T H E G AZ ET T E
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Wednesday, December 4, 2013 r
WRIT closes $307.2 million deal on medical buildings Four properties near Rockville’s Shady Grove Adventist Hospital included n
BY SONNY GOLDREICH SPECIAL TO THE GAZETTE
Washington Real Estate Investment Trust announced that it has closed two separate sales totaling $307.2 million for its medical portfolio stretching from Rockville to Alexandria, Va., and two other office properties. The Rockville firm reported two deals covering about 877,000 square feet of medical office space, plus another 216,000 square feet of office space, much of it filled with medical tenants. The aggregate sale proceeds for the two transactions came to $281 per square foot. “As planned, the structure of this large transaction has provided WRIT the flexibility to redeploy the sales proceeds into assets that are aligned with our current strategy,” Paul T. McDermott, WRIT’s president and
chief executive officer, said in a press release. “We look forward to executing the two remaining medical office sales transactions in the next few months.” During an earnings call this month, company officials said the medical building selloff was a move to raise capital rather than borrowing to expand. The first sale transaction involved four buildings in Rockville, totaling more than 207,000 square feet, that are clustered near Shady Grove Adventist Hospital. They are: • 9850 Key West Ave., 66,000 square feet • 15005 Shady Grove Road, 52,319 square feet • 15001 Shady Grove Road, 51,172 square feet • 9707 Medical Center Drive, 38,367 square feet. The deal also included Woodholme Medical Office Building, a 73,000-square-foot property in Pikesville. The other buildings and one undeveloped property are in Northern Virginia. The sole buyer
in these transactions is Harrison Street Real Estate Capital, based in Chicago. As previously announced, Harrison also is under contract to buy WRIT’s remaining medical office properties, which include a 125,000-square-foot medical office building in Pikesville. The sales complete a dramatic strategic shift of WRIT’s investment from outlying office park properties to a downtown portfolio more focused on Washington, D.C., and its close-in suburbs. The move follows the firm’s 2011 exit from the industrial market and the sale of its outsidethe-Beltway office holdings.
Montgomery starts process to consider whether Aspen Hill has room for Walmart Montgomery County planners were scheduled to have held a meeting on Tuesday to begin considering a partial
rewrite of the Aspen Hill master plan, which will determine whether the neighborhood south of Olney has room for a Walmart. The planning department set the meeting to consider an application for a minor master plan amendment sought by Silver Spring-based Lee Development Group. The firm wants to build a 118,000-square-foot Wal-Mart on a 10-acre site at the northwest corner of Connecticut Avenue and Aspen Hill Road. Lee hopes to demolish and redevelop the former BAE Systems office building, a 258,548-square-foot property that has been vacant since the military contractor relocated to Rockville in July 2010. The building has been sitting empty, except for the occasional county fire training event and visits from the goose population that spends much of its time in the fields surrounding the neighboring Home Depot. The property — a crum-
bling 1960s-era relic — is zoned strictly for office use. But Lee found a new tenant for the site, which sits almost two miles from the nearest Metro station in Glenmont. If Wal-Mart does open a store, it would use 45 percent of the space for a grocery section, which would offer competition with the Giant Food supermarket across the street for the first time since Super Fresh closed in Aspen Hill in October 2010. Lee, which also owns the former Super Fresh site, filled that space with a Kohl’s department store that opened in September.
Brunswick planners approves 25-room hotel The Brunswick Planning Commission approved the site plan for a 25-room hotel and diner catering to railroad crews in the southwestern Frederick County town. The two-story property
will replace the 60-room Green Country Inn, which has been demolished for new development. Lodging Enterprises, based in Wichita, Kan., will operate the hotel and the attached 32-seat Penny’s Diner for its Canadian owners. American Hotel Income Properties REIT has provided $400,000 in mezzanine financing to SunOne Developments Inc., to build the project and has committed to buying the twoacre property for $2.7 million. The two Vancouver firms are partners in several other North American hotel properties that serve railroad workers. The Brunswick hotel is secured by a 10-year railway contract for 15 rooms. The property is expected to open for business by September 2014. The new hotel will be 6,048 square feet. The diner is approved for 1,700 square feet. “It’s approximately a 60 percent reduction in the impervious area from the old hotel,” said Bruce Dell, Brunswick’s planning administrator.
Worman’s Mill office building sells for $3.5M
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First Potomac Realty Trust sold a 40,000-square-foot office building in Frederick for $3.5 million, according to broker Avison Young, which represented the seller. The property — 15 Wormans Mill Court — was 88 percent leased at the time of sale to a long-term tenant, Charles River Laboratories. The twostory building sits just off Md. 355 with quick access to U.S. 15 and Interstate 70. First Potomac expects to record a $500,000 impairment on the deal, according to its third quarter earnings report. The firm acquired the property for almost $3.9 million in 2004 as part of a large portfolio.
Leggett holding budget forums BY
RYAN MARSHALL STAFF WRITER
Montgomery County Executive Isiah Leggett (D) will hold forums in January to get feedback in developing the county’s fiscal 2015 operating budget. Leggett is expected to submit the budget to the County Council on March 17. Ideas tend to run the gamut from countywide issues to more local concerns, county spokesman Patrick Lacefield said. Each session will start with a presentation on the budget and the process before the executive asks for suggestions, he said. Education, public safety and help for the most vulnerable people through the county’s Department of Health and Human Services are always big parts of the budget, Lacefield said. Final decisions on the operating budget are made in early March, before it’s sent to the County Council for its consideration and input. The budget sessions will take Leggett to: • BlackRock Center for the Arts in Germantown on Jan. 6. • Bethesda-Chevy Chase Regional Services Center in Bethesda on Jan. 13. • Eastern Montgomery Regional Services Center in Silver Spring on Jan. 16 • Mid-County Community Recreation Center in Silver Spring on Jan. 27 • Silver Spring Civic Building in Silver Spring on Jan. 29. All five sessions are scheduled to start at 7 p.m. The council will have public hearings once Leggett submits his budget, council spokesman Neil Greenberger said. Those hearings usually take place over four nights in April at the council office building in Rockville, he said. The council must pass a budget by the end of May. The council passed a $4.8 billion operating budget in May for fiscal 2014. rmarshall@gazette.net