Commercial Property Executive: JBG, Bozzuto Partner on Land Purchase for Mixed-Use Suburban D.C. Project
July 19, 2012
With the closing of a recent land transaction, The Bozzuto Group and JBG Rosenfeld Retail have taken a big step forward in their plan for a mixed-use development at Crown, a 182-acre master-planned community just outside of Washington, D.C., in Gaithersburg, Md. The team shelled out a total of $28 million on the acquisition of 20 acres for their project, Downtown Crown, which will yield 538 apartments and 260,000 square feet of retail space.
Even with an increasingly tight national apartment market, plans for a single development project encompassing more than 500 apartment residences may seem excessive, but not in Gaithersburg. The vacancy rate in the Washington, D.C., suburb dropped 20 basis points to 4.1 percent in the first quarter, as per a report by Marcus & Millichap Real Estate Investment Services.
With Northwestern Mutual onboard to provide equity, construction financing and a permanent loan, Bozzuto will build Downtown Crown’s apartment segment, The Cadence at Crown. The units will be housed in two structures with retail on the ground level. The remaining retail, to be developed by JBG, will be located in two multi-tenant buildings. The site will also feature two freestanding restaurants, a bank and a grocery store. The retail portion of Downtown Crown will not collect any dust either; the year-over-year vacancy rate in Gaithersburg, dropped 50 basis points to 5.7 percent in the first quarter.
Retailers have already shown interest in Downtown Crown. Harris Teeter has pre-leased a 53,000-square-foot grocery space and L.A. fitness has signed on for 40,000 square feet. “Downtown Crown enjoys a very strong customer base that will be well-served by a diverse mix of local and national restaurants and stores,” said Krista Di Iaconi, a principal with JBG. “Retailers are quick to recognize those appetites and demographics. Downtown Crown is arriving at just the right time to deliver new retail and housing opportunities at a time of growing need.”
Bozzuto and JBG expect to break ground on Downtown Crown by summer’s end.