From Bethesda Beat
Building’s high vacancy rates exemplified woes of area office parks
6116 Executive Blvd. VIA GOODSTONE LLC
A North Bethesda building that became a symbol of troubled suburban office parks around the region could be on the brink of resurgence.
A real estate finance firm has landed a $30 million loan to cover renovation costs for the eight-story building at 6116 Executive Blvd., according to a Monday press release.
The National Cancer Institute moved out of the 217,732-square-foot building in 2013, and a Washington Post article two years later reported the office’s vacancy rate was 98.7 percent.
In April, the real estate investment firm Goodstone LLC bought the vacant structure for $9.5 million, roughly a tenth of what the building sold for in 2005.
The White Flint area along Executive Boulevard was once known as the Washington Science Center, but in recent years, the corridor has been plagued with high vacancy rates. The trend has forced county planners to consider converting empty offices to housing or other uses and moving away from the suburban office park model.
However, Goodstone President Stephen Durr said he views the area around Executive Boulevard as an exception, thanks in part to the energy generated by the growing Pike & Rose neighborhood.
“While it may be true that suburban office parks are facing headwinds across the nation … it’s not true for North Bethesda, and it’s not true for Executive Boulevard,” he said.
The high rental rates in downtown Bethesda are encouraging some businesses to look elsewhere for space, but employers still want easy access to the Metro system and an urban environment, Durr said. He believes 6116 Executive Blvd. offers the best of both worlds.
Goodstone is planning to embark on a $10 million project to overhaul the 28-year-old building on Executive Boulevard. The effort will focus on updating the building’s entryways, elevators and common areas. The work will also include installing a state-of-the-art fitness center, conference space, vending café, visitor lounge and upper-floor tenant terrace, the release stated.
The other $20 million supplied by the loan will pay for attracting tenants and outfitting the interior for specific businesses, he said.
Property owners anticipate the building will be ready for occupants in June 2018.
The address sits less than a mile from the White Flint Metro station and is close to Rockville Pike, Old Georgetown Road and Montrose Parkway.
Phillips Realty Capital helped Goodstone secure the loan, and the company has picked the firm JLL to lease the space, the release stated. Durr said no tenants have signed yet.