With vacant office space beginning to drain local tax coffers, officials in the Maryland and Virginia suburbs have trained their sights on their distressed office parks with an eye on reinventing them.
Among the more radical ideas are turning obsolete buildings into schools or warehouses. But with the help of a panel of private sector experts, Montgomery County planners recently recommended a series of more incremental improvements for two isolated complexes, Rock Spring and Executive Boulevard, that may provide a playbook for turning such places into locations companies would be interested in leasing again.
Those ideas include making the complexes easier to navigate by foot and possibly introducing stores and apartments to the mix, in order to create a more lively environment.
Trouble at the Rock Spring office park began in 2012. That year the federal government inked a deal to co-locate units of the National Institutes of Health into a new building closer to a Metro station in the Twinbrook neighborhood, taking 2,500 employees with it. Since then the office vacancy at Rock Spring, located at the foot of the Interstate-270 spur, has ballooned to 21 percent. At another nearby office park, on Executive Boulevard, vacancy is 29 percent, double the rate in the rest of Montgomery County and three times that of Bethesda.
There’s little reason to think their fortunes will turn around soon. Although Rock Spring and Executive Boulevard are located in above-income areas served by well-regarded school districts, each has three buildings that are completely empty, according to the county.
And although commercial leasing as a whole picked up in the Washington region during 2015, the federal government is pursuing another round of major consolidations that will pull tenants from private sector buildings. Marriott International also plans to move its headquarters out of Rock Spring by 2022.
There is about 11 million square feet of vacant space in Montgomery County alone. In some locations, buildings have sat empty for years, raising questions about maintenance and possibly dragging down the value of well-occupied buildings nearby.
“You don’t want to see buildings decaying because it affects the community,” said Glenn Kreger, a Montgomery County planning chief. “Having economically functioning properties provides tax revenue, and then income taxes that go with the jobs. Having large vacant buildings really anywhere could be a problem.”
Companies have been far more willing to relocate recently in the pursuit of more accessible buildings, said Matthew J. Klein, president and chief executive of D.C. developer Akridge. Klein was part of a panel of experts from the Urban Land Institute, a real estate association, that teamed with county planners to rethink the two complexes. They presented their findings recently.
“People are changing where their office space is,” Klein said. “From 2000 to 2008, 40 percent of office tenants, when their leases expired, they stayed in place. But over the last five years we’re seeing that that’s changing pretty substantially, where office tenants are deciding to move. And they’re doing what we call a flight to quality.”
That flight isn’t so much to those properties that are well-built as to those that are well-located. On that point there is some hope at Rock Spring, as it is only about half a mile from one of the town center developments that has been celebrated by county officials, Pike & Rose, and a mile to the White Flint Metro station.
The problem is getting there by foot, something tenants are increasingly willing to pay a premium for; a recent study found that 86 percent of all new office construction in the Washington region was within a quarter-mile of Metro stations.
Walking to Executive Boulevard offices from the Metro station currently requires traversing a maze of parking lots and busy intersections. “When you’re going through there in a car this doesn’t seem like that long of a distance,” said Robert Atkinson, of the McLean architecture firm Davis Carter Scott, another member of the panel. “But given the physical conditions for the pedestrian this feels like a much longer distance than it actually is.”
Some of the buildings along Executive Boulevard may ultimately be transformed into apartment buildings or hotels, as developers have done to buildings in Wheaton, Silver Spring and other parts of the county. But the panel recommended a series of quicker, less-expensive options, among them adding new signage, bike lanes, bike-sharing stations and turning the lawns and landscaped areas into more accessible park space.
More dramatic ideas include adding shops or restaurants in plots currently used for parking, realigning streets to improve walkability and adding a new entrance to the Metro station closer to Executive Boulevard.
Rock Spring raised more concerns about identity and marketability. The panel suggested branding the area around wellness and healthy living. Ideally this would include adding civic-oriented uses to the area such as a library, community center, performance space or even a school.
There was a time when a school — along with apartment buildings and shopping malls — was something office developers walled off from their properties. Now the tables have turned.
“At Rock Spring there are not a lot of amenities along the way that make you think that walking to different uses is feasible,” said Andrea Gilles, a lead planner for the county. “There are not a lot of options other than get in your car to go somewhere for a coffee.”
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