Main image credit: Carr Properties.
It took a while for developers to wake up and smell the concrete, but the Bethesda commerical office market is finally getting some long overdue attention.
With Bethesda being the cradle and home to some of the largest financial, real estate and hospitality companies in the world; it's a wonder as to why so much attention was paid to commercial office development across the river over the years, while the opportunities in Bethesda were overlooked .
According to first quarter data from Transwestern, the rush of developers now eager to get into Bethesda has pushed its office market to new heights; making Bethesda the sub-market with the largest amount of office space under construction in the entire Washington, D.C. area, including D.C. proper.
Several office construction projects have popped up all over downtown Bethesda with more expected to break ground in the coming years.
The behemoth of these developments is located at 7750 Wisconsin Avenue and will become the new headquarters for the largest hospitality company in the world—Marriott International. Fully-leased, the building will add 785,000 square feet to the Bethesda office market and become one of the tallest buildings on the skyline at nearly 300' feet.
The Wilson and The Elm, office and residential buildings under construction in downtown Bethesda. (Montgomery Business Scene)
Sitting center stage is one of the most anticipated projects under construction in the D.C. area. The Wilson trophy office building under development by Carr Properties was able to move quickly after purchase of the site in 2016—an existing office building was demolished not only for the new mixed-use project but for the western terminus station of the future Purple Line light-rail.
The kick-starer to the ground breaking for Carr was luring local Fox affiliate, FOX 5 WTTG, as a tenant. They will be leaving Washington, D.C. for a 58,000 square foot space in the 23-strory, 295' foot, tower. Enviva Partners has also signed-on, moving within the CBD to take 80,000 square feet, other tenants will include co-working spaces startup WeWork.
The most recent landmark building to break ground is the Avocet Tower at 7373 Wisconsin avenue; and is being developed by Bethesda-based Stonebridge, the developer behind the iconic Two Bethesda Metro Center and the Pinnacle in Atlanta, Georgia. The tower will reach 250’ feet and will be accompanied by a hotel building that will fly the AC Hotels by Marriott Flag.
4747 Bethesda Avenue is now JBG Smith's new headquarters. (Montgomery Business Scene)
JBG Smith's 4747 Bethesda Avenue project is the first of the new Bethesda office buildings to deliver. The building is more than 80 percent leased and is also the new headquarters of JBG Smith (NYSE: JBGS). The company is the largest owner of Amazon HQ2 properties being redeveloped in Arlington County, Virginia.
The top three office markets and their totals for the new year include Bethesda with 1,742,274 square feet under construction—edging out Reston, Va with 1,731,987 square feet, followed by the Washington, D.C. Central Business District (CBD) with 1,039,129 square feet under construction.
What about the rest of the county?
Bethesda now leads the region in the amount of office space under construction, but the wave of new trophy office buildings came after years of stagnation in the sub-market for reasons uncertain.
Montgomery County as a whole hasn't been as fortune as Bethesda, with totals in the balance of the rest of the county not coming close to the Bethesda sub-market. While there are some bright spots in North Rockville — thanks exclusively to biotech activity — the most important question is how the county government will keep the momentum going to bring more white-collar jobs throughout the entire county year-after-year.