Bethesda Developer Becoming More Active With New CEO, 1,100-Unit Redevelopment
A Bethesda family real estate company, which was founded just after World War II and has spent decades collecting rent and maintaining a series of 1950s-era apartment buildings, is trying to move into the spotlight after nearly 80 years in the background.
Brown Development, previously known as Aldon Management, in recent years formed a new board and hired a new CEO as it began to chart a redevelopment strategy that would keep the business going for decades to come.
Todd Bowen, previously a senior vice president at Kettler, came on as CEO of Brown Development in July 2018. Last month, the company received preliminary approval on its 1,130-unit redevelopment of a series of properties it owns on Battery Lane in Bethesda.
The mom-and-pop real estate company reached a point where it decided it needed to become a more institutional organization if it wanted to compete with the active developers in the region, rather than be acquired by one of them, Bowen said.
"It was run and operated by the founders for years and years," Bowen said. "As it started to transition to the third generation, that's where that inflection point happened where you're either eaten or you start doing the eating. And they chose to create something that will stand the test of time."
Following the restructuring, Brown Development is now the parent company, with Aldon Management as its property management arm and Aldon Properties as its development arm. The company owns multifamily properties in Bethesda, Chevy Chase and Northwest D.C.
After Alvin and Donald Brown founded the company in 1947, they spent the next decade building apartment buildings on Battery Lane — redeveloping them will be Bowen's first project. The five-story brick buildings total roughly 500 units and are surrounded by surface parking, sitting about a half-mile from Downtown Bethesda.
"They were very successful in attracting people to this location," Aldon Properties Senior Vice President Doug Wrenn said. "Sixty years later and the location continues to be amazingly good, but these buildings have pretty much seen their life, their usefulness. So the opportunity was to replace the buildings with modern apartment buildings."
The Battery Lane portfolio consists of five noncontiguous sites along a quarter-mile stretch of road between Woodmont Avenue and Keystone Avenue. The preliminary plan, which the Montgomery County Planning Board approved April 23, outlines the density for four of the five sites.
On Site A, the current 50-unit building would be replaced with 142 units. Site C currently has 147 apartments and is planned for 315 units. Site D would increase from 119 units to 468, while Site E would grow from 95 units to 205. Site B, which wasn't included in the preliminary plan and hasn't yet been approved, is envisioned for 400 units to replace the 66 units currently on the site. The approvals set aside 20% of the units as moderately priced dwelling units.
The project, branded as Battery Lane District, would include about 12K SF of retail. The developer also plans streetscape improvements on Battery Lane, such as a two-way cycle track separated with barriers from vehicular traffic. Each parcel would feature new public green space.
"All of our decisions are trying to create a contiguous feel as you go along Battery Lane," Bowen said. "In years to come we think this is going to be a direct extension of Downtown Bethesda that creates mixed housing types for all people."
The existing properties still have tenants, and the owner plans to shift residents between buildings as they redevelop the property in phases over the next decade. They are planning to begin with Site C, located on the south side of Battery Lane near Woodmont Avenue.
Before the developer can begin construction on the first phase, it still must receive site plan approval and building permits. Wrenn said the company's ideal timeline for that process would have it breaking ground around the end of 2021 or early 2022.
Last month's planning board meeting was held virtually, and the team hopes the county's online processes remain smooth so its timeline is not impacted by the coronavirus pandemic. Brown is looking to bring on a development partner for the first phase, Bowen said.
"We believe our first deal will require some spread of risk, so an equity partner is a smart move for us just to make sure we execute it correctly," Bowen said. "We want to be successful."
Despite the economy entering a downturn amid the pandemic, Bowen expects to receive strong interest from financial partners, in part because of the location. The Battery Lane property sits just south of the National Institutes of Health, one of several federal institutions that experts believe will keep the area stable through a recession.
"Right now, we feel there is still an undersupply of housing, and we feel like the market is still very bullish on multifamily," Bowen said. "We don't expect to have resistance there ... We feel very bullish on Bethesda and the DMV in general, and we think that we're prime for it."