More News

The JBG Cos. of Chevy Chase will develop the new National Cancer Institute Shady Grove Campus, a $200 million project awarded by the U.S. General Services Administration.

The 575,000-square-foot complex will include a pair of seven-story buildings with a common entrance and retail shops that will wrap around a parking garage. The consolidation will bring 2,100 employees to the campus, which will be part of the Montgomery County Life Sciences Center on property owned by Johns Hopkins University.

"GSA's decision to consolidate the NCI on the Montgomery County Campus of Johns Hopkins University comes at an optimum time for both the University and the County, as we have just entered into [a memorandum of understanding] detailing our joint commitment to advance the biosciences industry, higher education and workforce development in Montgomery County," said County Executive Isiah Leggett (D) in a statement.

The cancer institute move and new agreement affirm the county's plan to redevelop and triple the size of the 300-acre Shady Grove site into an international scientific and commercial hub with a mix of education and academic, private and federal research and development, as proposed under the Gaithersburg West Master Plan.

"It is our common goal to advance scientific and healthcare translational research to benefit local and worldwide populations," Ronald J. Daniels, Hopkins president, said in a statement.

The agreement also is intended to give momentum to adoption of the master plan, which has been delayed repeatedly by County Council hesitation.

Neighboring community groups and environmentalists have raised concerns about sprawl over the university's 6 million-square-foot proposal. Some council members also fear that building Science City, as it is called, in the western part of the county will block similar high-tech development along the Route 29 corridor on the east side.

The county isn't likely to address the plan before April, which would give Hopkins more time to rally support.

"It is critical to have this type of scientific commitment from one of the world's premiere research institutions in order to implement a biosciences strategy that will enable our community to lead the way in improving human health throughout the world," said Councilman Michael J. Knapp (D-Dist. 2) of Germantown, who chairs the council's Planning, Housing and Economic Development Committee.

JBG, which will develop and own the building, signed a ground lease with Johns Hopkins. HOK has been selected as architect.

JBG said it plans to break ground on the 9-acre development this year and complete the complex within two years.

"Locating the research infrastructure for the National Cancer Institute here is a significant building block for the Shady Grove Life Sciences Center," JBG principal Rod Lawrence said in a statement. "NCI's new Shady Grove Campus will set a standard that will attract public and private science initiatives focused on solving vital health challenges for decades to come."

JBG plans an array of environmentally friendly elements to obtain gold certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design program. A stop for a new mass transit system, the Corridor Cities Transitway, is to be located there and will connect to the Shady Grove Metro station.

"The addition of NCI to our campus makes the Shady Grove area a national epicenter for cancer research," Daniels said. "We are excited to be a partner in providing a state-of-the-art home for this incredibly important scientific institution and its employees."

Developer closes on $576M investment fund

JBG also announced the closing of its seventh investment fund, JBG Investment Fund VII LLC, a $576.5 million fund targeting investment opportunities throughout the Washington, D.C., area.

The fund, which will invest in both debt and equity opportunities, will continue JBG's focus on all urban product types, including office, multi-family, retail and hotel with a range of risk profiles from stable, income-producing to ground-up development assets, according to a JBG statement.

"We are fortunate to have loyal, well-capitalized investors who share our desire to capitalize on the depth of opportunity and dislocation in the current environment," said Michael Glosserman of JBG. "We're seeing compelling opportunities today and believe that those with capital and strong organizational capacity will be best positioned to create significant value in the coming years."

JBG was one of the most active investors in 2009, closing nine investments for a total of about $155 million in total transaction equity volume. About $77.5 million of Fund VII has already been invested or is committed to these investments and JBG expects to be actively investing in the fund through 2012, according to JBG information. Leading university endowments, charitable foundations, wealth managers and high net worth individuals are the primary investors in Fund VII.

Apartments part of $250 million deal

Bernstein Management of Washington, D.C., and Forest City Enterprises of Cleveland will share control of three area apartment buildings totaling 1,340 units under a joint venture valued at $250 million, according to CB Richard Ellis, which arranged the partnership.

Forest City Enterprises said it would net about $34 million in the deal, which comprises the 549-unit Grand in North Bethesda, the 406-unit Lenox Park in Silver Spring and the 385-unit Lenox Club in Arlington, Va. Existing minority partners in the three properties are unaffected by the joint venture transaction, which assigns 50 percent of Forest City's prior ownership to it and Bernstein.

Forest City, which built the three properties, will continue to lease and manage them on behalf of the joint venture.

"The creation of this joint venture is an important step in our strategy of capturing value and generating liquidity from within our portfolio," said Charles A. Ratner, Forest City president and CEO, in a statement. "The continuing strength of the multifamily rental market in the Washington, D.C., area, and the quality of these assets, together with early signs of an economic recovery, made this the right time to bring this venture to fruition."

Mixed-use projects move forward in Silver Spring

Long-stalled plans for an office-hotel-apartment complex in the Fenton Village neighborhood of Silver Spring will be reviewed by the Montgomery County Planning Board on Thursday after the developer lined up neighbors' support.

The Silver Spring Park complex, previously called Moda Vista, will be shorter than originally planned under a revised proposal by developer Ulysses Glee's Fenton Group of Silver Spring. The project will include a 110-room hotel, 58 rental units, a 30,000-square-foot office building and street-level retail at the corner of Silver Spring Avenue and Fenton Street.

The hotel, which will be operated by Marriott International as a Fairfield Inn, is 60 feet tall, a result of a zoning-text amendment passed in 2008 allowing mixed-use projects involving hotels to build to that height on the east side of Fenton. But Glee has submitted plans for a 45-foot-tall residential building, 15 feet below the maximum. He agreed to limit the height in return for community support for the zoning-text amendment that would allow a hotel on the site.

Also in Silver Spring, the Lee Development Group will present plans Monday for its Fillmore music hall complex to the planning board. The company is negotiating for an operator to run a 190-suite hotel next to the 28,000-square-foot music club planned by Live Nation.

Lee expects to break ground on the club by October. Plans for a 220,000-square-foot office building depend on when the commercial space sector recovers.

General Growth would create new firm to redevelop Columbia

General Growth Properties of Chicago announced a plan to emerge from bankruptcy that would include spinning off a separate company that would develop Columbia holdings and other planned communities.

The proposal, subject to approval by U.S. Bankruptcy Court, could block a hostile $10 billion stock bid by rival shopping mall giant Simon Properties.

General Growth said it has lined up a $2.63 billion equity investment commitment from Brookfield Asset Management, which already holds more than $1 billion in General Growth debt. General Growth valued its recapitalization plan at $15 per share of its common stock, which has been trading at $12 to $13 per share in recent days.

Under terms of the Brookfield deal, General Growth's existing shareholders would receive one share of new General Growth common stock with an initial value of $10 per share, plus one share of a new company — General Growth Opportunities — with an initial value of $5 per share, for total consideration of $15 per share. Unsecured creditors would receive par plus accrued interest.

Brookfield would invest $2.5 billion at $10 per share for new General Growth Properties common stock and up to $125 million at $5 per share for General Growth Opportunities common stock.

The new company would own the former company's master-planned communities, including Columbia. Retail centers, such as the Mall in Columbia and Baltimore's Harborplace, would be part of the new General Growth Properties. The proposal would effectively split up the old Rouse Co. of Columbia, which General Growth acquired in 2004 for about $12 billion and financed mostly with debt.

Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; e-mailed to smonroe@gazette.net; or faxed to 301-670-7183.

Staff writer Jason Tomassini contributed to this report.