A New York Debt Fund Sees Value in Rockville’s Office Market

Park Plaza I and II

ROCKVILLE, MD—Last June Marcus Capital Partners announced it acquired Park Plaza II through its most recent fund, Marcus Capital Partners Fund II, LP. Shortly after, it acquired the sister building, Park Plaza I.  Now the Boston-based company has secured financing for the purchase and capital improvement and leasing efforts of these two buildings via a New York-based debt fund, PCCP.

The amount provided, $34.13 million, is not all the much in the grand scheme of such things. But the fact that PCCP was interested in this asset is telling — given Maryland’s underdog status — about debt funds’ appetite for deals. The loan PCCP provided for Park Plaza I and II also covers funding for the recapitalization of the property, as well as capital for tenant improvements and leasing costs, according to John Randall, managing director with PCCP. One attribute about the buildings that PCCP singled out was Park Plaza II’s distinction of having the only  available contiguous block of class A office space topping 100,000 square feet in this submarket. The downside — or rather, value add strategic plan? The 126,956-square foot building, which was developed in 2001, is  currently only 16% leased. Leased up to the right tenants, it could be a cash cow if and when suburban Maryland’s market improves.