Developer Q&A: Bernstein Cos. CEO Adam Bernstein
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The selection process lasted a matter of months, but Bernstein had been assembling and planning the site, at 7750 Wisconsin Ave., for decades. The 22-story, 825K SF office building and 230-room hotel are expected to break ground this year.
Bisnow caught up with Bernstein Cos. CEO Adam Bernstein, who spoke on the phone from the Final Four in San Antonio, to hear how he put together the winning site and how the project is coming together.
Bisnow: Your company acquired this property over 30 years ago, what originally drew you to the site then and what was your plan with it?
Bernstein: We had owned another hotel that we had bought on Rockville Pike and we were getting in the land banking business. We thought we could run a hotel and make a return and probably develop within five or 10 years. This was our second purchase of a hotel so we originally bought the Bethesdan and then it was called the Manor Inn Hotel. We bought the hotel from the Mormon Tabernacle Church, so it comes full circle all the way back to Marriott. That was in the middle of the site. Over the years we assembled the Connor building and what I call the Woodmont Grill parking lot. So that probably happened in the early 2000s, and the owners of those sites are still small partners in the deal. But then more recently, about 10 years ago, we bought the sushi site, Tako Sushi, that was from TW Perry.
When we were in the competition, they were narrowing it down in July 2016, and they said you have to have the corner. I had been working on the corner for three years, maybe more, talking to them for 10 years, trying hard for three years and got it under option basically the day we had to submit to Marriott when they were narrowing the field to a dozen.
Bisnow: How has the Downtown Bethesda area around the property changed in the three decades you have owned this site?
Bernstein: It has been huge. I don’t think we had any high-rise apartment buildings. You had some of the older apartment buildings down off Battery Lane. Then there was mostly two-, three-story retail with maybe office on top and it was the old site where Lionsgate is now was the old KB Georgetown Square it was a movie theater and had a merry-go-round on the first floor. It was a little mom-and-pop, everything was mom-and-pop retail. There were some office buildings, but I’d say it’s probably 20% of what you see there now.
There was more life actually back then on the Woodmont Triangle side, then it switched when Bethesda Row got built and density went to that side. Office buildings got built in the mid-'80s. The Apex Building that just came down was built in the early to mid-'80s.
Bisnow: You said when you originally acquired it you had planned a redevelopment within 10 years. How did you end up holding the property for three decades?
Bernstein: We thought for sure we would tear down and build office within five to 10 years. We got in the hotel business, we ended up expanding the hotel business, which was great because we ended up diversifying our business and then we’ve owned other properties in Downtown Bethesda we’ve bought and sold. We ended up buying the DoubleTree Hotel down across from Benihana a few months before we won the Marriott deal.
Bisnow: When you first bought the site, did you ever envision it becoming the global corporate headquarters for a Fortune 100 company?
Bernstein: No, I could not have dreamed that. We thought if we did the assemblage we could do something special. We always knew an acre to 2 acres in Downtown Bethesda was going to be valuable. We’re quasi-institutional, yet still a family-style business, so we’re long-term holders. So I knew by assembling the property and having that much I knew the value was going to be there and we’d be able to do something special, but I’d never imagine we’d be able to put a 1M SF project with Marriott and a flagship hotel on it.
Bisnow: Did you jump on the Marriott opportunity as soon as you first heard about it? How did you get involved in that process?
Bernstein: No, actually we had a planned Westin, which was owned by Starwood, and were proceeding to go forward with the Westin and an office building. And then right when it got to the point where we were thinking, ‘Is there a way to get out of this and maybe have an opportunity?’ then Marriott bought Starwood and that was just fortuitous; it allowed us to get into the competition. I think we were one of the last sites in the competition.
Bisnow: Why did you choose to partner with Boston Properties?
Bernstein: They’re probably the finest developer as far as quality and reputation and the amount of what they’ve done in our region and in the cities they focus on all over the country. We had talked to them about other projects so we had a relationship. I had relationship with Ray [Ritchey], and we figured out how to put it together.
Bisnow: Why do you think Marriott ultimately selected your site?
Bernstein: I think it was a combination of the location, a little outside of the area with the competing sites that was a little more congested. I think we had better access. I think we were hotel developers and cared about the hotel piece and Marriott saw that, and I think that was a small piece of it.
Overall, the partnership between us and Boston Properties, coupled with that we had less uncertainty at our site. For long-term development, we could maneuver quickly. Marriott wanted the least amount of uncertainty. The combination of reputations and the strength of the group — partnering with Boston Properties was huge — and then we have access off of Wisconsin, Woodmont and Old Georgetown, I think that is a key factor.
Bisnow: What went into the design of the project? How closely involved was Marriott?
Bernstein: That’s another factor is the great partnership with Marriott. The office building has been collaboration with Gensler as the architect, where we’ve just put the design together in a way that fits what Marriott wants and also fits into being an important member in a jewel property that’s going to be on the Woodmont site and help totally revitalize that side of Bethesda and be a huge driver. The architecture fit into the community and what Marriott wanted. It has been a total collaboration and a good one. And we’ve got this plaza in between the office and the hotel. The county did a good job also as far as making sure the architecture was something that wasn’t just a huge big mass. I think the architecture is pretty special.
Bisnow: Where are you right now in the process and what does the timeline look like?
Bernstein: We’re going for our final permits and hoping to break ground this summer, probably mid-summer. Then we would deliver in the beginning of 2022.
Bisnow: Do you think this Marriott project will act as a catalyst to bring more office demand to the surrounding area?
Bernstein: It already has acted as a huge catalyst for additional office demand and will continue to do so. Deals that have been announced since then include Fox 5, Host Hotels and a few others. It’s going to continue as we break ground, the excitement is going to continue to build and Bethesda is going to become even more of a work-live-play atmosphere. We’re thrilled and excited. Marriott has committed to being a real neighbor; they want to be part of the community.