MRP Realty and Rockpoint Group knew it wasn't going to be easy transforming a monolithic vintage office complex into a 21st century trophy-quality asset. But after dropping almost $30M into the old Bethesda Air Rights Center since purchasing it last year, the partners are ready to take the property to market.
Last night at the newly renovated (and newly named) Bethesda Crossing complex, we snapped MRP's Zach Wade and Jackson Prentice, Cassidy Turley's James Cassidy and Jenna Polivka, MGMA's Will McBeath, MRP's Bob Murphy, and Cassidy's Matt Sullivan. It was the unveiling of the 700k SF property's $25M renovation and kick-off for the property being put back on the market after 20 months of getting it up to Class-A standards. The building was 78% leased when purchased from TIAA-CREF in January '13, but after bumping occupancy up to almost 90% while work was ongoing (ratcheting up rents as much as $7/SF), MRP and Rockpoint have decided to tap James and colleagues Bill Collins, Paul Collins, Drew Flood, and Jud Ryan to market it to investors. Jenna and Matt are leasing up the available space, while Will's team took design duties.
The leasing market responded to Bethesda Crossing before MRP and Rockpoint even finished up large-scale work to the buildings' interiors, common areas, lobbies, as well as additions like a new fitness center and conference center. (Bob says $1M alone was spent on new lights.) Co-working specialists ÜberOffices opened its Bethesda location in the complex this past summer, and REITs Washington Prime Group and Pebblebrook Hotel Trust have each signed on, and Jackson says MRP and Rockpoint have even pulled some tenants from DC. But even though rents have gone up, they still fall below that of brand-new product delivering in Bethesda, he adds.
Jackson, Jenna, Will, and Matt in one of Bethesda Crossing's new spec suites—MRP built four initially, and has leased three up, with a fourth under two LOIs. The partners have three more nearing delivery, including the one you see here. The glassy design and open layout are reminiscent of something you might see in downtown DC, something Jackson says was intentional. (Bethesda wants to look like DC. But DC tries to look like Rome. Is any city itself?)
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