- The Washington Times - Wednesday, September 6, 2006

Developers have resurrected plans for an eight-story office tower over City Place Mall in Silver Spring and say they are optimistic Montgomery County will grant them the permits they need to build it.

The nearly 160,000 square feet of office space would be built on speculation, meaning the developers have no tenants signed but have high hopes that downtown Silver Spring’s redevelopment boom will attract them.

“I think the timing’s good,” said Bob Metz, a real estate attorney representing Dierman Realty, majority owner of City Place Mall.

When City Place Mall opened in 1992 on the site of a former Hecht’s department store, Dierman Realty applied to the county for a permit to build an office tower on top of the retail complex at 8661 Colesville Road.

However, the McLean company decided that the county’s plans for redeveloping downtown Silver Spring had not progressed far enough to attract tenants willing to pay high rents. Dierman Realty’s building permit expired a few years later.

A decade ago, Silver Spring’s office vacancy rate was running at 39 percent.

Since then, a $650 million downtown renovation is nearing completion, including relocating the Discovery Communications headquarters a short walk away from City Place and bringing in big-name retailers including Borders Books & Music and Whole Foods Market. Office vacancy rates have dropped to 3 percent.

“We really had a big problem, but we turned it around,” said Gary Stith, director of Montgomery County’s Silver Spring redevelopment effort.

Mr. Metz said the chances of getting tenants willing to pay the going rate of about $26 per square foot have improved dramatically, although he could not name what kinds of organizations would locate offices there.

“I think they’re open to everything,” Mr. Metz said.

The start of construction could be two years away, he said.

“It’ll probably take a good 18 months to two years to get through all the approvals,” Mr. Metz said.

Dierman Realty’s latest application for county permits includes designs from architectural firm Morris Ritchie & Associates of Towson, Md.

“It’s going to be a contemporary design,” said Jim Denzler, project manager for Morris Ritchie & Associates. “We will incorporate some energy-conscious design components,” probably including a “green roof” with vegetation to act as natural insulation.

In other news …

• D.C. company Blake Real Estate completed one of the largest lease transactions in the District this year with a General Services Administration lease of 174,670 square feet of office space on behalf of the Department of Justice at Blake’s building at 1100 L St. NW.

The transaction, valued at more than $50 million, makes the building 100 percent leased and commits the Justice Department to a 10-year lease term.

• Forrester Construction of Rockville won a $14 million contract to build the Anacostia Gateway office building at 1800 Martin Luther King Jr. Ave. SE. DRI Inc. and the Anacostia Economic Development Corp. are the developers on the project, which includes 66,000 square feet of office space on three floors. The companies say it is the first major new office building in Anacostia in 15 years.

Property Lines appears Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail [email protected]

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