from the bank for information leading to an arrest or indictment, because the bank is a member of the Maryland Association for Bank Security. sjbsmith@gazette.net