NoBeII for Sale Brochure

EXECUTIVE SUMMARY

Mixed-Use Redevelopment Opportunity

Office, Retail, Residential

North Bethesda, MD The North Bethesda Portfolio

Future Rendering

2

Executive Summary

Phase II

Phase I

Existing OfficePhase III

Located just one block south of the White Flint Metro Station (Red Line), the North

Bethesda Portfolio is situated in the heart of the White Flint Sector Plan, one of

Montgomery County’s most vibrant retail districts. In addition to being adjacent to

North Bethesda Market, featuring a 52,000 SF Whole Foods, the North Bethesda

Portfolio is also in close proximity to transformative projects such as Federal

Realty Investment Trust’s recently delivered Pike & Rose, as well as LCOR’s North

Bethesda Center and Lerner Enterprise’s redevelopment of White Flint Mall.

Reflecting broader trends nationwide, office tenants and apartment dwellers

alike have shown a strong preference for Metro-proximate properties, which

is exhibited on Rockville Pike by the strong outperformance of office and

residential assets within a half-mile radius of the White Flint, Twinbrook, and

Rockville Metro Stations. This subset of Metro-accessible office assets has

an occupancy rate of 92%, reflecting vacancy that is half that of the broader

North Bethesda/Potomac and Rockville submarkets. In concert with build-

to-suit, anchor tenant Georgetown University Medical Center’s long-term

commitment to the North Bethesda Portfolio, the existing office/retail assets

provide strong cash yields through the redevelopment period.

This unique offering presents the opportunity for an investor to acquire an

entitled, Metro-accessible, mixed-use redevelopment that can be phased over

time, while enjoying reliable cash flow from the existing commercial assets. The

ongoing transformation and redevelopment of White Flint ensures an investor

considerable upside over the long-term and a yielding land play until that time.

Investment Highlights• Significant development upside consisting of a fully entitled,

3.8 acre mixed-use development site prominently located on

Rockville Pike in North Bethesda, MD, complete with approved

plans with a potential for 740,000 SF of mixed-use development.

• Secure land basis with strong property cash flow consisting of four

office/retail assets, anchored by build-to-suit tenant Georgetown

University Medical Center (31,052 SF, LED: April 2019).

• Excellent access to Metro with the White Flint Metro Station (Red

Line) less than a quarter mile from the Site.

• Located adjacent to the successful North Bethesda Market

development, home to a 52,000 SF Whole Foods and a 55,000 SF

LA Fitness, as well as an array of upscale restaurants and retailers,

including Seasons 52, Arhaus and Brio Tuscan Grille, which offer

the North Bethesda Portfolio a strong and immediately accessible

amenity base.

As the exclusive representative for the Owner, Holliday

Fenoglio Fowler, L.P. (“HFF”) is pleased to present the

opportunity to acquire the North Bethesda Portfolio (the

“Property” or the “Site”). Comprised of four existing office/

retail buildings on 3.8 acres and a leasehold interest in

an adjacent 5.4 acre surface parking lot (450 parking

spaces), The North Bethesda Portfolio is a mixed-use,

Metro-accessible redevelopment opportunity located on

Rockville Pike in North Bethesda, Maryland.

Redevelopment plans consist of three phases totaling 740,528 SF:

• Up to 464 residential units;

• Up to 200,000 SF of commercial space (office & retail);

• Parking for 632-720 vehicles;

• Continued use of an existing 63,650 SF, Class A

office asset constructed in 2004.

3

NORTH BETHESDA PORTFOLIO PROPERTY OVERVIEW

Property Address:11420

Rockville Pike11426-11428

Rockville Pike5640

Nicholson Lane11333

Woodglen DriveLutrell Lot Total

Alternate Address(es): 5650 Nicholson Lane

Zoning: CR-4 CR-4 CR-4 CR-3 CR-3

Total Land Area: 1.76 acres 1.41 acres 0.60 acres 5.43 acres 9.20 acres

Property Type: Class B Office Class B Office/Retail Class B Office/Retail Class A Office/Retail Surface Parking Lot

Year Built/Renovated: 1963/2004 1965/2005 1963/2004 2004 N/A

Rentable Area (RSF): 40,742 56,145 42,663 63,650 N/A 203,200

Floors: 4* 4 4* 4* N/A

Floorplate (RSF): ± 10,200 ± 14,000 ± 9,800 ± 21,750 N/A

Occupancy: 9% 41% 58% 91% N/A

Wtd Avg Remaining Lease Term: 0.6 yrs 0.9 yrs 2.5 yrs 4.7 yrs Ground Lease - 2062 LED

Phase I Phase II Existing/Phase III**

Development Potential: Condominium Residential Commercial Residential

± 85,000 GFA ± 407,000 GFA ± 67,260 GFA ± 492,000 GFA

70 units/10 MPDU 335 units/49 MPDU (existing) 405 units/59 MPDU

Retail Retail Commercial

± 75,000 GFA ± 25,000 GFA ± 100,000 GFA

± 67,260 GFA ± 67,260 GFA

(existing) (existing)

LUTRELL LOT

WHITE FLINTMETRO STATION<0.25 MILES

Property Overview

* Includes one below-grade level.** Yet to be designed Phase III offers up to 90,000 SF of density to be added to 11333 Woodglen Drive.

4

Executive Summary

Cash Flowing Redevelopment Opportunity

• The North Bethesda Portfolio presents rare flexibility to redevelop under

the most ideal timing and economic scenario due to its existing, cash-

flow yielding office/retail assets.

• A thoughtfully phased redevelopment plan has been approved which

allows future investors to reap the benefits of the region’s overall

revitalization while mitigating development and supply risks.

• The planned mix of apartments, condominiums, office and retail will

further advance Rockville Pike’s vision for a more dense, walkable and

transit-oriented area.

Accessibility

The North Bethesda Portfolio is located within walking distance of the White

Flint Metro Station (Red Line), enabling convenient access for future residents

and existing office users to the broader Washington metropolitan area,

including Walter Reed National Military Medical Center, National Institutes

of Health (NIH), Washington, DC’s CBD and Union Station. The North Bethesda

Portfolio is also convenient to several of the region’s major roadways.

• The Capital Beltway (I-495) is minutes south of the North Bethesda

Portfolio via Rockville Pike, connecting the Property to the entire Mid-

Atlantic region.

• I-270 is less than two miles southwest of the Property by way of Old

Georgetown Road and creates a vital corridor between several of the

region’s largest biotechnology employers along northern I-270 and NIH

in North Bethesda.

Amenity Base

• A new vision for North Bethesda is coming into focus. Similar

to the expansion that occurred in the Rosslyn-Ballston corridor,

the redevelopment of North Bethesda Portfolio will continue the

transformation of Rockville Pike into an attractive, walkable district

appealing to both residents and office users.

• The North Bethesda Portfolio is at the doorstep of a considerable

existing amenity base comprised of over 13 million SF of retail space

within a five-mile radius of the Property.

• Immediately adjacent to North Bethesda Portfolio, North Bethesda

Market offers convenient grocery and retail shopping and dining, while

also cultivating a walkable urban area that will complement the North

Bethesda Portfolio by providing a shadow anchor for retail tenants with

the existing adjacent Whole Foods and LA Fitness locations.

• Pike & Rose, Federal Realty Investment Trust’s new mixed-use

development just a few blocks north of the North Bethesda Portfolio,

offers an array of upscale dining and retail to Rockville Pike, including a

luxury movie theater and bowling alley.

• Located directly across Rockville Pike from White Flint Mall, which is

slated for transformative redevelopment that will further enhance the

urbanization of the area.

Phase I Retail & Residential Rendering

RO

CK

VILLE PIK

E

WO

OD

GLE

N D

RIV

E

NICHOLSON LANE

5640 NICHOLSON LANE

11426-11428 ROCKVILLE PIKE

11333 WOODGLEN 11420 ROCKVILLE PIKE

WHITE FLINTMETRO STATION<0.25 MILES

James A. MeiselHolliday Fenoglio Fowler, L.P.

Senior Managing [email protected]

Stephen “Dek” Potts Jr.Holliday Fenoglio Fowler, L.P.


Stephen C. ConleyHolliday Fenoglio Fowler, L.P.

Executive Managing [email protected]

Andrew M. WeirHolliday Fenoglio Fowler, L.P.


Matthew T. NicholsonHolliday Fenoglio Fowler, L.P.

Associate [email protected]

Alan DavisHolliday Fenoglio Fowler, L.P.


1775 Pennsylvania Avenue, NW | 5th FloorWashington, DC 20006

202.533.2500 | www.hfflp.com

David R. NachisonHolliday Fenoglio Fowler, L.P.


Susan B. CarrasHolliday Fenoglio Fowler, L.P.


Financing:Multi-Housing: Multi-Housing:

Holliday Fenoglio Fowler, L.P. (“HFF”) a Maryland licensed real estate broker.

©2014 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.

HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

Documents

NoBeII for Sale Brochure