January 24, 2019 | Daniel J. Sernovitz, Washington Business Journal
It is already entitled and partially under construction, and now Lerner Enterprises is seeking developers to take on parts of a planned mixed-use project off Interstate 270 in suburban Maryland.
The Rockville-based developer has tapped Avison Young to market up to 22 acres of residential and commercial development sites at its larger, 110-acre Black Hill Germantown. The project, which backs up against Black Hill Regional Park in Montgomery County, is slated to include more than 3 million square feet of office, residential, senior living, retail and hotel space.
Up for grabs is a 6-acre site planned as for-sale residential and another 16 acres of commercial space. The sites have been on the market since early November, and Bob Dickman, a principal at Avison Young who is part of the team marketing the sites, said he's already heard from a number of homebuilders interested in acquiring the residential portion.
"It’s one of the unique sites that everything’s ready to go. We’ve got curbed streets, power, a substation, everything’s ready to go," Dickman said. He declined to estimate how much the development sites could sell for.
The project is one of a handful in the works in the Germantown area, where a Silver Spring-based developer recently unveiled plans for a 1.2 million-square-foot mixed-use project.
Lerner started work in June on Black Hill's first phase, a 355-unit apartment building designed by Hord Coplan Macht. Tribute at Black Hill started around the same time on a 140-unit senior living community that is slated to deliver this fall on part of the site it previously acquired from Lerner. Lerner plans to tackle other pieces of the project in the future, but decided to retain Avison Young to market the for-sale housing — not in its wheelhouse — and potential office users seeking new space in the area.
Dickman estimated the residential portion on the market could yield around 82 townhouses, but that's only a rough estimate, and he said it will be up to prospective bidders to determine the highest and best use for the land. The commercial space could yield around 1 million square feet, depending on how it is built out.
Lerner's recently cleared one deal at Black Hill. Carlsbad, California-based global communications company Viasat (NASDAQ: VSAT) will develop a 97,000-square-foot, three-story building as part of a relocation from space on Seneca Meadows Parkway, home to its communication system design and engineering businesses. Terms of the sale were not disclosed. Dickman said Lerner is seeking other owner-occupiers like Viasat rather than selling to other developers to build office space speculatively.
"The commercial’s just going to be more of an as-need basis," he said.
Dickman noted the marketing effort isn't a sign that Lerner is looking to cash out of the project, as the developer views Black Hill as a long-term investment. Meanwhile, Lerner is exploring the outright sale of the former Landover Mall site in Prince George's County, which had been among the prospects for a consolidated FBI headquarters. That's off the table, at least for now, as the federal government canceled that search in July 2017, and is now pursuing a smaller headquarters to be built in downtown D.C.