Archives August 2020

Free Montgomery Smart Growth Advocacy Training

Coalition for Smarter Growth is holding a Montgomery Smart Growth Advocacy Training, on Thursday, September 17th at 7pm.

They’ll be demystifying the legislative and planning processes of the County Council and Planning Board, and answering any questions. Their goal is to help empower community members who may have felt intimidated by the county’s bureaucracy to advocate for housing, land use, and transit, including the General Plan that’s currently being written.

Here is the registration link,

Some interesting … and good … business news as well a chance to provide input

From MCEDC:

Fast Growing Companies Call Montgomery County Home – Congratulations to the 49 Montgomery County companies that made the 2020 Inc. 5000 list—a compilation of the 5,000 Fastest-Growing Private Companies in America. The number of Montgomery County companies on the list grew by 20% over last year, and included North Bethesda’s mPower Financing.

Montgomery County One of Lowest Office Vacancy Rates in RegionCoStar, a leading resource for office inventory data, found Montgomery County compares well to neighboring counties. Of the six largest jurisdictions in the region, Montgomery County has one of the lowest office vacancy rates at 12.8%, second only to Washington D.C. (12.1%). This data is for the second quarter of 2020.

Streetsense & MCEDC Consumer Survey – Calling Montgomery County residents: we’d like your perspective as retail and restaurant customers. Your answers will inform a new initiative to help independently owned restaurants and retail establishments adapt to new public health requirements and changing consumer spending habits in light of COVID-19. Please fill out the survey here.

Pike & Rose Restaurant News

Congratulations to Kusshi Sushi the winner of the Taste of Moco bracket challenge for Best Sushi.

Also, as reported by the MoCo Show, the founders of Cava, Cava Mezze, and Julii are bringing their newest concept to Pike & Rose. Melina, named after Chef Dimitri Moshovitis’ daughter, will open in the 909 Rose office building across from REI.

The Greek restaurant will have a “vegetable-forward” menu that includes salt-baked beets with roasted lemon Greek yogurt and a pork belly gyro on homemade pita, according to a press release from Federal Realty.

Moshovitis (Quince Orchard HS) joins partners Ted Xenohristos (Paint Branch HS) and Ike Grigoropoulos (Gaithersburg HS) in bringing their second restaurant to the Pike & Rose development, following the success of their French concept Julii. The MoCo natives first opened Cava Mezze in Traville Gateway in 2006 and the first Cava in Bethesda Row in 2011.

7 Ways Montgomery County is Changing

From Dan Reed and Greater Greater Washington

1. The county is growing slowly, but still adding a lot of people. During the 1950s and 1960s, Montgomery County grew really fast, doubling in population each decade. These days, it’s adding new people at a much lower rate—but with over one million residents, that’s still a lot of people. County planners anticipate 208,000 new residents in the next 20 years.

2. The county is getting more diverse, but not evenly. The county became majority-minority for the first time in the 2010 Census, and planners found that many neighborhoods across the county are pretty mixed, with no majority ethnic or racial group. At the same time, the east-west divide is still very real: as East County and the Upcounty become more diverse, west side communities like Bethesda and Chevy Chase have simply remained white and affluent. One exception: close-in Silver Spring, which has become both more diverse and wealthier.

3. This isn’t just a place where people raise kids anymore. Today, households with kids make up just one-fourth of the county’s population, down from 60% in 1960. The county has more older residents whose kids have grown, and planners anticipate that we’ll have fewer and fewer working-age people in the future. Meanwhile, one-fifth of the county are Millennials, who either don’t have kids yet or aren’t planning to have them.

4, County planners found an average of 230 single-family home demolitions each year since 2013, over half of which are in Bethesda, where entire blocks have been transformed.

5. Incomes have been flat for 30 years, which means homeownership is now for the old. Over one-third of Montgomery County households are renters, and they’re not just living in apartments, but in townhomes or single-family houses that are being rented out. One consequence is that homeowners are getting older, as rising prices mean that people who bought their homes decades ago can’t afford to move, and younger residents can’t afford to buy their homes anyway. In 1990, people over 55 owned one-third of the county’s homes and people under 34 owned 18% of them. Today, adults over 55 own 54% of the county’s homes, while those under 34 own just 7% of them.

6. Most people who live here also work here. Nearly 600,000 people work here, and planners found that about 61% of them also live here. In fact, the percentage of people who leave the state to work in DC or Virginia has actually gone down a little. Just 15% of the county’s workers work for the federal government. More people work in the “eds and meds” fields, like education or health care, in the hospitality or food service fields, as well as what’s called “professional work,” like lawyers or consultants.

7. There’s a shift in where people work. Office vacancies in Montgomery County are the highest they’ve been in over a decade, in part to changing work habits like telecommuting, coworking, and smaller offices.  Downtowns like Bethesda are attracting companies like Marriott from suburban office parks, which are now struggling.

Montgomery County, WMATA Working On Deal For Life Sciences Hub At White Flint Metro

From Bisnow by Jon Banister:

Montgomery County is looking to take advantage of its booming life sciences market with a new development around one of its underdeveloped Metro stations.  The county is working on a joint development agreement with WMATA that would allow it to build a life sciences hub next to the White Flint Metro station, County Executive Marc Elrich said Tuesday on Bisnow’s Future of Montgomery County webinar.

Elrich said the parties are currently negotiating a memorandum of understanding and he expects to make a formal announcement with more details once a deal is finalized. He said he has discussed the project with the National Institutes of Health, which is headquartered nearby, and is “excited” about the plans. He also said he is looking to bring a university presence to the development.   “We need a center in Montgomery County that is identifiable. It needs to be on top of a Metro station, it needs to be bigger than a building,” Elrich said. “It’s got to be a deliberate effort to stimulate an area so this is a place people come and look at.”

He said establishing a life sciences hub will help draw new businesses to the county. Developers and local officials have said Montgomery County is falling behind Northern Virginia and the District in attracting businesses.  “It’s the reason we have this partnership with WMATA and are going to do a joint development agreement: So we can be sure we can put on the ground the things that will finally give people a reason to say ‘I want to come to Montgomery County,'” Elrich said. 

Photo by Bisnow. Clockwise from top left: American Gene Technologies’ Jeff Galvin, Cushman & Wakefield’s Revathi Greenwood, Stonebridge’s Doug Firstenberg, Montgomery County Executive Marc Elrich and Selzer Gurvitch Rabin Wertheimer & Polott’s Bob Dalrymple.

The area around the White Flint Metro station in North Bethesda features a Metro parking garage, a WMATA office, a surface parking lot for the agency’s buses and a large, undeveloped lot. Also near the station is the site of the former White Flint Mall, which has long been eyed for development.  The owners of the White Flint mall site, Lerner Enterprises and Tower Cos., engaged in a lengthy legal dispute with Lord & Taylor, which was the only store still open on the property. Earlier this month, Lord & Taylor announced it would close the White Flint store after the company filed for bankruptcy. 

Also near the White Flint Metro station is the massive Pike & Rose mixed-use development from Federal Realty, a 5.9-acre site planned for 1,000 units from Grand Park Development and the Arrowwood multifamily project from LCOR.

Elrich said he sees the White Flint area as a major growth opportunity for the county. “I do think White Flint is key,” Elrich said. “It is a huge area around the Metro that is grossly underdeveloped, you’ve got acres and acres at the Lerner property, you’ve got low-rise on the east side of the [Rockville] Pike that could easily be replaced.” 

Elrich also said he is looking at a potential co-development deal at the Twinbrook Metro station, which is one stop north of the White Flint station. 

American Gene Technologies founder and CEO Jeff Galvin, whose biotech firm is based at 9713 Key West Ave. in Rockville, said he is interested in potentially relocating to the White Flint development.  “When Marc told me about his vision for the Twinbrook-White Flint area, I said, ‘I hope we grow fast enough to be your anchor tenant. Go ahead and plan that thing and I will take a half-million square feet,'” Galvin said. 

Galvin said he could see the White Flint area attracting other biotech companies to relocate from life sciences hubs in California and the Boston area.  “Build a great environment and they’ll come,” Galvin said. “If you have a great environment, and all these high-paying jobs are coming to the White Flint area, guess what else will come: all the restaurants.”

Cushman & Wakefield Global Head of Data and Insights Revathi Greenwood said she expects the coronavirus pandemic will create growth in Montgomery County’s life sciences market as companies in the area work to develop a vaccine.  “The life sciences sector was historically strong, it has become even stronger now with a focus on COVID-19,” Greenwood said. “The suburban-urban revival narrative also plays into that.”

Fascinating Report on Covid’s Impact on Real Estate

One of our resident board members, Jonathan Chambers, shared the Delta Associates Spring 2020 report, “Covid-19’s Impact on the Economy and the Washington Multifamily Market” he helped write. Below are some of the highlights, if you lack the time to review the entire report, which is actually quite interesting.

Washington metro area job growth in April was an unprecedented -319,200, or a loss of approximately 10% of the region’s total employment. The regional unemployment rate also skyrocketed to 9.9% in April, compared to 3.3% in March 2020 and 2.8% in April 2019. The economic impact of the COVID-19 crisis has been wildly uneven among individual business sectors, with some faring far worse than others.

Commercial real estate in the region has been moderately affected by the pandemic, although much of the industry is in a wait-and-see pattern. According to a survey by The Associated General Contractors of America of the Northeast region, 15% of respondents mentioned they have been notified to cease projects that were underway in May. About 33% of respondents are experiencing project delays due to a shortage of
personal protective equipment, and another 28% reported a shortage of construction material. However, domestic production of materials and a national slowdown in construction activity has resulted in a reduction in some construction costs.

Delta conducted a survey of multifamily real estate developers in the Washington metro area to gauge the impact of COVID-19 on scheduled groundbreakings. About half of the respondents have experienced delays due to the difficulty in obtaining financing. Despite delays for some planned multifamily projects, several have started construction amid the pandemic.

A Delta survey of property management firms showed that the pandemic has significantly altered operations of multifamily buildings, including: the closure of common areas, adjustment to cleaning routines, the closure of leasing offices to the public, and the widespread use of virtual tours. During the months of April and May, data from the National Multifamily Housing Council (NMHC) shows that rent collection rates in the U.S. were down in 2020 compared to the same months in 2019, but not as much as expected.

They determined that while the Washington multifamily market has underperformed rapidly growing metros in the Sunbelt and West Coast since the Great Recession, it is better positioned to weather a down cycle than nearly all its peers. They expect minimal delays in deliveries of apartment projects already underway due to the pandemic. The pandemic will likely cause delays in projected construction starts n the second half of 2020, which will reduce the number of deliveries in 2022 and into
2023, well after the end of the medical emergency (hopefully); however, the short-term impacts will be minimal.

They project that deliveries of Class A office space will outpace absorption in all three substate areas over the next year. In turn, they project a rise in vacancy in office space by Q1 2021, reaching close to 5.0% in the metro area compared to 4.4% as of the first quarter of 2020. Rent growth will remain below average and likely turn negative in several submarkets.

While the pandemic will likely not lead to large, permanent migratory shifts away from urban areas, there may be some changes to the design of existing and new multifamily buildings. Some building design features and trends that are likely to become more prevalent going forward include: retrofitting buildings with contactless opening technology, redesigning common areas and amenity space to accommodate social distancing, such as creating office pods or spacing equipment in the fitness center, and adding a greater amount of dedicated workspace in units. COVID-19 will leave its mark on multifamily design just as other market disruptions have over the years.

Picnic in the Park

Looking for a perfect picnic spot in Montgomery County, Maryland? Montgomery Parks and Visit Montgomery have partnered together so you now have even more opportunities to enjoy a picnic in the park. Search for a participating park in your area and find nearby restaurants. While at the park, find the official “Picnic in the Park” sign, take a picture of the QR code, and search for eateries offering delivery.

Our very own Wall Park is part of this MoCo Eats program, so grab a table and some food from a local restaurants, then enjoy a lovely socially-distanced meal with friends and family.