he investment offering of Gateway Center is a unique opportunity to acquire a two-building, mixed-use office and retail portfolio investment in Gaithersburg, Montgomery County, Maryland. The 43,727 SF 74% leased project, located at 811 and 831 Russell Avenue, has prime street frontage, immediate access to two exits of I-270, and proximity to a dense retail corridor. Gateway Center is ready for an investor/occupier with the full 11,167 SF top floor available for a business owner seeking to relocate to maximize convenience for employees and clients Tand invest capital into income-producing property in Montgomery County. The subject property is located in the Montgomery Village community which has four approved and one pending large-scale development projects scheduled to deliver millions of square feet of amenities and residential units over the next 10 years.
3-STORY, FREESTANDING 1-STORY, GROWING MICRO-MARKET MIXED-USE OFFICE/ FREESTANDING WITHIN SOUGHT-AFTER RETAIL PROPERTY RETAIL PROPERTY MONTGOMERY COUNTY
IMMEDIATE HIGH VISIBILITY BELOW- SIGNIFICANT 270 355 ACCESS TO CORPORATE SIGNAGE MARKET RESIDUAL 01 I-270 & MD-355 OPPORTUNITIES RENTS VALUE UPSIDE
INVESTMENT HIGHLIGHTS
Edge Capital Markets, as the exclusive representative for the owner, is pleased to present for sale Gateway Center, a two-building portfolio consisting of a 31,667 SF, 65% occupied mixed-use office/retail building and a 12,060 SF, 100% occupied retail building located at 811 and 831 Russell Avenue in Gaithersburg, Maryland.
02 | EDGECRE.COM 01. INVESTMENT HIGHLIGHTS | INVESTMENT RATIONALE
OPPORTUNITY TO OWNER-OCCUPY FULL TOP FLOOR, PROPERTY FEATURES ENJOY RENTAL INCOME CASH FLOW AND LONG-TERM INVESTMENT • Situated at the first intersection after exiting Interstate 270 and Maryland 355, offering instant An investor/occupier can immediately occupy the third-floor vacancy of 7,723 SF of contiguous office space. access Montgomery County’s central highways. The remaining 3,444 SF is occupied, but the leases include 60-day landlord termination rights, making • Opportunity for direct elevator access into the owner’s suite, ideal for security and controlled Gateway Center a unique opportunity for an office user, investor/occupier to grow into the space. access for employers with sensitive information or materials. As the COVID-19 pandemic forced broad work from home policies, the average worker gained 37 minutes of personal • Private restrooms and ample natural lighting for superior employee comfort. time per day.1 Workers will be reluctant to give back that time. Meanwhile, home sales in Montgomery County jumped • High visibility, top floor signage opportunity providing a branding opportunity for a growing an astonishing 26% over a year ago.2 Combined, these factors support an investor/occupier seeking an office close small business. Russell Avenue has 11,201 average annual weekday traffic count. to home in Suburban Maryland and betting on similar preferences among employees and job seekers. • Vacant suites are in warm-lit shell condition, presenting a blank canvas ready for the new investor/occupier to build out its custom design. • Child recreation, specialty grocery, food service, medical, and other businesses occupy the retail SUITE 303 SUITE 300 space, offering on-site amenities for employee benefit.
IDEAL FOR LONG-TERM INVESTMENT Direct Elevator Access The Montgomery Village area is in the early stages of a large-scale redevelopment that will deliver contemporary mixed-use amenities, new construction residential and attract major employers allowing an investor/occupier to support its growing operations and benefit from long term appreciation of the real estate.
Signage Opportunities Signage Opportunities
SUITE 302 SUITE 301
Immediate Occupancy
Signage Opportunities Expansion Space
1 – Harvard Business Review “Where did the commute time go?” https://hbr.org/2020/12/where-did-the-commute- time-go#:~:text=1)%20An%20overall%20decrease%20in,increase%20in%20work%2Dday%20spans. 2 - http://marketminute.longandfoster.com/Market-Minute/MD/Montgomery-County.htm
04 | EDGECRE.COM Gateway Center / Edge Capital Markets | 05 RIO Lakefront
01. INVESTMENT HIGHLIGHTS | INVESTMENT RATIONALE
IN-PLACE RENTS BELOW MARKET, OPPORTUNITY FOR IMMEDIATE REVENUE GROWTH
The current average lease rate for Gaithersburg Class B Office is $24.09/SF full service, approximately 15% higher than the current average office rent of $21.00/ SF full service. Neighborhood Retail in Gaithersburg commands $28.69/SF NNN, more than a 50% increase over the current average retail rent of $18.28/SF NNN.
GAITHERSBURG CLASS B OFFICE RENTS
$24.50 Downtown Crown
$24.00
$23.50
$23.00
$22.50 (15%) $22.00
$21.50
$21.00
$20.50 2016 2017 2018 2019 2020
Gaithersburg Office - Class B 811 Russell Ave. Avg. Office Rent
GAITHERSBURG NEIGHBORHOOD RETAIL RENTS
$29.50
$27.50 NIST AstraZeneca
$25.50
$23.50 (57%)
$21.50
$19.50
$17.50 2016 2017 2018 2019 2020
Gaithersburg - Neighborhood Retail 811 & 831 Russell Ave. Avg. Retail Rent
06 | EDGECRE.COM Gateway Center / Edge Capital Markets | 07 01. INVESTMENT HIGHLIGHTS | TENANT HIGHLIGHTS
OmniFun is an indoor playground with equipment BUSINESS HEALTH LONG-TERM POTENTIAL FOR REPOSITION, and activities appropriate for children aged 6 months AND OUTLOOK DISPOSITION, AND INVESTMENT UPSIDE to 12 years. It is the only facility in Montgomery County that caters to that age range. • Ownership arranged a rent deferral • C-2 General Commercial zoning allows many uses by-right that would be OmniFun occupies the entire 12,060 SF facility at agreement to serve as a bridge to get ideal tenants that would be attracted to this location and seek out the 831 Russell Avenue with a lease that runs through OmniFun to the spring-time when the 20-25 foot ceilings and loading dock features in the future, including day 9/30/2029, paying $20/SF NNN, 30% below market should return to normalcy. care, indoor amusement and recreation, auto repair, auto sales, and research and experimental laboratories related to the life science industry. average Neighborhood Retail market rents in • Montgomery Village is expected to add Gaithersburg. Starting in the second half of 2021, hundreds of single-family homes in the • The zoning also aligns with the growing demand for ecommerce facilities when business operations will return to normal, next two years, bringing new customers close to residential populations. By-right uses include light assembly the new investor/occupier will benefit from stable to OmniFun’s doorstep. and shipping of electronics provided that the user does not disturb the income with long-term rental income upside. commercial environment. • The lot may be subdivided and sold-off in the future, which, if re-leased to a credit-worthy tenant, would generate a significantly lower cap rate and recoup most or all of the investor/occupier’s initial investment equity.
08 | EDGECRE.COM Gateway Center / Edge Capital Markets | 09 New investor/occupier may subdivide the property and dispose of 831 Russell Ave.
30ft Building Height
15ft Wide Loading Dock 01. INVESTMENT HIGHLIGHTS | LOCATION HIGHLIGHTS
PROXIMITY TO POPULATION CENTERS
• King Farm. 4.5 mi.
• Crown Farm . 5 mi. • Rockville. 6.5 mi. gateway center • Potomac. 11 mi.
• Bethesda. 15 mi.
• Downtown Washington D.C. 25 mi.
DISTANCE TO TRANSIT
• Maryland 355 . <0.5 Mi.
• Interstate 270. <1 Mi.
• Gaithersburg Commuter Rail (MARC). 2 Mi.
• Metropolitan Grove Commuter Rail (MARC) . 2 Mi.
• Shady Grove Metro Station. 4 Mi.
• Interstate 370. 4 Mi.
• Maryland 200 (Intercounty Connector). 5 Mi.
• Interstate 495. 15 Mi.
MAJOR REGIONAL EMPLOYERS
National Institutes of Health – 17,300 employed
U.S. Food and Drug Administration – 13,130 employed
Marriot International – 5,500 employed
Lockheed Martin – 4,690 employed
National Oceanic & Atmospheric Administration – 4,600 employed
AstraZeneca – 4,000 employed
Verizon – 2,870 employed
Montgomery College – 2,850 employed
National Institute of Standards and Technology – 2,730 employed
12 | EDGECRE.COM Parklands Community New I-270/Watkins Mill Rd Interchange Completed in June, 2020
355
WATKINS MILL RD
270
Leidos Campus Mixed-Use FREDERICK RD Redevelopment Site
355
MONTGOMERY VILLAGE AVE
RUSSELL AVE
Gateway center | 811 & 831 RUSSEL AVE 46,991 AVG ANNUAL WEEKDAY TRAFFIC COUNT 355 Lakeforest Mall Redevelopment Site
MONTGOMERY VILLAGE AVE Gateway center | 811 & 831 RUSSEL AVE Montgomery County Fairground
RUSSELL AVE 46,991 AVG ANNUAL WEEKDAY TRAFFIC COUNT
FREDERICK RD Leidos Campus Mixed-Use Redevelopment Site 270
355
RADIUS 2 MI 5 MI 10 MI
2020 Population 77,226 298,247 602,622
2025 Population Proj. 79,470 305,087 616,969 WATKINS MILL RD Median Age 36.7 37.5 39.2
Median Home Value $314,676 $413,778 $466,587
Median Year Built 1980 1987 1984
2020 Households 27,411 104,923 213,726
Parklands Community 2025 Household Proj. 28,176 107,133 218,410
New I-270/Watkins Mill Rd Interchange Avg. Household Income $97,449 $126,423 $136,738 Completed in June, 2020 Total Consumer Spending $714.1 M $3.3 B $7.1 B 01. INVESTMENT HIGHLIGHTS | MARKET SUMMARY
W A T K I N
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E Location Overview
R V
D A
E GAITHERSBURG MONTGOMERY COUNTY G A L L Gateway Center is located in Gaithersburg, Maryland, Montgomery County, one of the most populous and affluent counties in Maryland, I V an internationally recognized biotechnology hub, and it is a major economic engine for the state, generating more than $75 billion Y R benefiting from its proximity to federal research in output annually. Primary private sector industries with a heavy presence in the E M facilities and regulatory agencies in Gaithersburg and county include information technology, telecommunications, biotechnology & life O G broader Montgomery County. The city boasts one sciences, software development, aerospace engineering, and professional services. T N GOSHEN RD of the highest educated local talent supplies in the The federal government is a significant contributor to the local economy with O C. Bloom Montgomery Village Development M country. As a state, Maryland ranks fourth in the nation agencies like the National Institutes of Health, the National Institute of Standards in the percentage of the population with a bachelor’s and Technology, and the Food & Drug Administration calling Montgomery County degree and second in the percentage with a graduate home. These firms and agencies are staffed by a highly educated, young workforce, or professional degree. Gaithersburg itself is located many of which are graduates of prominent universities located in Suburban within an hour’s drive of several of the nation’s leading Maryland, such as the University of Maryland and Johns Hopkins University. academic institutions.
Home to more than 4,000 businesses and situated WASHINGTON D.C. in the heart of the Washington-Baltimore region, Gaithersburg is in the middle of the fourth largest The Washington, D.C. metro area is internationally recognized by real estate CENTER WAY RD retail market in the U.S., and it is central to the investors as one of the premier investment markets in the United States based on Boston-Atlanta Corridor. its employment base, actual and anticipated job growth, income levels, quality of life, existing infrastructure and its highly educated workforce. Non-government sectors such as Professional/Business Services employed nearly 2.5 million people as of 2019. According to the Urban Institute, the Washington metropolitan areas E. Atlantic Realty Montgomery Village Center population is expected to grow by at least 2 million between 2019 and 2030. D. Lidl Development
D R L IL M S A Suburban Transformation N I
K
T A
Montgomery Village is a densely populated, middle income suburban community with an older residential and commercial property A W stock, which is reflected in comparatively low commercial market rents. W The City of Gaithersburg has approved several large-scale development plans to modernize the area and attract increased commercial investment as described in the Major Developments section below. These projects will begin to deliver in early 2021.
DEVELOPMENT 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 E
V A SUMMARY & TIMELINE Leidos E G Campus A • 55,000 Retail SF L IL V • 395,000 Flex SF Lakeforest Y R Mall* E Gateway center M • 494 Single Family Homes O MIDCOUNTY HWY TG N • 882 Townhomes O Bloom M • 212 Apartments B. Lakeforest Mall - Redevelopment Site Lidl
N. FREDERICK AVE Project Planning Montgomery Village Center Development
Project Complete *Assumes planning is complete when development moratorium is lifted in August 2021 GOSHEN RD
270 A. Leidos Campus - Redevelopment Site 18 | EDGECRE.COM 01. INVESTMENT HIGHLIGHTS | MARKET SUMMARY major developments
The transformational development story of the Montgomery Village micro-market will take shape in the next year, with nearly D. LIDL DEVELOPMENT 700 residential units expected to be delivered. Alongside the below market in-place rents at Gateway Center, we anticipate significant market rental rate upside for both the office and retail product in Montgomery Village. Lidl is a German grocery chain that has purchased land on Montgomery Village Avenue, and received CRT (Commercial/Residential zoning). The zoning is meant to encourage a mix of commercial and residential uses, create interactive streets, and provide meaningful public spaces. The first phase of A. LEIDOS CAMPUS - REDEVELOPMENT SITE | MATAN COMPANIES development will deliver a 30,000 SF grocery store with over 150 parking spaces by Spring 2021. A second retail development totaling approximately 25,000 SF will be delivered in a second phase. Matan Companies purchased 700 N Frederick in 2019, with plans to redevelop the lot. This 44 acre property is projected to View from Montgomery Village Avenue View of East Facing Elevation serve as a last mile distribution location, a headquarters for the expanding biotech market, or to create a mixed-use, multi-tenant hub. The site is strategically located along Interstate 270 and Route 355, 6 miles north of the beltway and 20 miles northwest of downtown Washington D.C. It is nearby to ICC, which links I-270 to I-95, providing more direct ingress and egress. This high-barrier-to-entry Montgomery County location serves over 6.2 million residents in the Washington D.C. MSA. Source: Matan Companies
E. ATLANTIC REALTY MONTGOMERY VILLAGE CENTER
B. LAKEFOREST MALL Atlantic Realty Company (ARC) purchased the site with immediate plans to give it a new façade and sign package. The idea for the LAKEFOREST: TOWNHOME center is not a complete tear down, but a modern, fresh face. Lakeforest Mall was purchased by South Carolina CONCEPTUAL YIELD developer, WRS with the hopes of a redevelopment 550-575 Total ARC also plans to create two new pad sites in the front of the center. project. The City of Gaithersburg imposed a 12-month They are confident about their ability to attract a national grocery Rear loaded moratorium in August 2020 to further evaluate the store, which, along with Big Lots, would anchor the center. highest and best use for 300,000+ SF site. A sketch Front loaded plan submitted in February 2020 called for 550-575 To consolidate the retail to a central location accessible by all traffic, townhomes to be constructed. The next obstacle is ARC plans to make all storefronts street-facing, and eliminate the pad to work on purchasing out the four anchor properties in the rear of the center. at Lakeforest Mall to retain full control over the This space will make room for an apartment complex (approximately land. If a buy-out does not occur, the anchors have 212 units) and a parking garage, which will service the apartment the possibility to sublet their current retail space to residents and retail employees. The apartment complex will also have someone else. a 3,000 SF space for community meetings and events. Other townhouse units will be placed on top of and behind the other existing retail strip There are approximately 130 units proposed for this area. Townhomes are envisioned to have front porches or stoops C. BLOOM MONTGOMERY VILLAGE DEVELOPMENT to create activity and promote residents being outside their homes.
Monument realty acquired the land in 2013, and received MVMP rezoning, which allows for low density townhome development. In June 2020 construction began to build 494 single family homes and townhouses. Ryan Homes is building 177 townhouses in their first project phase, sales are anticipated to begin in early 2021. Bloom Village will include approximately 4,000 feet along the Cabin Branch stream, which winds through the community and connects two park systems. When the community is complete, it will have about 90 acres for recreational use, including community gardens, picnic pavilions, walking paths, a dog park and a playground.
20 | EDGECRE.COM Gateway Center / Edge Capital Markets | 21 01. INVESTMENT HIGHLIGHTS | MARKET SUMMARY 355
270 Gateway center RETAIL & LIFESTYLE A. QUINCE ORCHARD SHOPPING CENTER • 267,000 SF recently-renovated shopping center featuring a mix of local and AMENITIES national retailers • Retailers include Aldi, HomeGoods, LA Fitness, Staples, Walgreens, and N. FREDERICK AVE Buffalo Wild Wings A. Quince Orchard B. DIAMOND SQUARE • 175,000 SF neighborhood shopping center anchored by Giant Food • Other retailers include Capital One, Subway, and JoAnn Fabrics
B. Diamond Square C. KENTLANDS • Consists of two major shopping centers, Kentlands Square and Kentlands Market Square
D
• Kentlands Market Square is a 250,000 SF, Whole Foods-anchored open-air R
D C. Kentlands Market Square. shopping center located in the Kentlands neighborhood R A Rendering by Kimco Realty H • Kentlands Square is a 241,000 SF shopping center anchored by Giant Food C R O • Retailers include Chopt, Burtons Grill & Bar, MOD Pizza, Orangetheory, E NC 355 Chick-Fil-A, Panera Bread, and Cinepolis Luxury Cinemas QUI
D D. RIO LAKEFRONT R H C C. Kentlands N A • 760,000 SF main-street retail, restaurant and entertainment district located R B at the convergence of I-370 and I-270 Y D D • More than 50 major and local retailers including AMC Dine-In Rio Cinemas U 18, True Food Kitchen, Yard House, Uncle Julio’s, and Target M GR E D. RIO Lakefront 370 D. RIO Lakefront A T
S E. 270 CENTER E E. 270 Center N
E
C A • 233,000 SF regional power center located at the juncture of I-270 and Shady A
Grove Road H W • Major national brands include The Home Depot, Best Buy, Nordstrom Rack, Y and Five Guys
F. DOWNTOWN CROWN
F. Downtown Crown • 255,000 SF mixed-use shopping & lifestyle destination featuring a 28 F. Downtown Crown varied mix of restaurants, shops, and services • Retailers include Harris Teeter, LA Fitness, and Lululemon 270
G. FALLSGROVE VILLAGE CENTER SHADY GROVE RD
• 150,000 SF community center located adjacent to Shady Grove Adventist KEY W AVE • Retailers include Chipotle Mexican Grill, Safeway, Wingstop, and Starbucks G. Fallsgrove Village Center 28
22 | EDGECRE.COM