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New Bethesda Office Building Still Looking For Tenants

By Aaron Kraut

Thursday - 7/24/2014, 12:25pm  ET

4500 East West Highway, a new office building nearing completion in downtown Bethesda 4500 East West Highway, a new office building nearing completion in downtown Bethesda 4500 East West Highway, a new office building nearing completion in downtown Bethesda 4500 East West Highway, a new office building nearing completion in downtown Bethesda 4500 East West Highway, a new office building nearing completion in downtown Bethesda

Construction on the gleaming new office building at 4500 East-West Highway is nearing its conclusion, but in another sign of the area’s struggling office market, the building doesn’t yet have any tenants.

The nine-story building from Carr Properties includes 220,000-square-feet of Class A office space, an expansive rooftop terrace, green roof and bike storage area that developers promoted as an environmentally-friendly future landmark in Bethesda.

It will be delivered in September, said Transwestern’s Phil McCarthy, who’s handling leasing for the property.

McCarthy said there’s been “a good deal of activity,” for the property, but no leases signed yet.

McCarthy pointed to leasing activity at the renovated Akridge Class A office building nearby (7550 Wisconsin Ave.). That building is about 70 percent leased after sitting vacant for nearly eight years before Akridge and Rockwood Capital bought it for $12.5 million in a federal auction in 2010.

There are 190 office properties totaling 8.3 million square feet in downtown Bethesda, according to the Montgomery County Planning Department. Nearly half of that inventory is in 19 large Class A office buildings in the Central Business District.

At the end of 2013, the average office vacancy rate in downtown Bethesda was 10.7 percent. Infill properties long ago envisioned as new offices in Bethesda’s “Metro Core” are now being pitched as mixed use residential buildings.

There was, however, some more good news earlier this month for property owners with office space in North Bethesda/White Flint. Bank of America Merrill Lynch announced it had signed on for 40,000 square feet of Federal Realty’s new 80,000-square-foot Class A office building part of Phase 1 of the Pike & Rose project.

A Federal Realty official said the building would be up to 75 percent leased by the time it opened.

As for 4500 East-West Highway, Transwestern is also looking for a replacement for the one tenant many thought would stay — a McDonald’s that became a landmark of its own before being demolished to make way for the project.

McCarthy said Transwestern is looking “for a high quality restaurant which would be an amenity for tenants in the building and the neighborhood,” something that might disappoint lunch-seekers from nearby Bethesda-Chevy Chase High School.