StonebridgeCarras, PN Hoffman, Northwestern Mutual Begin Construction on $200M Mixed-Use Project in Maryland
Four months after StonebridgeCarras and PN Hoffman formed a joint venture with Northwestern Mutual to develop a $200 million mixed-use property on the 3.3-acre parcel known as Lot 31 in Bethesda, Md., the company has kicked off construction of the public parking segment, which, as StonebridgeCarras principal Douglas Firstenberg told Commercial Property Executive, “drove the whole project.”
Lot 31, located just a few miles from Washington, D.C., will bring 250 residential units and 40,000 square feet of retail space to the bustling intersection at Woodmont and Bethesda Avenues, but the parking garage was the key. The recent completion of the land transfer with the City of Bethesda paved the way for the commencement of construction of the facility, which will feature approximately 950 spaces on what had been a surface-parking site providing roughly one-third the amount of the planned parking accommodations. “This land that was really the last opportunity in this part of Bethesda to create a lot of long-term public parking,” Firstenberg said.
The parking structure is a significant segment of the public-private endeavor, but there is much more to the project, which also provides easy access to public transportation. “It started with parking, and the second thing the county wanted was affordable housing, so we’ve more than doubled the typical amount of affordable housing that’s contained in a residential project in Montgomery County,” he noted. “Lot 31 will encompass 162 affordable and market-rate apartments at The Flats and 88 condominiums at The Darcy, which has already been well received by potential buyers.”
The numbers tell the story at The Flats, which will open its door — along with the rest of the residences and the retail — in the winter of 2015. Currently, the developers have 30 percent of their projected revenue under reservation and with the land transfer wrapped up, they will begin converting the condo contracts. PN Hoffman is spearheading sales.
There is also a strong market for rentals in Bethesda, despite the fact that other new projects are in the works. “Everybody is being cautious about the amount of supply that’s coming on in certain submarkets, but Bethesda’s got a very old supply of apartments so we’re pretty confident that the market will be looking for a newer, better, fantastic option,” Firstenberg stated. “I don’t think we can offer a better location and we’ve designed this to be the best apartment building in the market so I think it will be well received.”
Clark Construction Group is the general contractor for Lot 31, which was designed by SK&I Architectural Design Group. The developers relied on commercial real estate and capital markets services provider HFF to orchestrate financing for the project by arranging the formation of StonebridgeCarras and PN Hoffman’s joint venture with its financial partner, Northwestern Mutual, late last year.
With construction underway, Lot 31′s parking garage is on schedule to deliver in 2014. It’s all been a long time coming; Montgomery County awarded StonebridgeCarras and PN Hoffman the rights to develop the site in 2005. But the rewards will be long term. “They took a surface parking lot that wasn’t generating any taxes essentially and now they’re able to convert it and triple the amount of parking, double the amount of affordable housing that they would normally get and generate substantial tax revenues over the next couple of decades,” said Firstenberg. “So for the county, they really got a great trifecta of outcomes.”