This sponsored, biweekly Q&A column is written by Andrew Goodman, broker/owner of Goodman, Realtors. Based in Bethesda, Andrew serves clients in Maryland, D.C., and Northern Virginia. Please submit comments, questions, and opinions in the comments section or via email.
Question: What affect do you think the development of the Pike and Rose project will have on the real estate of its immediate area?
Pike & Rose is a development project set to open its first phase in the summer and fall of this year.
The total project is going to consist 430,000 square feet of retail space, 1,500 new residences, 1.1 million square feet of office space, a 300-room luxury hotel, eight-screen iPic Theatre, and a 250-seat performing arts venue.
Businesses that have already signed leases include: iPic Theatres, Del Frisco’s Grille, Stella Barra Pizzeria, Summer House, Protein Bar, Roti, ShopHouse Southeast Asian Kitchen, Tanzy, Salt Bar, Sport & Health, City Sports, and Chipotle.
As far as the community’s housing is concerned, the first building scheduled to be delivered in the summer is the PerSei, which is a 174-unit building with 1- and 2-bedroom units ranging from 615-1,585 square feet.
The second building is the Pallas, which is to be completed by the first quarter of 2015. The Pallas will include 319 units with units ranging from 554-2,007 square feet. As of now, all residential units seem to be labeled as rentals, but I do expect at least a small portion of of the 1,500 residences would be available to purchase..
Pike & Rose will have a huge and positive impact on the real estate of the area.
I am truly excited for the project. I believe the new attractions, stores, and restaurants will ultimately increase the high demand that already exists in the area. With all residential units slated as rentals, as of now, the housing supply for purchase will remain low and the demand will continue to grow with the opening of the town center-like neighborhood.
Right now, The Gallery at White Flint Place, The Sterling and the Midtown Bethesda North anchor the condominium market in the area — just across Rockville Pike from Pike & Rose.
The White Flint Station low rise is also in demand, but seems inferior to the other three buildings — even though it is still very stylish. I do expect these condominium buildings to appreciate.
The one drawback, however, is associated condo fees. While The Gallery and White Flint Station fees seem to be consistent with the market, The Sterling and Midtown Bethesda North buildings are considerably higher.
Yes, The Sterling and Midtown Bethesda North buildings do offer phenomenal amenities, but the higher condo fees could push them out of the market if they increase at all.
Townhomes and single family homes will also grow in demand. However, most homes in walking distance to the Pike & Rose are at an age typical of needing significant updating. This will require cash, unless some sort of construction loan can be obtained, which may make it difficult for some buyers to consider purchasing.
All in all, Pike & Rose will be great for the transforming area. This project is the first of many which will change the face of North Bethesda and the 20852 zip code.